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Explain the importance of supply chain management
Benefits of supply chain strategies to the firm
Explain the importance of supply chain management
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In business terminology, supply chain is the name given to a network of facilities and distribution options that performs the functions of procurement of materials, their transformation into intermediate and finished products, and then later the distribution of these finished products to customers. Although it may seem that supply chains are only important to manufacturing industries, they exist in service industries also. The actual level of its complexity may, however, vary greatly from industry to industry and firm to firm. Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. The objectives of these organizational divisions are always different and conflict with each other’s objectives. . Marketing puts a higher emphasis on high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization---there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such an integration can be achieved. Supply chain management is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm, and those where each channel member operates independently. Therefore coordination between the various players in the chain is key in its effective management. For a supply chain to work efficiently, all the different divisions of it must perform in harmony. The most important relation in this chain is among the adjacent departments. They work must smoothly so that the task can be carried from one to the other. But for the whole chain to work effectively, it has to make a coordinated effort to achieve that goal. There are two types of decisions that are relevant to supply chain management - strategic and operational. The strategic decisions are always made over a longer period of time, usually in years. These decisions are parallel to the corporate strategy and guide supply chain policies from a design perspective. The operational decisions on the other hand are short term, and focus on activities over a day-to-day basis. The operational decisions are there to manage the product flow so that it is in conformance with the strategically planned supply chain.
There are two fundamental sorts of supply chains today and they are called business-to-business supply ties and business to shopper supply chains. Business-to-Business supply fastens will be alluded to as B2B, and Business to Consumer as B2C in this paper. The real contrast in the middle of B2B and B2C supply chains is the measure of channels that an item goes through before coming to the end client. B2B supply chains have less channels generally and are bigger in size though B2C supply chains have a bigger measure of littler channels
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
... important and worth mention reason for firms to involve in supply chain conducts is in reaction to pressure and threats from competitors, both domestic and internationally. High level of supply chain activities occurs when the strategies at each of the firms authentic with on the whole supply chain strategies. Each firm must recognize its job in the supply chain, the requirements of the final customer, and how these requirements are translate into internal operations needs and the needs being placed on suppliers. Manufacturers are required to better supervise the supply chain and to get better manufacturing competence and logistics operations although remaining reaction to altering market situation and customer demands. And increase the complicated global contact between suppliers, manufacturers, distributors, retailers and consumers join together these pressures.
“Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistic activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third parties service providers and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies.’
The increased competitions between businesses in the market resulted in increasing product offerings from these businesses which in turn shortened product life cycles. As a result, it has become essential for these businesses to adapt the new technologies to better manage and control their supply chain management. So, experts have identified the successful needed practices to develop more effective supply chain managements.
Supply chain management is basically refers to the fundamental supply chain analysis of the organization which predominantly describes functionalities from source to the delivery point. In this process of delivery, supply chain management framework divides in four categories: In Planning the products and suppliers evaluated and selected, Sourcing pull the information process including contracting, ordering and expediting, Moving is a physical process from suppliers to end user and Paying is the financial process including payment and performance measurement.
‘Supply chain management integrates supply and demand management within and across companies. It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thir- party service providers, and customers’. (Web: Council for Supply Chain Management Pr...
The pattern of decisions and action that shape the long-term vision, objectives and capabilities of the operations and its contribution to the overall strategy of a business is known as the operation strategy (Slack, N/ Brandon-Jones,A/ Johnston,R/ Betts, A (2015)). Operation strategy can determine the success or failure of a business and is sceptical to being heavily influenced by poor operational implementation.
...imal solution. Then, a simulation method is developed to compare the centralized and decentralized SCs. In addition, to reach the near optimal solution in the centralized model, evolution strategy (ES) algorithm and imperialist competitive algorithm (ICA) as meta-heuristic approaches are applied.
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
"A lot of companies think of supply chain as a cost centre. They don’t always see it as helping to funnel top-line growth." Supply chain touches practically every part of operations inside an organization: from determining client interest, to sourcing crude materials, to assembling, distribution and returns Supply chain is to adjust supply and request, for example the demand for goods and services. You need to get the right quantity and quality of goods and services
Lack of coordination in a supply chain is costly and highly disruptive. The readings this week described several factors that can lead to supply chain problems. Most of the problems occur when there is ineffective communication between the different stages of a supply chain. Within a supply chain each stage may have a different owner and different performance indicators or measures. If each stage if focused on its own local objectives this may conflict with the overall success of the supply chain and of the other stages. In many cases, information passed from one stage to the next is delayed, incomplete, misleading or inaccurate. This makes coordination a challenge.
Supply Chain Management (SCM) refers to a management concept, designed to synchronize and internal operational and strategic capabilities between enterprises and the integration into a unified, compelling market forces. As a general philosophy, supply chain management is focused on developing innovative solutions that create value for customers unique, personalized sources. Traditionally, the role of supply chain management business plays within the cement industry. Cement manufacturing process of supply chain management will enable the seamless and integrated logistics channel to maintain a continuous flow of cement source from raw materials to end users. In addition, (Supply Chain Management) is defined as `in order to fulfill (Ultimate Edition) customer demand and improve the overall competitiveness of the supply chain, the purpose of integrating
A supply chain is an arrangement of associations, individuals, exercises, data, and assets included in moving an item or administration from supplier to client. Supply chain exercises convert regular assets, crude materials, and parts into a completed item that is conveyed to the end client. In advanced supply chain frameworks, utilized items might re-enter the supply chain sometime or another where lingering quality is recyclable. Supply chains connect value chains. A common supply chain starts with the natural, organic, and political regulation of characteristic assets, emulated by the human extraction of crude material, and incorporates a few creation interfaces before proceeding onward to many layers of storage houses of steadily diminishing size and progressively remote geological areas, and at last arriving at the customer.
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which