Supply Management and Value Added Processess

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Expectation that top management in companies – both in private and public sector – places on supply is growing exponentially, mainly because of the permanent drive to lower cost and retain competitive advantages on the market, but also to create additional value. Research has shown that the perception of impact of supply chains on the results of businesses will grow in the future, taking a more prominent role in company structures over time.
According to research conducted by Monczk (2010), there is a strong indication that top level managers will be included in the supply chain much more in the future, mainly in the form of adding value through supply than in cost reductions. Top companies are already focusing their efforts on supply chains in the process of making business plans, and consider that better supply management can lead to better results in all branches of the company (Kearney, 2002). According to Dwyer (2010) there is evidence to show that companies allocate larger amounts of expenditure towards supply. This means that supply chain, besides raw materials, maintenance materials and other functions takes an increasingly prominent role in decision making regarding machinery, construction/acquisition of property and related equipment procurement. Top management in leading companies, almost without exception, finalises decisions concerning supply in over 70% cases – excluding salaries – which led to nearly 10% cost reduction (Dwyer, 2010). When compared to companies where management finalises up to 40% of costs, the difference is obvious, the latter has shown only 1% cost reduction.
Supply is slowly coming to the forefront of business management, and corporate leaders everywhere begin to realize how benef...

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