These two approaches are different simply because the “push” system was based on best-guess forecast and entailed a large inventory, whereas with the “pull” system approach, inventory matches supply and demand and reorder data. Absolutely, the state of the economy determines which approach should be used. As Larry Lapide, director of demand management at the MIT Center for Transportation & Logistics stated, “during a strong economy and when cash flow is loosened, many companies can get by without rigorous inventory management practices” (); as we can see in the case study with Cisco Systems Inc., they were white-hot during the 90s utilizing the “push” approach, but after the dot-com bubble’s collapse Cisco’s supply chain determined a new approach was necessary in order to not be blindsided again. With this, Cisco’s integrated the new approach following the economic downturn using the “pull” approach; this approach, extracts data and produces inventory according to “demand signals.” Above all, whether the economy is strong or an economic downturn has just occurred, implementing the proper approach is vital to company’s survival.
The different elements that need to come together to bring supply chains to the optimal levels that these companies need are the implementation of supply chain management operations and coordination with IT. In order for failure to not be an end result, the business managers and IT professionals must understand the complexity of reaching these optimal levels, and shall focus on adapting and coming together for greater success. IT plays a significant role in this process as it is the coordinator, adaptor, and connector for the system as a whole, and without it these companies will likely fail.
O’Rei...
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...g up cash by tightening their supply chain and reducing inventory, rather than being blindsided by economic downturn. Through implementing supply chain management and coordinating with IT companies are able to face these tough times head on and manage their way through a downturn.
As shown above, a variety of approaches can be used when adapting supply chains to tough times. Whether a company uses the “pull” approach like Cisco Systems, or the strategy of O’Reilly Auto Parts, each approach shares their differences. In the end, each of these approaches have one particular thing in common and that is the need for supply chain management operation and coordination with IT. In order to bring supply chains to optimal levels and for the company to be able to manage their way through economic downturns these two elements must come together to meet the companies needs.
I recommend a strong buy on Cisco’s stock with a target price of $32.50, a 50% upside from its current price. Cisco has a solid competitive advantage, because there are not many strong competitors in the market. The other firms show a higher P/E ratio than Cisco because they have a lower market share. The company shows a constant growth. Cisco markets its products globally with the highest market shares than its competitors. The main risks for Cisco are worsening of economic conditions or exchange rates. The company has a good growth in sales, which will lead higher profits. The company also gives out an annualized dividend to its shareholders every year.
According to Sehgal, “The push/pull decisions afford a balance between the responsiveness (agility) and cost (lean) (2009)”. Pull systems must be responsive to be effective; push systems are generally more cost effective. Retailers have response immediately to consumer demands but wholesalers like Valley Steel can hold inventories and generate economies of scale to reduce cost.
Case Study of Nortel Networks Vision Statement "Nortel Networks mission is being a company that's valued by its customers, shareholders, employees, and the communities in which our people live, work, and raise their families"[1]. Introduction Nortel's Core Values Our people are our strength: Nortel boasts the importance they place on their employees and the contributions they make to the organization. We create superior value for our customers: The company claims that their products are of the greatest quality and they offer them at competitive prices amongst their industry. We work to provide shareholder value: They realize the importance of the shareholders and thus are determined to give them the greatest "bang for their buck" possible when they issue securities. We share one vision -
Core competencies are a collection of competencies that crosses divisional boundaries, which allow a business to be competitive in a marketplace. This is something that the corporation that the business can do exceptionally well. A core competency should allow companies to expand into a new end markets including providing a significant benefit to customers. This should be hard for competitors to replicate the products and services.
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.
The rate of growth of the company affected the supply chain management system negatively. Sales and the company grew at a healthy rate annually, but the supply chain management system lagged in performance by comparison, based on a monolithic approach to supply chain sourcing that decentralized orders, inventory management, and the movement of products to retail stores independently by
In order to have both an effective and efficient supply chain, managers should be focused on trying to achieve not only a cost effective supply chain, but a flexible one. In today’s economy, because the market is so volatile, trendy, and competitive, flexibility is the key to success. In order to respond to customers’ ever-increasing requirement demands, market leaders have positioned themselves well by continually investing in new key performance indicators, additional technology, improved supply chain networks, and streamlining efforts (Source One INC, 2013). This helps to maximize flexibility and overall responsiveness. With increased flexibility, leaders recognize that supply chains must be adjusted to meet different customer needs. In my research I will analyze Gate Gourmet’s use of information technology and the importance of supply chain integration.
“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.’
Cisco Systems, Inc. is a leader in networking for the internet, they develop hardware, software, and services to help create internet solutions that make internet networks possible. Cisco was founded in 1984 by a small group of computer scientists from Stanford University. They are a worldwide company with headquarters in: San Jose, California, Amsterdam Netherlands, and Singapore. Currently, they employ approximately 74,000 people throughout the world. Cisco operates on a set of values which include: change the world, intensely focus on customers, make innovation happen, win together, respect and care for each other, and always do the right thing. They show these values through global involvement in education, community, and philanthropic efforts. (Cisco, 2004)
‘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...
Supply chain management, whether in a traditional or E-commerce environment, involves distributing products, goods and services from point of manufacture to the delivery of the final product. Supply chain management, whether related to B2B or B2C retailers involves manufacturing, storage, distribution and delivery of products and services to consumers and other businesses. In addition, the supply chain philosophy ensures that customers receive the right products at the right time at an acceptable price and at the desired location. Increasing competition, complexity, and geographical scope in the business world have led to the continuing improvements in the capabilities of the personal computer and have made the optimization of supply chain performance possible. Electronic mail and the Internet have revolutionized communication and data exchange, facilitating the necessary flow of information between businesses, suppliers and customers within the supply chain (Helms, Marilyn, 2008). B2B supply chain management is slightly more complex than B2C transactions, as B2B wholesalers, distributors and manufacturers are typically working with larger corporate entities. For supply chain management to work in a B2B or in a B2C environment, the focus must be on providing customers with the utmost in quality services. This is especially the case since in today's economy what firms are mainly selling to each other is information, not just in the case of services such as banking and digital applications, but even when the product concerned is a physical product. The real value added comes from optimizing price and specification, as opposed to the physical transfer of the product (Vasarhelyi, Miklos, 2007).
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
rules, for computers to talk to one another. These protocols are carried out by sending
19. Sodhi, Sunil Chopra and ManMohan S. Managing Risk to Avoid Supply Chain Breakdown. MITSloan Management Review. [Online] October 15, 2004. [Cited: February 25, 2010.] http://sloanreview.mit.edu/the-magazine/articles/2004/fall/46109/managing-risk-to-avoid-supplychain-breakdown/.