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Importance of supply chain management to an organisation
Importance of Quality Customer Services
Importance of supply chain management to an organisation
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Introduction The supply chain constitutes the processes, which goods or services go through to reach the end user, including the design, manufacture, and delivery stages (Buxmann et al. 2004). Therefore, it encompasses suppliers, manufacturers, transporters, warehouses, wholesalers, retailers, and customers. According to Datta et al. (2008), all businesses and companies are part of one or more supply chains and depend on them to thrive. Nowadays, most companies want to understand the supply chain concept and the specific roles they should play in it (Ertek & Eryılmaz 2008). Their main objective is to participate in profitable chains to gain a competitive advantage over their competitors. In this regard, supply chain management is the actions that a company does to influence the way its supply chain is operated to maximize profits and cut costs, among other desirable effects (Buxmann et al. 2004). Traditionally, companies have considered activities, such as procurement, maintenance, distribution, and inventory control, as the most important elements in logistics. According to Buxmann et al. (2004), supply chain management not only takes into consideration traditional logistics, but also incorporates customer service, marketing, finance, and product development into the supply chain. Supply chain management views organizations, their products, and the supply chain, as one entity, and aims at understanding, managing, and controlling the various activities that enable the smooth flow of goods or services to the customer (Buxmann et al. 2004). Components of the Supply Chain The five major components of the supply chain are: production, inventory, location, transportation, and communication (Du et al. 2012). Production is concerned with... ... middle of paper ... ...ems Journal, vol. 14, no.7, pp. 295–309. Datta, S, Granger, C, Graham, D, Sagar, N, Doody, P, Slone, R & Hilmola, O 2008, ‘Forecasting and risk analysis in supply chain management’, Working Paper, Engineering Systems Division, Forum for Supply Chain Innovation, Massachusetts Institute of Technology, Boston, MA, pp.13 -25. Du, S, Lu, T, Zhao, L, Xu, B, Guo, X & Yang, H 2012, ‘Towards an analysis of software supply chain risk management’, Proceedings of the World Congress on Engineering and Computer Science, vol. I, San Francisco, CA, pp. 211-235. Ertek, G & Eryılmaz, E 2008, ‘The bullwhip effect in supply chain: reflections after a decade’, CELS 2008, Sabancı University, Jonkoping, Sweden. (Presented by Emre Eryılmaz). Gelderman, J & Weele, A 2005, ‘Purchasing portfolio models: a critique and update’, The Journal of Supply Chain Management, vol. 14, no. 3, pp. 19-28.
W.C. Benton, Jr., 3rd Edition, “Purchasing and Supply Chain Management.” (2010). Text. 2.
...n Empirical Comparison of Anticipatory and Response Based Supply chain Strategies.” The International Journal of Logistics Management. 9: 2; 21-33. Lair, Noor Ajian Mohd, Awaluddin Mohamed Shaharoun and Mohamed Shariff Nabi Baksh, “JIT Implementation across A Supply Chain and It effects on Inventory Distribution”, http://www.moste.gov.my/kstas/NSFWorkshop/NSF/nsf%5CAAI16.DOC Lenzini, Joshua M (2002) “The Army's answer to supply chain management Army Logistician”; Fort Lee; Sep/Oct 2002 Li, Yuan, Fan, Zhiping and Zhao, Xuan (1999). “An Integrated Framework of Supply chain Management System.” Software Engineering Conference 1999. Proceeding sixth Asia Pacific. 196 – 199 Pagh, Janus D and Martha C Cooper (1998) “Supply chain postponement and speculation strategies: How to choose the right strategy”, Journal of Business Logistics, Issue # 2, Volume 19, Pg. 13-33.
Ewalt, D. M. & Hayes, M., (2002, Sep 30). Supply-chain management: Pinpoint control InformationWeek. Manhasset, 16-19
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart. “Wal-Mart will take responsibility for breaking down larger loads and delivering the product to other Wal-Mart stores” (Ehring 1).
Ferdows, K., Lewis, M., & Machuca, J. A.D., 2003. Zara. Supply Chain Forum: International Journal, 4(2), 62-66.
“Supply chain. Product life cycle processes comprising physical, information, financial and knowledge flow or movements whose purpose is to satisfy end-user requirements with physical products and intangible services from multiple, linked suppliers.” In other words, supply chains compose a network of different companies that cooperate closely for goods delivery.
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.
Kemppainen, K. and Vepsalainen, A.P. (2003), “Trends in industrial supply chains and networks”, International Journal of Physical Distribution & Logistics Management, Vol. 33 No. 8, pp. 701-20.
The main area of focus in this article is on the evolution to a successful business model of Supply-chain management. About two decades ago there were the “traffic” managers with a sole responsibility of transferring freight to outside world. After that came the physical distribution management which was broadened to logistics management. Then the advent of supply-chain management made the transportation distribution and logistics professionals are the key in transforming into an effective business process. The Supply-chain management incorporates the activity of moving goods from raw-materials stage to making it available to the end-user covering the procedures of sourcing and procurement, production scheduling, order processing, inventory management, transportation warehousing, customer service and an information system to monitor all the activities.
Lean manufacturing and just-in-time processing are great business strategies that can severely stress a supply chain. The supply chain and supply chain management is a critical operations management element for any major company to succeed and remain competitive in the global market. The supply chain is one of many pieces critical to maximizing value to the end customer and requires close management to minimize external impacts. If a company is relying on another company to supply the raw materials needed for their production line, then impacts to this other company could impact their supply chain. Careful risk management is needed to optimize performance. As a company expands into global markets and global suppliers, this risk and management challenge is multiplied. The global nature of the company could impact important activities such as transportation, funds transfers, suppliers, distributors, accounting and information sharing. Disruption to the supply chain can significantly reduce revenue, cut market share, inflate costs and threaten production. A major disruption would have obvious impacts to profit, but could have additional intangible impacts to the credibility of the company if products are not delivered on time.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage
This report gives an insight about the various aspects of supply chain management and operational management and also the important strategies involved. It also explains the importance of managing the supply chain in the business perspective.
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.
Lee, H. L. (2004, October). The Triple-A Supply Chain. Retrieved April 29, 2014, from ftp.software.ibm.com website: ftp://ftp.software.ibm.com/software/emea/dk/frontlines/Tripple_supply_chain_Havard.pdf
A supply chain entails various entities that are involved in the beginning to end business process of delivering a product (good or service) to its end consumer (Cooper, Lambert & Pagh 1997). This process of supply chain management (SCM) consists of many activities and information flows such as the procurement of materials, the process of manufacturing and packaging, followed by the storage and warehousing of the finished products before being distributed to retailers for the end user’s consumption (Cooper, Lambert & Pagh 1997; Griffin & Thomas 1996). SCM involves the coordination of the following functions: strategic supplier partnerships, quality of information sharing, management of internal functions and loyal customer relationships (Barbosa-Póvoa, Barros & Blanco 2013). Successful integration of these functions should, in turn, enhance the flow of output and maintain an effective relationship between suppliers and customers and hence ensure their expectations are being met (Hung et al. 2010).