Supply Chain and Inventory Management
December 6, 2008
Supply Chain and Inventory Management
With the increased globalization, competition and complexity in global supply chains, more companies have realized that supply chain management is critical to the optimal organizations overall operation. It is no longer just the responsibility of the warehouse manager and logistics director (Pundir, 2008 and Wharton). In the past, many organizations didn’t manage their supply chains they left that up to the suppliers. Usually the supply chain planning, marketing production and inventory management in most organizations operated as separate departments (Stevenson, 2007). Businesses have recognized the strategic importance and the need for effective and efficient supply chains in operations management (Stevenson, 2007). This paper will deal with quality issues, the importance of operations management collaborating with supply chain, and inventory management.
Coordinating the transport of supplies, information technology, services and products between suppliers and partnering businesses within an organization is what supply chain management is all about (Alade, 2004). In today’s world the customers are more demanding and businesses are working hard to meet those demands. The customers want more styles, better quality and longer lasting products and they want them fast. The only way that organizations can delivery is by insuring that their supply chains are aligned with the operations of the organizations.
In order to align the supply chain with the organizations operation they must first make sure the supply chain is included in the strategic decisions process along with the senior executives in the organization (Rees...
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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).
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Today’s organizations are faced with increasing levels of global competition, customer’s demanding value for their money and high stakeholders expectations on investment returns. Gattorna (2003), notes that firms are now pursuing supply chain management as a strategy to competitive advantage. Firms in a supply chain relate, transact, and partner on different levels; from product design and development to product delivery. Through supply chain management a firm pursues value creation through timely product delivery, cost management, inventory control and customer service (Beamon, 1999).They do so individually or through synergies formed with other organizations to increase customer service
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“The concept of Supply Chain Management is based on two core ideas. The first is that practically every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain. The second idea is that while supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. The result was disjointed and often ineffective supply chains.” (Handfield)
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‘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...
Essentially, the world is a large supply chain. The main problem involved in supply chain management which including the fast growth of multinational organisations and partnership in the strategic alliance ways; world enlargement and procurement; variation in the price of natural gas and environmental issues, these issues have the symbolic impact on organisation strategy and the bottom line. The reason for these rising direction, supply chain management is the most important commercial guideline in the global today (University of San Francisco,
The key performance drivers of Supply Chain Management (SCM) are - facility effectiveness, inventory effectiveness, transportation effectiveness, information effectiveness, sourcing effectiveness, pricing effectiveness, delivery effectiveness, quality effectiveness and service effectiveness. These drivers include various performance markers that may be measured quantitatively by gathering information and applying them in SPSS. The works here may principally be quantitative with spellbinding measurable investigation. In the current world, practical supply chain management to help the triple primary concern, (nature, domain, and economy) is likewise included in the extent of supply chain performance drivers. This is relatively a quite new research region.
In the first week we discussed supply chain maturity, supply chain strategy and the ten traits of the best supply chains as which are presented in the textbook, Diagnosing greatness: Ten traits of the best supply
Jump up^ Taylor, Victoria. "Supply Chain Management: The Next Big Thing?". Sept. 12, 2011. Business Week. Retrieved 5 March 2014.
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,