Introduction 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, …show more content…
Despite there being a stable state established in the market of pampers, there have been variations in the way that the products of this company have been demanded from their manufacturing companies (Christopher, 2016). On having a closer look at the differences and swings in the way that demand is made in this organization, it was clearly found out that the differences in demands were greatly affected by the ordering practices of the product retailers. The way that wholesalers, and other product distributors acquired the product also resulted to some variations being experienced in the market (Simchi-Levi, Simchi-Levi, & Kaminsky, …show more content…
Amongst some of the factors that are responsible to causing the bullwhip effect include that of all the participants in the supply chain process making their trade predictions in isolation just like in the case of pampers as explained above (Turban, et al., 2002). The process of order batching may also take a central role in bringing about the effect for the reason that most of the changes that are brought about by product demand happen to be hidden. Additionally, it is important to note that most of thee practices may be exaggerated by some of the marketing efforts developed by the company thus bringing about the snowballing effect to the organizations (Christopher,
consumers continue to trade up for indulgent, high-quality products” (The Hershey Company , 2013). When evaluating the Hershey Company through Porter’s Five Forces analysis, the threat of new entrants is low because of the occurrence of economies of scale, the variance in products that are produced, the need for large capital requirements, the being of switching costs, the absence of access to distribution channels, and the regulations that are in place for the food manufactures. A hefty number of buyers and the relatively low-slung profits from the product amplify the bargaining power of prospective buyers. The bargaining power of suppliers is decreased because the supplier does not shame any likely threat of forward integrations. The prominence
Managing the volatility of demand is known to be one of the biggest challenges faced by supply chain managers. According to Gerard Cachon, Taylor Randall, and Glen Schmidt, the bullwhip effect is when “the variance of the flow of material to the industry (what macroeconomists often refer to as the variance of an industry’s “production”) is greater than the variance of the industry’s sales” (457). Chen, Drezner, Ryan and Simchi-Levi state that,
The availability of the supply itself could impact the demand as well. Since Primark sells by volume and sells standardized models and uses people’s word of mouth as advertisement it is a vital feature that a model is sold in many locations, but how much Primark can supply will be dependent on extra factors as well. The following examples are related to supply factors which may in turn influence demand.
The “Bullwhip Effect” has in the past been accepted as normal, and in fact, thought to be an inevitable part of the order-to-delivery cycle. Yet, the negative effect on business
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.
Supply Chain Management concept is derived from a ‘chain’ based theory. Martin Christopher defines it as the “Upstream and downstream relationship with customers and suppliers defines it in order to deliver a superior value to its customer and suppliers at a lower cost to the chain as a whole”. The focus is on building trust and mutuality between parties.
The Manager´s Guide to Supply Chain Management. F. Ian Stuart; David M. McCutcheon. Harvard Business.
This article helps in gaining the knowledge about the supply chain management and the technological aspects of the system. Supply chain management adds value to the organisation and improves the organisation in all aspects. Many of the companies implement these systems to gain competitive advantage over the others. This article also provides the information about the profits and advantages of the supply chain man...
If someone were to be asked what their profession is and they replied with supply chain management, they would likely be met with blank stares and the question, “what is that”? To briefly sum it up, supply chain management (SCM) is the overseeing of flow efficiency and storage of a product from the point of origin to the point of consumption. In the fairly recent past the implementation of supply chain managers has been increasingly more necessary for businesses to cut costs in manufacturing and distribution. Therefore, as technological advances continue to leap forward, SCM is able to be constantly modified to increase the growth of businesses and generate greater profit.
However, SCM also allows a firm to achieve other related objectives. First, it allows an organisation to reduce costs per unit due to the increased level of efficiency. Supply chain management also reduces the length of the delivery cycle (Havaldar, 2008). Other objectives of supply chain management focus on waste reduction and creating delivery systems that are superior to those of competitors (Havaldar, 2008). From the definition, it is evident that supply chain management’s scope is extensive. It begins with the movement of different raw materials into an organisation, followed by the movement of these materials within the organisation as they are converted into final products. Additionally, supply chain management concerns itself with the delivery of finished goods to the end consumers. The wide scope of supply chain management can distract an organisation from its core mandate. As such, firms opt to concentrate on their core competencies and rely on partners to oversee the majority of supply chain functions. This reliance on partners is facilitated by modern technology which has connected suppliers and customers in new and effective ways (Longenecker et al.,
Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). The term was coined by Keith Oliver, a Booz Allen Hamilton executive in 1982 as an extension of logistics, though some scholars see the terms interchangeable. Logistics, as well as many other terms commonly used in business, originate from military terminology. In business language it generally refers to the management of the flow of goods, information and other resources, between the point of origin and the point of consumption in order to meet the requirements of consumers. In this study it is not necessary
Supply change management refers to managing materials and processes as they move from the suppliers of raw materials to manufacturers to wholesalers to retailers and finally to the customers. It involves managing the supply-side activities to gain competitive advantage and to increase customer value. It also involves coordination among different firms at different levels within the supply chain. A good supply chain management should be both economical and efficient. Supply chain management manages and controls the production, shipment or movement of products and their distribution processes. It consists of various aspects of a business including production, product development, and information systems required to manage the supply and distribution
The traditional outlook of supply chain management only focused on delivery f goods to the customer at the cheapest price possible but the definitions of supply chain has been altered over time.The new supp...
To achieve the goal of efficiently managing the process of forecasting demand, controlling inventory, enhancing business relationships with its stakeholders and receiving feedback, many companies are turning to Internet technologies to Web-enable their supply chain processes (O' Brien, 2005, p.223). A supply chain is the collection of people, tasks, equipment, data and other resources required to produce and move products from a vendor to a customer. A supply chain management system coordinates the tasks involved in the supply chain process. The factors in the supply chain process consist of the product manufacturer, the wholesaler, the distributor and the retailer. The objectives of a supply chain management system are to increase customer value and to establish a solid advantage over the competition (Smallbusiness.chron.com, 2017). An upstream supply chain includes firms’ suppliers and suppliers’ suppliers who are involved in the search and extraction of raw materials. A downstream supply chain has direct contact with customers and includes organizations and processes responsible for delivering products to customers.
Supply Chain Management is important for the survival as well as growth of an Industry. SCM helps in eradication of the communication barrier there is and allows the information to flow in an organized way. It also helps reduce the prolixity by coordinating, monitoring & controlling processes. As a Process, SCM covers the point of origin to point of consumption which means that SCM will take care of the production to sales to make sure the demands of the customer are met and the customer is satisfied. To have a successful SCM, coordinated efforts & cooperation between the organization’s business operations is required. When this criterion is met and the organization’s business operations are in sync then the demand of the customer can be met without overstocking which could save a lot of capital for the company. [1]