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Importance of supply chain management Essay
Explain the importance of supply chain management
Importance of supply chain management Essay
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A supply chain network is the sequence of processes that are entailed in the production and distribution of goods. In the modern business environment, companies are relying on their strategic supply networks to deliver their products to the potential clients’ place of convenience. Before organizations focus on supply chain management, the business leaders have one main task of determining what the entire chain encompasses. A clear definition of the required supply mechanisms enables companies to have their goods delivered to the customers in good time, and in good shape. A supply network usually requires a multiplicity of relationships as well as numerous paths through which both information and products can travel. In this case, a supply …show more content…
The management team understands that lack of cooperation between suppliers, manufacturers, retailers, or even wholesalers makes it impossible to satisfy the needs of the customers. As such, the company ascertains that all the supply network partners have access to the products all through to ensure that they meet the customers’ demands. Being ranked position 6 out of the best supply chain operations globally is not a light achievement. The company is thus concerned about enhancing the utmost professionalism in operations to achieve competitive advantage. The supply network executives in Coca-Cola carefully nurtures effective supplier relationships to create an operational and sustainable model. It is clear that a faulty supply network hinders a company’s economic growth and development hence the need to utilize proper mechanisms. The evident success of Coca-Cola’s supply chain concept arises from the company’s ability to satisfy the competition priorities as well as stakeholders on a continuous basis. The existence of conflicting objectives in the supply network requires proper intervention mechanisms. To evade this complication, the Coca-Cola supply network management concentrates on empowering the purchasing department. This department maintains steady and large quantities of beverage products to assure the company of flexible delivery …show more content…
For a long time, Coca-Cola’s supply network has been characterized as outdated compared to the improved product supply mechanisms being applied by other well-performing companies. The prolonged use of an outdated supply chain ended up interfering with the company’s efforts to achieve growth and development. Recently, the company saw the necessity of improving its supply network operations to guard its market share against competitors. The modern business environment is dynamic and complex hence the need for proper product networks. Coca-Cola’s management failed to engage in a continuous upgrading of their supply system hence losing huge volumes of
Analysis of the carbonated soft drink (CSD) industry shows that there are 2 important players i.e. Concentrate Producers and Bottlers. Focusing on the downstream of the supply chain it is to be pointed out that concentrate producers incure relatively low fixed costs with respect to production plant, staff, equipment and R&D as the concentrate is produced of a more than 100 years old formula and relatively cheap raw material (e.g. caffeine). Concentrate is shipped to bottlers which incure relatively high fixed cost with respect to plant, equipment and staff and which add carbonated water and high fructose corn syrup to the concentrate, bottle or can, package and ship it to the respective retailer. Besides that CDS hold a big stake in the direct delivery of concentrate to diverse fountain accounts like McDonalds, Burger King etc.
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.
Generally, a superior supply Chain is an important and unique source of competitive advantage. Its importance is especially illuminated in Multinational companies such as Toyota. Putting this into consideration, the question that now begs for an answer is whether Toyota’s supply chain is effectively serving the organization. Without a doubt, Toyota ha...
“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.
middle of paper ... ... Retrieved November 20th, 2013, from http://www.coca-colacompany.com/our-company/suppliers/supplier-and-customer-partnerships Guffey, M. E., & Loewy, D. (2010). Business Communication: Process and Product. Mason, OH: South-Western/Cengage Learning. Jones, G. R., & George, J. M. (2011).
On the opposite side, Coca Cola invested in suppliers relationships. More than thousands of Coca Cola suppliers make Coca Cola distribution activities more efficient comparing with peers. For Coca Cola vertical integration is not a solution as expensive mode...
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 working relationship with suppliers to build a supply chain that is sustainable can help the company cut cost, create new sources of revenues, better manage business risks, and build the value of their brand. Through efforts, such as improved energy efficiency and streamlined supply chain logistics, Nestle can considerable reduce it cost thus increase profitability in the future. It is also recommended that Nestle should incorporate bottom line sustainability issues into its corporate risk management as this would work towards reducing risk. Show casing innovative solutions to negative impacts of the supply chain operations can work towards brand value. Therefore, sustainable supply chains can reinforce Nestle’s commitment to remaining profitable for the benefit of the company’s
Our next step is to analyze industry environment by applying Porter’s five forces model. In my opinion, bargaining power of the suppliers is fairly weak. The Coca-Cola Co has a pretty good system in place, where it manufactures its own signature concentrate and then sells it to the bottling franchises, which are contracted for 10 year periods. Bargaining power of the buyers is somewhat escalated, since we are still in recession and its natural for consumers to go after the better deal. Potential Entrants create additional production capacity and may eventually generate overcapacity, which results in a forceful price lowering. The variety of the substitute products is one of the strongest forces, it affects brand loyalty and makes it a lot more difficult for the Coke to compete. Last but not least, is the rivalry among existing firms. The main peril for the Coca-Cola
‘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...
As pointed by Parsons A.L (2002), there was increasing dependent on the relationship and customers is demanding to receive high standard of products and services for them to sustain the business in the intense manufacturing environment. Besides, Xu et al. (2008) has highlighted that supplier is developing a long-term relationship with their crucial suppliers to increase the competitiveness and to establish an effective and efficient supply chain. Trend (2005) also mentioned that work closely in partnership with suppliers is the only way to survive in today’s competitive business environment.
A supply chain is an arrangement of associations, individuals, exercises, data, and assets included in moving an item or administration from supplier to client. Supply chain exercises convert regular assets, crude materials, and parts into a completed item that is conveyed to the end client. In advanced supply chain frameworks, utilized items might re-enter the supply chain sometime or another where lingering quality is recyclable. Supply chains connect value chains. A common supply chain starts with the natural, organic, and political regulation of characteristic assets, emulated by the human extraction of crude material, and incorporates a few creation interfaces before proceeding onward to many layers of storage houses of steadily diminishing size and progressively remote geological areas, and at last arriving at the customer.
A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system [1]. The basic objective of supply chain is to “optimize performance of the chain to add as much value as possible for the least cost possible.
PepsiCo also realeased a brief on the custom supply chain planning solution.PepsiCo went to PCA ( Pratical Computer Applications) asking for improvements on how they managed their supply-chain planning and forecasting operations. PepsiCo's Supply Chain Planning System provided a secure web-based connectivity. The new software was significantly less and and went along with PepsiCo's practices and perfomance metrics.
Coca-Cola is stress in their customer relationship as an organization. For example, Coca-Cola will corporate closely with their largest customers in order to build up versatile relationship. Moreover, operational linkages and information sharing system is important for keeping the product and service that offered is suit with the customer’s needs and wants. Coca-Cola has refined their collaborative customer relationship process in three main markets which are Mexico, Japan and Switzerland. They work with their customers in order to provide the better-quality beverage selection to every consumer. For instance, Oxxo which is a convenience store chain that has 5700 stores in 30 states in Mexico has recognized the Coca-Cola Mexico’s Collaborative Customer Relationship program. This program helps Coca-Cola and their customers to understand the consumer preference. On the other hand, it enables Coca-Cola to transfer a transactional and commercial link to a collaborative and multifunctional business relationship.