Supply Chain Management
Supply Chain Management
Supply chain management is defined as a combination of artistic knowledge and science that companies adopt in a bid to improve the acquisition of raw components crucial to product innovation and service delivery to the customers. There are five main components of Supply chain management. They are plan, source, make, deliver, and return (Wikipedia, 2016). In more definitive terms, planning is the core and referred to as the strategic portion. The source identifies the supplier that has the responsibility of goods and services to the company. The make component covers manufacturing, deliver is the logistics and return is the most problematic part. It encompasses managers to design ways for flexibility and accommodating to handle defective products from the consumer. Supply chain management relies on ERP (Enterprise Resource Planning) for mixing of information that is likely to flow fast inside departments. Such SCM applications involve the upkeep of a stable linkage that promises dependability and efficiency.
A company’s key goals for supply chain management is to achieve efficient fulfillment of demand, drive outstanding customer value, enhance organizational responsiveness, build network resiliency, and facilitate financial success. Advancing customer service & improving bottom line impacts customer service by making certain the right product mixture and amount are carried in a timely manner. Furthermore, products should be accessible in the position that customers expect. Consumers must also receive excellent after-sale customer backing. Refining the bottom line has a remarkable influence on the base line. Firms value supply chain managers since they reduce the use of large set assets such as plants, storerooms and transportation vehicles in the supply chain. Cash flow is boosted because if distribution of the product can be rushed, profits will also occur quickly.
Responsiveness can be defined as the ability of the supply chain to respond purposefully and within an appropriate timeframe to customer requests or changes in the marketplace. In contrast, a supply chain can be considered to be efficient if the focus is on cost reduction and no resources are wasted on non-value added activities. Balancing the conflict between these two dimensions is where the real challenges lie.
Having a simultaneously responsive and efficient supply chain is a goal that is difficult to achieve and involves compromises because increased responsiveness comes at the expense of decreased efficiency. There may be some tactics such as planning and approach that allow a supply chain to achieve both a responsive and efficient supply chain (Minnich & Maiheim, 2016). Responsiveness is associated with functional products that are more commodity-like they satisfy rudimentary needs that have steady, anticipated demand and extensive life cycles. Dissimilarly efficiency is associated with innovative products that have a short product life cycle, contribute to high margins, mass variability, and volatile demand. Once a company modifies its supply chain technique to meet manufacturing needs of a product and consider the aspect of volatility being the most successful. Companies should attempt to project supply chains in which the movement of products are rendering to the necessities of the customer over the life cycle of the merchandise. If an organization manages to advance in both areas, it can generate a sustainable competitive advantage. It is possible to achieve this goal by implementing an intelligent business operations working style.
The supply chain of the extended enterprise has become an increasingly complex network of people, processes and technologies. Completely comprised of in-house systems, most supply chains have increased due to the production of computer networks and Internet tools and skills for the past two decades. These revolutions unlocked doors for actual collaboration between partners, distributors and suppliers that extended well outside the barriers of the enterprise.
The most recent technology advancements are the widespread convention of Web tools and social networks, on-demand software, cloud handling adoption and the ubiquity of mobile technologies which have presented challenges and some opportunities for optimum supply chain management (Waart, 2004). Creators have been required to evolve or succumb to enhancing processes as well as circumnavigating tools and best practices for supply chain management. Most have become intensely alert of the tasks and trade-offs that affect their progressively complex, competitive and obvious supply chains. An elevated supply chain stays lean, achieves costs and possibly the most critically, responds promptly to minor variations in demand. Walmart and Toyota, although they are two different industries with variations in their company views they both are similar as such their supply chain management practices mirrors the same vision. Particularly, the two companies are alike in their reactions to challenges and risks faced as well as the integration of sustainable approaches in their supply chain exercises, and their advanced use of technology in which they focus to increase the efficiency of their supply chains.