Critical Analysis on Segment 5: It and Supply Chain Management

Critical Analysis on Segment 5: IT and Supply Chain Management

Dr. Charla Griffy-Brown

EMBA 102N / MBAA678

By: Timothy Rhiney

Date: 09/05/2014

Introduction

Supply chain management is Integral to the success of any business whose

broad focus is on the production process of goods and services as the overall operation

of the company. Due to supply chain integration, logistic professionals are now

occupying more influential positions on the organization charts of their respective

companies. Information Technology (IT) supported solutions will be the future trend for

Supply Chain Management Systems (SCMS). The impact of a working or non-working

SCMS affects all sectors of the business ranging from the suppliers, wholesalers,

retailers, and customers. The concept of the SCMS includes all the processes that involve ensuring customer satisfaction, which means that the right products are delivered to the customer at the right time for an acceptable price and delivered at the desired location (Ambrose, Marshall, & Lynch, 2010).

        With this paper, I will conduct a critical analysis on the key drivers of a successful Supply Chain Management System and its vital role in production to finish goods stage. Pathways to Supply Chain Management Systems Excellence

• Cost effectiveness
• Inventory management
• Performance and behavior of the SCMS
• Customer satisfaction

         Cost effectiveness is important for a SCMS because it helps to improve the financial position of the company by increasing profit leverage through reduction and control of the supply chain costs while increasing the firm’s profits. Also, it increases the firms cash flow by speeding up the finished product flows to the customers. Other benefits of supply chain management to the firm include reduced operating costs which are attained through decreased purchasing cost as suppliers deliver expensive products quickly as possible to avoid costly inventory mistakes. With decreased cost in the total supply chain, managers can design networks that could serve to meet the goals of the customer making them efficient and increasing the competitiveness of the firm in the market place (Bowersox, 2002).

A. Business Analysis

            In today's business climate change is consistent and more competitive as ever in nature. Companies today not only need to operate at a lower cost to compete, they must also develop its own core competencies to distinguish itself from competitors and stand out in the market place. I believe that companies should seek ways to decrease operations cost by implementing a SCMS that will help to minimize existing and anticipated supply chain disruption risks while managing their supply chains costs that are directly related to inventory like, production, and transportation cost. These costs combine have an overall effect on cost effectiveness (Carter & Rogers 2008).

Inventory is seen as incurring costs, or waste, instead of adding and storing value, contrary to traditional accounting. An efficient organization has to maintain a small inventory. However, there can be costly penalties for failure to keep enough goods on hand, ranging from delayed profits to loss of customers. This way of working encourages businesses to eliminate inventory that does not compensate for manufacturing process issues, and to constantly improve those processes to require less inventory (Ballou, 2004).

1. Business Analysis

A highly integrated inventory management process will help to reduce time between orders and receipt. This would give a company a shorter lead-time, which helps to reduce inventory levels and free up cash that can be used on other projects. My thoughts are that overall, the order fulfillment process involves understanding both internal capabilities and external customer needs, and matching these together so that the supply chain maximizes profits while minimizing costs and waste.

Performance and behavior of the SCMS is critical to the overall success of a company’s supply chain. As an Account Manager, I work in a supplier‐dominated channel system, and what I come to understand is that the way a supplier manages its channel system has a profound influence on its retailers overall operations. The effect of supplier channel management behavior on retailers market orientation and overall business performance is examined in the context of automotive supplier‐dealer relationship. I researched the effect of channel management behavior along three dimensions, directive, participative, and supportive, the results support that the participative and supportive management styles have a positive effect on market orientation. Further analysis shows that both supplier management leadership and market orientation are linked to productivity, volume, and profit performance measures.