Supply chain management.

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ribes some of the key elements in supply chain management. It focuses on business analysis,
supplier management, and partnerships and networks.
An integrated supply chain, where every organisation is working together to produce the simplest
and most cost-effective cost-effective,
n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care
result deemed necessary and appropriate. flow of resources, is of importance to every supplier
since supply chain activities can account for between 5 to 20 per cent of sales. Many businesses
have come to recognise that the future lies not with individual firms, but with networks of allied
organisations and technology has evolved to offer greater potential for cooperation.
Definition
Supply chain management is an effective tool for business process improvement. It begins with the
source of supply and ends at the point of consumption. Supply chain management covers the flow of
materials and information from suppliers, through a number of value adding processes and
distribution channels, to the customer.
The aim of supply chain management is to achieve a balance between the goals of high quality
customer service and low inventory and unit cost. It is concerned with a range of issues, including:
* purchasing
* the physical movement of materials
* materials management Materials management is the branch of logistics that deals with the
tangible components of a supply chain. Specifically, this covers the acquisition of spare parts and
replacements, quality control of purchasing and ordering such parts, and the standards involved in
ordering,
* manufacturing management
* supplier management.
Advantages of supply chain management
If properly designed and managed, supply chain management will:
* improve customer service
* achieve a balance between costs and service
* reduce costs throughout the supply chain
* improve relationships between buyers and suppliers
* provide a competitive advantage to all the organisations in the supply chain.
Disadvantages of supply chain management
Supply chain management fails if:
* power is retained and wielded by one organisation in the supply chain
* strategic fit is lacking and management styles are incompatible incompatible adj. 1) inconsistent.
2) unmatching. 3) unable to live together as husband and wife due to irreconcilable differences. In
no-fault divorce states, if one of the spouses desires to end the marriage, that fact proves
incompatibility, and a divorce there is a lack of willingness to cooperate to the benefit of all.
Action checklist
1. Gain an understanding of the marketplace
An understanding of the business environment is needed in order to determine where the supply
chain management strategy can be applied to best effect. Identify the market characteristics of each
product or service. Consider:
* customer needs
* pressures from suppliers
* the level of competitor activity.
Carry out a SWOT analysis SWOT Analysis
A tool that identifies the strengths, weaknesses, opportunities and threats of an organization.
(Strengths/Weaknesses/Opportunities/Threats) and look at your current position. Consider what
other organisations are doing to compete on quality, service, delivery and value.
2. Analyse analyse
v. Chiefly British
Variant of analyze.
analyse or US -lyze
Verb
[-lysing, -lysed] or -lyzing, your business
Summarise Verb 1. summarise - be a summary of; "The abstract summarizes the main ideas in the
paper"
sum, sum up, summarize
sum up, summarize, summarise, resume - give a summary (of); "he summed up his results"; "I will
now summarize" and review the existing core competences Core competence
Primary area of expertise. Narrowly defined fields or tasks at which a company or business excels.
Primary areas of specialty. of the organisation. What business are you in? Which operations are
core to the operation and which could be outsourced?
Combine the information on customer needs and strategic priorities to identify key business areas
where an integrated supply chain management can have a benefit.
Analyse where you sit within the supply chain. Who are your suppliers and customers? Do you have
good relationships with them? What level of cooperation currently exists?
3. Analyse your existing supplier base
Produce a list of the suppliers for each product area. Evaluate them against a set of performance
criteria. These might include price, reliability, responsiveness, delivery arrangements, use of quality
systems, and product specification.
How many suppliers do you need? Most organisations use far too many suppliers. The main causes
of this are:
* the belief that being single-sourced is risky
* poor supplier performance forcing you to look for alternatives
* a growth in demand which cannot be met by an existing supplier
* the idea that competition between suppliers keeps the price down.
Having too many suppliers increases both the management task of controlling them and the
associated administrative costs administrative costs,
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of
dental services provided. . Reducing the total and moving towards single-sourcing can produce such
benefits as:
* lower administration costs
* more time to manage each supplier
* an improvement in the relationship between you and the supplier
more responsive problem solving problem solving
Process involved in finding a solution to a problem. Many animals routinely solve problems of
locomotion, food finding, and shelter through trial and error. , resulting from a greater
understanding of difficulties and requirements and better communication.
4. Categorise Verb 1. categorise - place into or assign to a category; "Children learn early on to
categorize"
categorize
reason - think logically; "The children must learn to reason" your suppliers with the aim of
reducing the overall total
Use some criteria, such as underperforming, preferred and strategic. Look to working with each
category to bring cost reductions to your business and to the supply chain.
Those that are underperforming are likely to bring few improvement ideas to the supply chain. Each
represents a cost in terms of negotiation time and servicing. A substantial reduction in their number
will free up time to spend on more productive supplier activities.
Enter into negotiations with preferred suppliers to explore the potential to reduce inventory,
distribution, handling, and warehousing costs. Cost transfers may be negotiable NEGOTIABLE. That
which is capable of being transferred by assignment; a thing, the title to which may be transferred
by a sale and indorsement or delivery.
2. in return for commitments to longer-term supply.
Give consideration to your customers. Are you a preferred supplier or a strategic supplier to them?
Have you discussed inventory, distribution, handling and warehousing costs with them? Have you
been offered a commitment to long-term supply?
5. Investigate supply chain partnerships
Partnerships are the natural next level in the evolution of the supply chain. Partnerships allow
organisations to work together to take advantage of market opportunities and to respond to
customer needs more effectively than they could in isolation. Partnering means:
* sharing risk with others and trusting them to act in joint best interests
* a strategic 'fit' between partners so that objectives match and action plans show synergy The
enhanced result of two or more people, groups or organizations working together. In other words,
one and one equals three! It comes from the Greek "synergia," which means joint work and
cooperative action.
* finding complementary skills, competences and resources in partners
* sharing information which may have been privileged or confidential
* involving suppliers at the earliest stages of design of a new product.
Start with one particular supplier with whom you already have a good relationship or an emerging,
forward-looking supplier.
Establish a partnering champion within your organisation--someone at senior level who will become
responsible for laying the foundation of the partnership and making it work in the start-up phase.
The actions needed to move towards a partnership include:
* inviting participation to improve relationships and find mutual cost benefits
* encouraging the suggestion of ideas of benefit to both parties
* starting the process of developing trust.
6. Set up a supply chain network
This stage involves broadening these partnerships to include your suppliers' suppliers and your
customers.
A process map of the entire supply chain can help. Use this map to explore total costs and
movements. Does the map identify any areas of wastage wastage
a loss of product or productivity; in terms of animal production includes losses due to deaths of
animals, lowered production from survivors, including reproduction, and lost opportunity income.
wastage Fetal wastage, see there ?
Gaining real commitment from all members of the supply chain means that total costs can be kept to
a minimum to the benefit of everyone. Allow plenty of time for a win/win scenario to emerge. Trust
takes time to develop and can be quickly lost. Each organisation is responsible primarily for its own
survival however and cannot always put the needs of others before its own.
7. Monitor the chain
Setting up a supply chain is only the first step. Ensuring that it operates as planned and delivers the
benefits to all parties is a critical ongoing activity.
Ensure that appropriate measures and indicators are analysed on a regular basis to ensure that
everything is working to plan, so that any shortcomings A shortcoming is a character flaw.
Shortcomings may also be:
Shortcomings (SATC episode), an episode of the television series Sex and the City
can be quickly identified and action taken if necessary. For example, delivery delays could be due
to short-term problems, such as a strike at a port, or due to a potentially serious longer-term
problem, such as materials shortages.
Performance indicators should help quantify Quantify - A performance analysis tool from Pure
Software. the benefits of the chain in terms of reduced costs, reduced delivery times, improved
quality, reduced administration and, above all, improved customer satisfaction.
Dos and don'ts of supply chain management
Do
* Look for long-term gain Long-term gain
A profit on the sale of a capital assets held longer than 12 months, and eligible for long-term capital
gains tax treatment. over short-term benefits.
* Aim for improvements in customer service.
* Strive for high levels of trust and cooperation.
Don't
* Forget to put your own house in order first.
* Ignore areas of potential conflict.
* Enter into partnerships without the genuine commitment from senior management in each
organisation.
Further reading
Books
Supply chain strategies: customer driven and customer focused, Tony Hines Oxford: Elsevier
Butterworth Heinemann, 2004
Fundamentals of supply chain management: twelve drivers of competitive advantage John T.
Mentzer Dr. John T. (Tom) Mentzer (born December 7, 1951 in Harpers Ferry, WV) is the Harry J.
and Vivienne R. Bruce Chair of Excellence in Business Policy in the Department of Marketing,
Logistics and Transportation at the University of Tennessee. Thousand Oaks Thousand
Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964.
Avocados, citrus, vegetables, strawberries, and nursery products are grown. , Calif.: Sage, 2004
Managing the supply chain: the definitive guide for the business professional David Simchi-Levi,
Philip Kaminsky and Edith Simchi-Levi New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts,
Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario
and the Canadian province of , NY: McGraw-Hill, 2004
Supply chain excellence: a handbook
For the handbook about Wikipedia, see .
This article is about reference works. For the subnotebook computer, see .
"Pocket reference" redirects here.
for dramatic improvement using the SCOR SCOR Scientific Committee on Oceanic Research
SCOR Supply Chain Operations Reference model
SCOR Small Corporate Offering Registration
SCOR Specialized Center of Research (White Plains, NY)
SCOR Second Cousin Once Removed model Peter Bolstorff and Robert Rosenbaum New York, NY:
AMACOM AMACOM American Management Association , 2003
Journal articles
Supply chain collaboration: making sense of the strategy continuum Continuum (pl. -tinua or -
tinuums) can refer to:
Continuum (theory), anything that goes through a gradual transition from one condition, to a
different condition, without any abrupt changes or "discontinuities"
, Matthias Holweg and others European Management Journal, vol. 23, no. 2, April, 2005, pp 170-181
Ten guiding principles for high impact SCM (1) (Software Configuration Management, Source Code
Management) See configuration management.
(2) See supply chain management. , Stanley E. Fawcett and Gregory N. Magnum Business Horizons,
vol. 47, no. 5, 2004, pp 67-74
Learning to see how does your supply chain function, Nigel Wood Control UK, vol. 20, no. 7, 2004,
pp 12-15
Thought starters
* How many suppliers do you have? How large should your supplier base be?
* What is your company's attitude to the supply chain?
* How do your supply chains measure up to the demands of customers?
* Do you have arrangements to work jointly with your suppliers to find improved ways of working?
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