Extending Chapter Ten

Hello people! How is your day going? Hope it's all smiles and rainbow! So this blog will be about chapter ten : Extending the Organization – Supply Chain Management. In this topic we will learn about the components of a typical supply chain, the relationship between decision making and supply chain management, changes resulting from advances in IT that are driving supply chains and the best practices for implementing a successful supply chain management system. Hope you enjoy the read.

Supply Chain Management

The average company spends nearly half of every dollar that it earns on production. In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains.

Some of the basic Supply Chain are:

• Materials flow from suppliers and their “upstream” suppliers at all levels.
• Transformation of materials into semi-finished and finished products through the organization’s own production process.
• Distribution of products to customers and their “downstream” customers at all levels.

Organizations must embrace technologies that can effectively manage supply chains.

Information Technology’s Role in the Supply Chain

IT’s primary role is to create integrations or tight process and information linkages between functions within a firm.

Factors Driving SCM:

Visibility

• Supply chain visibility is the ability to view all areas up and down the supply chain.

• Bullwhip effect occurs when distorted product demand information passes from one entity to the next throughout the supply chain.

Consumer Behavior

• Companies can respond faster and more effectively to consumer demands through supply chain enhances.

• Demand planning software generates demand forecasts using statistical tools and forecasting techniques.

Competition

• Supply chain planning (SCP) software uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain.

• Supply chain execution (SCE) software automates the different steps and stages of the supply chain.

SCP and SCE in the supply chain

Speed

Factors:

Supply Chain Management Success Factors

SCM industry best practices include:

• Make the sale to suppliers
• Wean employees off traditional business practices
• Ensure the SCM system supports the organizational goals
• Deploy in incremental phases and measure and communicate success
• Be future oriented

SCM Success Stories

Numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of integrated supply chains. DSSs allow managers to examine performance and relationships over the supply chain and among suppliers, manufacturers, distributors and other factors that optimize supply chain performance.