SUPPLY CHAIN MANAGEMENT

DIMCO Case Study

DIMCO Case Study

Discuss the current supply chain system at DIMCO.

The concept of Supply chain management (SCM) and its implementation is vital for the efficient operations of any organization. SCM refers to the management of a meshing of interlinked businesses engaged in the quality supplying of goods and service packages asked by end customers (Lucas, 2002). Currently DIMCO utilizes about 1350 raw material and other components that are directly purchased from approximately 375 suppliers globally. DIMCO company has 10 regional warehouses (distribution centre), which are divided as follows: 6 domestic distribution centers and 4 overseas distribution centers. Furthermore, each distribution center supply goods to 12 local distributors and further each local distributor send goods to 35 retailers. However, the company does not have any supply chain arrangements for its worldwide product line for its various consumer items like massage and humidifier. There subsists a desire and need for including DIMCO's distributors and suppliers in the SC system by putting into practice a well-organized SC system that would not distance those distributors and suppliers. CEO of the company knows that she must make a well-versed and unbiased decision as to the sequence of events involved in implementing SCM.

Discuss the advantages that DIMCO can gain by implementing supply chain management.

With the implementation of efficient supply chain management strategy, the company can enjoy various benefits. If we try to write these benefits in the sequence than it would start with efficient demand and supply forecasting, scheduling and planning of the production processes. If the benefits of collaboration for supply chain management were written in a straight line it would start with improved forecasting, planning and scheduling of the manufacturing process, optimal inventory, and reduced lead time, reduced logistics cost and improved profitability. The SC also decreases the margin of errors in the manufacturing process thereby increasing the quality of products that come out of the manufacturing line.

With the introduction of ERP, DIMCO would be able to experience a smooth flow of data between the various departments. The coordination between the functional departments increased resulting in increased efficiency. ERP aids in day to day management and aids in improving the productivity of the organization. The ERP systems cover a wide range of functions like Manufacturing, Customer Relations, Human Resources, Supply Chain management, and it integrates them into a single database. Introduction of ERP to an organization helps it to realize many ...