Supply Chain Management



Supply Chain Management

Question 1

In the current environment of business that changes very rapidly, the enterprises have to face demands increasingly important for:

Provide products and services more quickly

With a higher value added

A proper location

With low inventory cost.

Due to the increase competition worldwide, businesses around the globe have concluded to the fact that integrating their internal operations and functions is simply not enough. In short, they have to think from broader perspective, a perspective that is not just limited to themselves, but to every stake holder, and most important channel members. The rigors of business in this competitive environment has made the business realize that they need to share information, technology and material with their suppliers and other channel members to create an integral chain, which starts from the suppliers, manufacturer, distributor, wholesaler and retailer. Innovative measures need to be taken which can benefit all the members in the channel (www.imanet.org). This whole cycle is known as the Supply Chain. Supply Chain (SC) is the whole process of movement of products from the supplier to the retailer from where the customer will eventually buy. This whole chain is synced together through sharing of information by each member in the supply chain.

The Management Supply Chain (SCM) is a philosophy that integrates logistics activities between chain companies in order to reduce time and costs. It combines the functions of enterprise logistics functions of supply chain members (Lu, 2011). The modern day customers have changed. Now they want even better quality, design, varied choice and convenience. Furthermore, they want to take fewer risks, hence are not willing to spend more on a product or service. Customers now have the luxury to choose the product or service from wide array of alternatives. Let's not forget that customers are also an important part of the supply chain, and the whole business depends upon them.

The supply chain of any organization consists of various departments, starting from the raw materials procurements to pre sale and after sales services. Thus, the purpose of Supply Chain Management (SCM) is to make the whole supply chain optimal and highly efficient in nature, where the priority is on efficiency of the whole supply chain rather than on each individual (www.imanet.org).

The Supply Chain Management is ultimately, to form alliances and stable relationships among all members, from the suppliers 'suppliers to customers' customers. However, to achieve a synchronized supply chain is not enough to undertake individual actions in this regard. It should go further and develop a joint strategy to provide benefits to all members.

Question 2

Components of Supply Chain

There are basically five components of a supply chain, which are as follows (SCOR Overview, 2008):

Plan: this includes making a strategy for the SCM operations, and defining specified metrics to measure performance against benchmarks.

Source: this includes the channel members who will be providing the raw materials, in the shape of goods and services

Make: this involves transforming the raw material into finished goods or services, testing them, and packaging ...