SUPPLY CHAIN MANAGEMENT

Supply Chain Management

Supply Chain Management

Introduction

The term SCM (Supply Chain Management) refers to tools and methods whose purpose is to improve and automate the supply through the reduction of inventories and delivery times. The term "just-in-time" characterized the concept of minimizing stock throughout the entire production chain.

It is a network of distribution facilities and facilities whose function is based on the raw material, converting them into intermediate and finished products for distribution in the market. In other words, it can be said that the management of supply chain focuses on three basic steps which includes the provision, manufacture and distribution. (Hopp & Spearman, 1996, p. 145)

Significance of SCM

Supply chain management affects all factors of the shareholder value of a company which includes cost, customer service, productivity and revenues. In addition to the Strategic Planning, Supply Chain Management is the most popular methods for several operations of firms.

Nowadays, companies share the various tasks in the value chain, and around the globe. Despite huge tracks that cover the partial products, the companies jointly produce more and cheaper than a company that does the job alone. This happens because the dependence of firms rises with each other and due to the need for ever closer cooperation and more intensive exchange of information. (Viswanadham, 2000, p. 190)

The extreme strategic importance of supply chain management for the competitiveness of businesses is evident in all sectors. At the same time, the gap between the average companies and leading companies such as Wal-Mart, Toyota, and Tesco becomes greater with the passage of time. The best are getting better and faster in almost all industries.

Benefits of SCM

By implementing integrated supply chain management systems, companies can reduce costs, increase revenue, improve service, reduce time to market and use their capital more efficiently. Some benefits associated with efficient supply chain management are:

•Reducing the cost of inventory management, transportation, storage, packaging

•Increased customer satisfaction through the ability to give online orders and configure

•Better service through techniques such as just-in-time and contract manufacturing

•Increase revenues through greater availability of products and their adaptation to customer requirements

•Shorter product cycles

•Increase market share by accelerating the processes from design to production phase

•Flexibility to design products in a shorter time to introduce and withdraw from the market

•Ability to maintain product quality despite removal of large sections of the execution process constant. (Hopp & Spearman, 1996, p. 145)

Collaborative Planning Forecasting and Replenishment (CPFR)

This method is based on improving the supply chain through increased collaboration between actors whose goals are opposites like goals of customers and suppliers, particularly with the sharing of information relating to sales forecasts and planning. The idea is to synchronize the action plans of companies based on the information sharing. CPFR requires an evolution in attitudes with the adoption of strategies to "win-win situation involving coordination, information sharing and standardization of systems for exchanging data.

The exchange of sales forecast should improve performance in terms of inventory reduction and improved quality of service which includes reduction of ...