Supply Chain Management

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Southwest Jiaotong University

School of Transportation and Logistics  

Supply Chain Management

 REPORT  

                   Student 2014330031:  Hayrutdinov Said Jahon

                  Prof:  Jian Ming

2016

                             REPORT QUESTIONS

1. Why do we need the Supply Chain Management?
2. What is the information value in the Supply Chain?

               Why do we need the Supply Chain Management?

The best companies around the world are discovering a powerful new source of competitive advantage. It's called supply-chain management and it encompasses all of those integrated activities that bring product to market and create satisfied customers. The Supply Chain Management Program integrates topics from manufacturing operations, purchasing, transportation, and physical distribution into a unified program. Successful supply chain management, then, coordinates and integrates all of these activities into a seamless process. It embraces and links all of the partners in the chain. In addition to the departments within the organization, these partners include vendors, carriers, third party companies, and information systems providers.

 Within the organization, the supply chain refers to a wide range of functional areas. These include Supply Chain Management-related activities such as inbound and outbound transportation, warehousing, and inventory control. Sourcing, procurement, and supply management fall under the supply-chain umbrella, too. Forecasting, production planning and scheduling, order processing, and customer service all are part of the process as well. Importantly, it also embodies the information systems so necessary to monitor all of these activities. Simply stated, "the supply chain encompasses all of those activities associated with moving goods from the raw-materials stage through to the end user." Advocates for this business process realized that significant productivity increases could only come from managing relationships, information, and material flow across enterprise borders. One of the best definitions of supply-chain management offered to date comes from Bernard J. (Bud) LaLonde, professor emeritus of Supply Chain Management at Ohio State University. LaLonde defines supply-chain management as follows: "The delivery of enhanced customer and economic value through synchronized management of the flow of physical goods and associated information from sourcing to consumption. "As the "from sourcing to consumption" part of our last definition suggests, though, achieving the real potential of supply-chain management requires integration--not only of these entities within the organization, but also of the external partners. The latter include the suppliers, distributors, carriers, customers, and even the ultimate consumers. All are central players in what James E. Morehouse of A.T. Kearney calls the extended supply chain. "The goal of the extended enterprise is to do a better job of serving the ultimate consumer,". Superior service, he continues, leads to increased market share. Increased share, in turn, brings with it competitive advantages such as lower warehousing and transportation costs, reduced inventory levels, less waste, and lower transaction costs. The customer is the key to both quantifying and communicating the supply chain's value, confirms Shrawan Singh, vice president of integrated supply-chain management at Xerox. "If you can start measuring customer satisfaction associated with what a supply chain can do for a customer and also link customer satisfaction in terms of profit or revenue growth," Singh explains, "then you can attach customer values to profit & loss and to the balance sheet."

What is the importance of Supply Chain Management In the ancient Greek fable about the tortoise and the hare, the speedy and overconfident rabbit fell asleep on the job, while the "slow and steady" turtle won the race. That may have been true in Aesop's time, but in today's demanding business environment, "slow and steady" won't get you out of the starting gate, let alone win any races. Managers these days recognize that getting products to customers faster than the competition will improve a company's competitive position. To remain competitive, companies must seek new solutions to important Supply Chain Management issues such as modal analysis, supply chain management, load planning, route planning and distribution network design. Companies must face corporate challenges that impact Supply Chain Management such as reengineering globalization and outsourcing. Why is it so important for companies to get products to their customers quickly? Faster product availability is key to increasing sales, says R. Michael Donovan of Natick, Mass., a management consultant specializing in manufacturing and information systems. "There's a substantial profit advantage for the extra time that you are in the market and your competitor is not," he says. "If you can be there first, you are likely to get more orders and more market share." The ability to deliver a product faster also can make or break a sale. "If two alternative [products] appear to be equal and one is immediately available and the other will be available in a week, which would you choose? Clearly, "Supply Chain Management has an important role to play in moving goods more quickly to their destination. "

If we take the view that Supply Chain Management is what Supply Chain Management people do, then in 1997 Supply Chain Management has a firm hand on all aspects of physical distribution and materials management. Seventy-five percent or more of respondents included the following activities as part of their company's Supply Chain Management department functions: • Inventory management • Transportation service procurement • Materials handling • Inbound transportation • Transportation operations management • Warehousing management Moreover, the Supply Chain Management department is expected to increase its range of responsibilities, most often in line with the thinking that sees the order fulfillment process as one co-ordinate set of activities. Thus the functions most often cited as planning to formally include in the Supply Chain Management department are: • Customer service performance monitoring • Order processing/customer service • Supply Chain Management budget forecasting On the other hand, there are certain functions which some of us might feel logically belong to Supply Chain Management which companies feel are the proper domain of other departments. Most difficult to bring under the umbrella of Supply Chain Management are: • Third party invoice payment/audit • Sales forecasting • Master production planning