Supply chain management

Supply chain management

1. total systems approach to managing the entire flow of information, materials, and services from raw material suppliers through factories and warehouses to the end customer

2. includes

   • customers
     • what they want
   • forecasting
     • quantity/ timing if demand
   • Design
     • customer wants
   • Processing
     • controlling quality
   • inventory
     • meeting demand/managing costs
   • purchasing
     • Evaluating suppliers/supporting operations
   • suppliers
     • monitor supplier quality, delivery, relations
   • location
     • determining the location of facilities
   • logisitics
     • how to best move and store materials

3. as a pipeline

   • reduce process time/storage time
     • product spends less time in system
     • less capital tied up in inventory
     • quicker response to change in demand

4. purchasing

   • sources of supply
     • single sourcing
       • advantages
         • better quality, more supplier quality assurance (SQA)
         • strong relationships
         • greater dependency = more commitment/effort
         • easier to cooperate new product/service
         • more scale economies
         • higher confidentiality
       • disadvantages
         • vulnerable to disruption if failure to supply
         • individual supplier affected by volume fluctuations
         • supplier put prices up if no alternative supplier is available
     • multi sourcing
       • advantages
         • can drive down price, competitive tendering
         • switch sources if supply failure
         • wide source of knowledge/expertise
       • disadvantages
         • difficult to encourage supplier commitment
         • less easy to develop effective SQA
         • more communication
         • more difficult to obtain scales of economy
   • negotiating contracts
   • maintaining a database of suppliers
   • obtaining goods/services
   • managing suppliers

5. types of supply chain

   • business to business
   • business to consumer
   • consumer to business
   • consumer to consumer
   • business to government
   • consumer to government
   • government to government

6. benefits of supply chain management

   • improved inventory management
   • improved operational efficiency
   • improved flexibility
   • improved partner relationships
   • improved customer satisfaction
   • COMPETITIVENESS

7. Issues in supply chain management

   • in-flexible operations
   • Push Vs Pull mechanism
   • Volatility in the chain
   • information management
   • inter-organisational conflicts
   • complexity
   • costs of implementation and maintenance