Supply Chain relationships and Supply Chain dynamics are topics that are closely related to each other. A discussed in Russell and Taylor (pgs. 426-427), the bullwhip effect is a prevalent dynamic in supply chain management. Methods to decrease the bullwhip effect include: increased information sharing and coordinated forecasting. As has been noted before, the clothing company Zara is a good example of a well-designed supply chain system. Zara has been able to successfully keep information flow open, keep a production rhythm and maintain high leverage of corporate assets. This success has enabled to Zara to reduce the bullwhip effect (Ferdows, 2004). By maintaining much of its own production in-house, Zara maintains a tight supply chain relationship with increased information sharing and high levels of trust. This high level of vertical integration also provides increased control over production schedules that may well not be available when using outsourced suppliers. Supply Chain Integration includes coordinating “various supply chain members to collaborate and work together, that is, to get “in-sync” ” (Russell 437). Using Zara as an example of effective supply chain integration, we can see how a vertically integrated company must maintain tight relationships with their supply chain both upstream and downstream. Remaining “in-sync” over the spectrum of the supply chain results in a smoother supply chain dynamic including, reduced bullwhip effect, lower costs, production efficiencies, improved efficiencies and service (Russell 438).
Ferdows, K. et al. (2004), “Rapid Fire Fulfilment”, Harvard Business Review, November, pp. 104-110 Russell. Operations Management, Seventh Edition ISV. John Wiley & Sons, 2015-01-29. VitalBook file.
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