Supply chain management, is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities. Figure 1 shows the main components of Supply Chain Management
Figure 1 Supply Chain Management main components
Supply chain strategy- is not simply a linear derivative of the business strategy. At best, supply chain strategy can be the enabler of the business strategy. If the business strategy is to be the low cost provider, the supply chain strategy should support this. It is just like developing a business strategy, look to includes core competencies, focus, and means of differentiation when developing a supply chain strategy.
Logistic Management - is a supply chain management component that is used to meet customer demands through the planning, control and implementation of the effective movement and storage of related information, goods and services from origin to destination.
Procurement - is the acquisition of goods, services or works from an outside external source. It is favorable that the goods, services or works are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location
Information Management- is competitive advantage, support of business processes, information and control, digital business, integration of business with technology, organizational communication, and data management. Understanding that high-quality information adds value to existing products and services, enhances the creation of new products, changes the efficiency and effectiveness of business processes, and affects relationships with customers, suppliers, and competitors.
Supply Chain Planning -solutions provide global, end-to-end supply chain optimization across procurement, manufacturing and distribution, enabling manufacturers to improve service levels, increase productivity, reduce operational costs and drive profitable growth
Asset management -leads the industry with strong capabilities in materials utility
Fierce competition in today’s global markets, the introduction of products with shorter life cycles, and the heightened expectations of customers have forced business enterprises to invest in, and focus attention on, their supply chains. This, together with continuing advances in communications and transportation technologies .In a typical supply chain, raw materials are procured and items are produced at one or more factories, shipped to warehouses for intermediate storage, and then shipped to retailers or customers. Consequently, to reduce cost and improve service levels, effective supply chain strategies must take into account the interactions at the various levels in the supply chain.
2012 survey commissioned by Greybeard Advisors shows that awareness of the potential of supply chain management to increase business profitability appears to have diminished over the past few years.The survey participants were mostly high-level supply chain executives at top and middle quartile companies.
According to the survey, only 38% of respondents believed that their upper management really understood the potential of supply chain management. This was down from 47% in a similar survey undertaken in 2008.There are some possible reasons given in the survey for the lack of priority for supply chain management issues, including:
Budgetary issues, with less than 30% of respondents feeling strongly supported by management on the financial front.Lack of proactivity from supply chain staff members when it comes to presenting...
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