Supply Chain Management
- involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.
Basics of Supply Chain
- the average company spends nearly half of every doolar that it earns on production needs-goods and services it needs from external suppliers to keep producing.
- materials flow from suppliers and their upstream suppliers at all levels
- transformation of materials into semi-finished and finished products,or the organization's own production processes.
- distribution of products tp customers and their downstream customers at all levels.
Information Technology;s Role in the Supply Chain
- information technology's primary role in SCM is creating the integration or tight process and information linkages between functions within a firm
- the ability to view all areas up and down the supply chain.
- changing supply chains requires a comprehensive strategy buoyed by information technology.
- the bullwhip effect occurs when distorted production demand information passes from one entity to the next throughout the supply chain.
- demand planing software generates demand forecasts using statistical tools and forecasting techniques.
- companies can respond faster and more effectively to consumer demands through supply chain enhancements
- supply chain planning(SCP) software uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain.
- supply chain execution(SCE) software automates the different steps and stages of the supply chain.
- new forms of servers,telecommunications,wireless applications,and software are enabling companies to perform activities that were once never thought possible.
Supply Chain Management Success Factors
- Make the sale to suppliers
- Wean employees off traditional business practices
- Ensure the SCM system supports the organization goals
- Deeply in incremental phases and measure and communicate success
- Be Future Oriented
SCM Success Stories
- build to order and configure to order manufacturing capabilities
- web enabled configure to order entry and order status for customers buying directly from Apple at Apple.com
- Real-time credit card authorization
- Available to promise and rules based allocations
- Integration to advanced planning systems