CHAPTER 10 EXTENDING THE ORGANIZATION- SUPPLY CHAIN MANAGEMENT

BASICS OF SUPPLY CHAIN 

• Supply chain consists of all parties involved, directly or indirectly, in the procurement of a product or raw material.
• Supply chain management(SCM) involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. 
• the supply chain has three main links:

1. materials flow from suppliers and their upstream suppliers at all levels.
2. transformation of materials into semi-finished and finished products, or the organization's own production processes. 
3. distribution of products to customers and their downstream customers at all levels.

                        

A TYPICAL SUPPLY CHAIN

 

FIVE BASIC SUPPLY CHAIN MANAGEMENT

INFORMATION TECHNOLOGY'S ROLE IN THE SUPPLY CHAIN

Factor driving supply chain management

1. VISIBILITY

 -supply chain visibility-is the ability to view all areas up and down the supply chain.

 -bullwhip effect-  occurs when distorted product demand information passes from one entity to the next throughout the supply chain.
   

  2.  CONSUMER BEHAVIOUR 

- demand planning software-  generates demand forecasts using statistical tools and forecasting techniques.

3.  COMPETITION

- supply chain planning(SCP) software-  uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory.

-supply chain execution (SCE) software automates the different stages and steps of the supply chain.

 

 

4. SPEED

-these systems raise the accuracy, frequency, and speed of communication between suppliers and customers.

SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS.

Seven principles of supply chain management.

 

 

Keys to SCM success.

• make the sale to suppliers
• wean employes off traditional business practices
• ensure the SCM systems support the organizational goals
• deploy in incremental phass and measure and communicate success
• be future oriented.