The designing, planning and operating of three key drivers - inventory management, transportation management, and information systems determine the supply chain structure. Together, these drivers will help the whole supply chain and its trade-offs to ach
... level of quality and service anywhere in the world. In an effort to provide end-to-end operational services, it is important to continue to invest in creating tools to manage information; understanding that information management will be one of the most important competitive advantages that we will have to offer in the future. Operating system is tightly integrated with manufacturing and supply chain planning. It effectively manages the flow of inbound material directly to the point of consumption on the manufacturing floor. An information system is potentially the biggest driver since it affects all the other drivers. In conclusion, using those inventory management, transportation management, and information systems drivers, I am delighted so that using these drivers efficiently and effectively; I was to achieve my strategic goal at a low-cost. 2. The mutual relationships among the supply chain members bring the term extended enterprise. The extended enterprise requires a new approach to working with suppliers and customers. It represents a major transformation in how businesses conduct themselves and how they cooperate and compete with others. As responsibility shifts between supply chain members, there is often a struggle for back power back power so that one firm can take of the supply chain. For instance, Home Depot, Sysco, Grainger attempted to control over their suppliers through their buying power. During the late 1960’s and early 1970s, the United States was getting close to an era of an era of supreme growth. It has given the focus on meeting consumer needs in which reflected companies to recognize the true impact of the purchasing function. For instance, buyers were trained and warned not to depend on a single source of supply voluntarily. They had to look for a second source to protect against whatever disaster might stop their production. So, they would actively promote a second source that would receive only a small share of the purchasing volume as a check on the primary supplier. Consequently, these games of suppliers created anger against each other and they are the source of much disbelieve that exists nowadays. Suppliers were the opponent and they thought only for themselves. On the other hand, buyers viewed all purchases as commodity like. Consequently, the price became the key determinant to winning a bid among suppliers. Such behavior prevented price from being the only criteria that mattered. Therefore, suppliers attempted to backdoor the buyer and go directly to the engineer who had the authority to specify a particular product, subsystem, or assembly. It was very common among suppliers that the buyers had no choice beyond expending the flow of paperwork and goods and services through the system. In addition, suppliers worked hard to create terror, uncertainty, and disbelief in the minds of the purchasing organization. Nonetheless, traditional companies allowed purchasing to make all strategic decisions regarding suppliers. They made purchasing decisions almost entirely on price even though they did not have any data or systems to quantify the cost of poor quality and reliability. During the mid-1970s, the procurement function slowly began to appear on the corporate radar screen. As a fact, senior management paid more attention to procurement and purchasing managers broadened their limited horizons to play a more energetic role in non-purchasing corporate decisions since companies planned for future supply needs. Material management brought the importance of combining a number of purchasing-related activities in one function with the intention of gaining system-wide proficiency. Furthermore, after hard-working with sellers, good suppliers were suddenly in demand. The materials management and supply chain management (SCM) was strategic source where buyers were able to find world-class suppliers with whom to work. Nonetheless, Sellers were not longer seen as equal and some were recognized to be better than others in terms of quality, delivery, and other key criteria. On the other hand, buyers were encouraged to seek longer term relationships with fewer suppliers from whom real benefits could be achieved. In addition, close ties were not sought with all suppliers. In some instances where a supplier has lost its edge, the buyer had presented a program for improvement that entailed greater commitment. Supply chain management started to progress in the 1990s with firms extending their best practices to include their most trusted and strategic suppliers. Therefore, supplier then included their supplying efficiency through taking over redundant value-chain activities, such as logistics so that goods are received either directly at store locations or through cross-docking without check up. As a result, suppliers were sought to contribute to product development. In other words, suppliers were treated as partners with which we share the goal of maximizing the value delivered to the end consumer. Although the objective of SCM is to maximize value to the customer, it was not always clear as to whose profits and costs were of major consideration. If the supply chain was understandable, then the value of each supply chain component would benefit all. This inequity in benefits and risks has indicated the difference between cooperation and collaboration among supply chain partners. This distinction also highlighted the difference between the supplier compliance and commitment. Even though the benefits of supply chain visibility can be huge, the obstacles remain high. The biggest bottleneck, of course, is a lack of common standards for global retailers. Although the obstacles eases as the Extensible Markup Language (XML) operation grows, supply chain partners will have to be encouraged to access a central site. For firms with thousands or even hundreds of thousands of SKUs, the data-handling and scalability issues can turn into major headaches. Although, accessing supply chain data becomes important day by day, but it is more critical to be able to intelligently manage and coordinate supply chain activities. By looking at the future, improved supply chain visibility will enable much wider deployment of direct-store-delivery and closer partnerships with third party logistics (3PLs) and other outsourcers. 3. Building a comprehensive supply chain strategy is not as easy. With the recent economic downturn, cost reduction has become the new priority in the corporate world. Supply chain management certainly offers the requisite cost savings. Decisions about how to plan a company’s supply chain operations can be operational, tactical, or strategic. Strategic decisions are the most far-reaching and difficult d to make. These decisions are characterized by complexity, interdependence, and uncertainty. In response and for less than the cost of a supply chain consultant, I offer some simple steps that provide the foundation for building an executable supply chain strategy. I will be looking for revolutionary supply chain solutions that will make my firm more profitable and competitive. The key to successful supply chain execution is the development of operational processes that streamline the organization and its supplier and customer relationships. By taking a process perspective, my firm can more easily identify areas for improvement and business units affected by new management processes. The key then becomes the ability to evaluate the supply chain, and to identify cost savings opportunities. The general steps to follow are these: 1. Identify potential areas for process improvement, 2. Prioritize these areas, 3. Brainstorm improved processes, 4. Develop a plan, 5. Execute implementation plan. Identifying potential imp...