Supply Chain Management the Concept Essay
- Length: 10 pages
- Subject: Business
- Type: Essay
- Paper: #44490722
Excerpt from Essay :
This lack of trust within the supply chain has a rippling effect across the flow of goods and services, and should therefore be addressed with a high degree of priority. Trust must be built through a process of regular communication across the supply chain, which includes all parties involved in the flow of goods.
Communication can be established by a variety of means. In addition to electronic communication, face-to-face communication via meetings is also a good idea. Trust is easier to establish by means of personal meetings, where ideas and information can be shared among the various stakeholders. Trust can also be established and maintained by means of a contract stipulating that information is not to be shared with parties outside the supply chain or those who do not have a direct interest in the supply chain itself.
A long-standing relationship with suppliers will also create a basis of trust if goods and services supplied are of a consistently high quality. In order to ensure this, each company within the supply chain should share its specific requirements for the goods, services, and delivery times that they require. These requirements should also be consistent with the demands of customers at the end of the supply chain. APS and EPK systems are a useful way to organize and disseminate such information with efficient speed across the supply chain.
Through meetings, the needs of each company in terms of information technology should be established. A regular schedule for communication should be established in order to promote trust and information sharing among companies.
The purpose of communication and trust among supply chain companies is to match the demand for bedroom furniture products with the supply in order to establish a lean manufacturing paradigm. This can be done by means of a Materials Requirements Planning system, which allows suppliers to plan for future materials supply. Known future orders are recorded with forecasted orders to ensure the on-time delivery of sufficient materials. The amount and delivery requirements of these materials are determined by the system and communicated across the supply chain to ensure the smooth flow of products. The quality of these products is also determined by means of communication and regular inspection. While communication eliminates the need for daily inspection, it is suggested that a fairly regular inspection system be in place in order to ensure continuous quality.
In the past, business systems tended to function on the basis of competition, mistrust, and careful guarding of information. In the current business paradigm, the value of collaboration is increasingly recognized, particularly among the various parts of the supply chain. Through communication, all elements that constrain collaboration within the supply chain should be identified and managed in order to create a more open relationship of trust. Across the bedroom furniture supply chain, then, companies should understand that they collaborate in order to reach the common objectives: providing customers who require bedroom furniture with optimal quality within a reasonable time frame.
Each "link" in the supply chain then benefit from this collaboration and from sharing information in terms of design, engineering, problem-solving, and reaction to the marketplace and its demands (Pye Tait, 2003). The supply chain therefore needs to be mapped in order to understand the network of companies that collaborate to add value to the product on its way to the end customer.
Trust is established on the basis of both experience and confidence. A long-standing relationship more readily involves trust than one that has been established recently. Experience-based trust can therefore only be established in the long-term. Shorter-term trust is however possible via communication that promotes mutual confidence.
Confidence is promoted by means of regular communication on both the electronic and other platforms. Companies need to regularly meet and share their ways of adding value to the supply stream. Making this information visible established confidence in each company's ability to add such value. Consistently adding value further promotes trust. Another excellent way of promoting both confidence and excellence is by means of personnel training. Training needs should be established before a mutual agreement is reached among all parties in terms of the training required for personnel across the supply chain. Regular training also ensures that personnel can maintain the determined standard of value, as related to customer demands at the end of the supply chain.
Furthermore, personnel training is also a valuable way to establish lean manufacturing paradigms across each company. Personnel members need to be made aware of lean thinking principles, and how this is an advantage from a supply chain and business perspective.
Collaboration across companies involve more than technology and adequate management systems. It involves working with people. Personnel need to be aware of their role in making the supply chain a success. They also need to be aware of their integrated function within each company, and also within the supply chain; this will give them both meaning and satisfaction in the work that they do. This will inherently improve the quality and value of services and products delivered by the suppliers.
In terms of business relationships across the supply chain, these occur on both the personal and global level. Personally, a relationship of trust among personnel and management within each organization should be established. Each personnel member should be aware of the integrated and dependent nature of their work in terms of the rest of the supply chain as well as the individual company for which he or she works.
Trust can be established via regular communication, training, and ensuring the consistent delivery of high-quality products, services, and delivery time.
Business Relationships with Customers
Current business paradigms are generally customer driven. The customer is the most important element in the supply chain. Customer requirements and demand determine the elements in the rest of the supply chain, as well as the profit margin for each company within the chain. While customer service is naturally improved by paying attention to elements within the supply chain, the relationship of the end vendor to the customer should not be overlooked. It should also be kept in mind that each company within the supply chain is also a customer, requiring supplies from other companies in the chain. This means that customer service should be the priority of all companies involved, until the final product reaches the final customer.
Because the requirements of the final customer determines the elements of the supply chain, it is important to collect information regarding the nature of these requirements. Generally, companies collect demographic, preference and satisfaction information from customers in order to determine input date for their APS and ERP systems. It is also however important to determine possible future trends and preferences from the existing and the potential customer base.
In addition to in-store forms and questionnaires as well as telephone interviews with customers, the online environment lends itself well to determining customer preferences. With an online presence, a company has a platform from which to reach a much larger customer base, especially with expansion in mind. Potential customers can then complete forms with demographic and preference information to help companies determine their specific supply chain logistics.
The company's direct relationships with customers are also important in terms of customer satisfaction and service. Customers should for example have several avenues of communication should they wish to contact the company. Both complaints and compliments should be allowed either in the online or offline environment. Electronic communication can also be used for advertising new products, or soliciting information regarding suggestions for desired future products. By soliciting more opinions in this way, customer satisfaction could be more accurately ensured in terms of product quality, delivery time, and the type of products required.
The furniture industry is a challenging one in the current economic climate. However, with lean manufacturing principles across the supply chain, a competitive edge can be gained in terms of customer satisfaction and delivery times.
The bedroom furniture company should ensure that optimal technological tools be implemented in order to maintain the ability to ensure quality at optimal delivery speeds and acceptable costs. APS and EPK technology can then be implemented to establish a pull strategy in terms of the supply chain, where the customer determines the lean strategy. Optimal communication technology will ensure an integrated approach to the supply chain and build trust among the companies involved. This is vital to ensure consistent quality and optimal customer service to the end customer.
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Pye Tait. (2003, Feb). Case Study: Exemplar Co Ltd. FFINTO. http://www.ffinto.org/furniture_supply_chain/docs/Case-Study-Best-Practice.doc
Pye Tait. (2003). Supply Chain Management -- a Literature Review. FFINTO. http://www.ffinto.org/furniture_supply_chain/docs/Final_SCM_Literature_Review.pdf