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Business Reasons for Supply Chain
Business Reasons for the Supply Chain Management
There are many factors or reasons why companies choose to invest in and grow their supply chains over time. The intent of this paper will be to analyze the most common reasons why supply chain management is such a critical part of any business strategy today. Managing supply chains effectively can mean the difference between launching a new product on time and at a high quality level
(Amini, Li, 2010), in addition to managing high variability in demand for a given product or service as well (Georgiadis, Tsiakis, Longinidis, Sofioglou, 2010). Supply chains are indispensible for managing any business effectively, across all manufacturing and service sectors.
Better Demand Management
Supply chains are a critical part of the complete value chains of a business and often the make...
For supply chains to deliver the maximum value possible, they need to be structured in such a way as to be demand-driven, where customer demand dictates build rates, order rates, forecasts and supplier coordination. A Demand Driven Supply Network (DDSN) is essential in industries that have very high inventory turns including high tech electronics and consumer packaged goods. For any manufacturer or service provider in these industries, having a DDSN-based supply chain is essential if they are going to succeed over time.
Another aspect of managing demand within supply chains is the need to take into account high levels of fluctuations in orders and customer requirements on a seasonal and per customer segment basis (Georgiadis, Tsiakis, Longinidis, Sofioglou, 2010). The DDSN framework provides supply chain managers with…
References
Amini, M., & Li, H.. (2010). Supply chain configuration for diffusion of new products: An integrated optimization approach. Omega, 39(3), 313.
Barrett, J.. (2007, November). Demand-Driven is an Operational Strategy. Industrial Management, 49(6), 14-19,5.
Georgiadis, M., Tsiakis, P., Longinidis, P., & Sofioglou, M.. (2010). Optimal design of supply chain networks under uncertain transient demand variations. Omega, 39(3), 254.
Sawik, T.. (2010). Selection of supply portfolio under disruption risks. Omega, 39(2), 194.
(Reza, 2009) This information is building off of the findings from Uthayakumar. This is illustrating how the two tier system can help to streamline operations. However, as time goes by these ideas will become obsolete. The reason why is because they are focusing on particular aspect of supply chain management (i.e. during emergencies and backlogs). Where is it is failing, is through understanding how this strategy could be used when
Second, greater education about the values and benefit of this approach to managing projects needs to be completed (Brady, Maylor, 2010). Third, the inertia and lack of motivation to change needs to be quantified and shown to managers to see how their lack of commitment and urgency are hurting their businesses. All of these factors center on the value of time and its precious nature as a resource (Brady,
In addition to this, the company is pressured into reducing the time in which the product will be recalled, the situation will be analyzed, and the items in case will be replaced with proper ones. The pressure exerted by the public is also very important for the company in handling the product recall. The company must ensure that the public does not turn against the company. In order to achieve this,
Communication was kept constant, so any problems were dealt with before they resulted in delays. Demand forecasting Demand forecasting is a critical aspect of World Co's success. It is essential that new product lines are responsive to the consumer's needs and desires. Both aggregate demand for the products sold by the company, as well as category-specific demand for specific types of clothing was closely monitored (Raman & Fisher, 2001, pp.6-7). Responsiveness
" (Mathes, cited in Reese, 2007) In its supply chain risk management efforts, Dow Chemical has found opportunities to cut inventory by $160,000 reduce the cost of transporting a particular material by millions a year, improve response time to identify and resolve in-transit problems by 50%, decrease safety stock inventory by 20%, reduce the company container fleet by 20% and improve delivery time windows by 90% (Reese, 2007). Dow has also responded
Recommendations at the Divisional Level Divisional warehouses, or as they are sometimes called, Distribution Centers (DC) act as the fulfillment centers for stores in their region and also receive and inspect products from suppliers. DCs also manage the critical tasks of breaking down large shipments and allocating specific levels of inventory to each store. From a supply chain integration perspective, this is the most critical link in the entire chain between