Supply chain management fundamentals and applications

Supply Chain Management

Using the analogy, "a chain is no stronger than its weakest link," draw a comparison between that concept and the principles of Supply Chain Management.

The concept of a supply chain having a high degree of process, system and communication systems integration to ensure accuracy and reliability all aimed at a shared delivery schedule is critical to its success. Studies of supply chains indicate that when one can move beyond competing between suppliers and collaborating, knowledge, not price, becomes the differentiating factor (Dyer, Nobeoka, 2000). In the near-term the strength of a supply chain being no stronger than its weakest link is tactically seen in the extent to which the "bullwhip effect" of customer demand impacts the supply chains' performance (Ouyang, Li, 2010). Over the long-term, the strength of a supply chain being defined by its weakest link is dictated by the extent of logistics coordination at the most basic level, and optimization at the highest (Leung, 2010). The "bull whip" and "backlash" aspects of supply chains then indicative of weaker links in the broader network (Shukla, Naim, Yaseen, 2009) and will slow the entire supply chain down over the long-term if not resolved. Ultimately supply chains can overcome these limitations by concentrating on creating a highly collaborative network of suppliers who share information quickly, making knowledge the primary differentiator (Dyer, Nobeoka, 2000). In this way the weakest link in a supply chain is strengthen through collaboration and knowledge sharing.

The concept and use of standardization in manufacturing has benefits and challenges. Provide supporting information that defines how and where you would apply the use of standardization within the automobile industry?

Standardization has been seen as a production strategy for alleviating any variation in production processes thereby driving up quality levels (Kondo, 1987) (Miller, 1987). Contrasting this has been the move towards mass customization as a manufacturing strategy, specifically focusing on giving customers automobiles that more precisely align with their preferences. The decision to use standardization in manufacturing needs to be defined between the production efficiencies possible with make-to-stock products on the one hand, and the ability o respond to unique customer requirements with standardized configurations on the other. Standardization of the longest lead-time parts and those with the highest variable costs are essential for manufacturers to stay profitable. Standardization also needs to be dictated by the implications for suppliers of key parts and subassemblies. Standardizing on long lead-time items that also have little demand variability would be the best decision.

Based on your knowledge and/or experience of Total Cost of Ownership (TOC), discuss what you think are the two most critical components of TOC.