Unit-12, Supply Chain Management

Md Abdur Rouf, St. Id.-OCL1052

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Table of contents:
Task Contents
1 Explain the importance of effective supply chain management in
achieving organisational objectives
Explain the link between supply chain management and business
functions in an organisation
Discuss the key drivers for achieving an integrated supply chain
strategy in an organisation
2 Evaluate the effectiveness of strategies used by an organisation
to maintain supplier relationships
Use information technology to create strategies to develop an
organisations relationship with its suppliers
Develop systems to maintain an organisations relationship with
its suppliers
3 Assess how information technology could assist integration of
different parts of the supply chain of an organisation
Evaluate how information technology has contributed to the
management of the supply chain of an organisation
Assess the effectiveness of information technology in managing
the supply chain of an organisation
4 Explain the role of logistics in supply chain management in an
organisation
Evaluate procurement practices in an organisation
Discuss the factors that must be considered when improving
logistics and procurement practices in an organisation
5 Plan a strategy to improve an organisations supply chain
Assess how a supply chain improvement strategy will benefit
overall business performance in an organisation
Explain how barriers will be overcome in an organisation when
implementing a supply chain improvement strategy



Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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Introduction
Management of the supply chain operates at three levels; strategic, tactical and operational.
At the strategic level, the company management makes decisions of strategic supply chain of
high standards that are relevant to the whole organization. Decisions regarding the supply
chain are taken should reflect the overall corporate strategy that the organization is following.
The strategic supply chain management has to decide upon will of the cover the breadth
supply chain. These include the development of products, customers, manufacturing, vendors
and logistics.
Any effort to build a supply chain, to improve a supply chain, or to organise around a supply
chain or or chains would seem to require a common understanding of just what a supply
chain is. The definitions vary from organization to organization and, within organization,
from person to person.
APICS, The association for Operation Management, defines supply chain in the following
way:
The global network used to deliver products and service from raw materials to end customer
through an engineered flow of information, physical distribution, and cash.(APICS
Dictionary, 10
th
edition, p.115)
Product Development: Senior management must set a strategic direction to consider products
that the company must manufacture and offer to clients. As product cycles mature or
declining product sales, management has to make strategy to develop and introduce new
versions of existing products on the market making, streamline current product or develop a
new range of products and services . These strategic decisions can include the need to acquire
another company or sell existing businesses. However, in making these strategic decisions for
product development, the overall goals of the company should be the determining factor.
Customers: At the strategic level, a company needs to identify customers for its products and
services. When management of the company makes strategic decisions about products for
manufacturing, then they need to identify key customer segments in which the company's
marketing and advertising target.

Manufacturing: A strategic level manufacturing decisions define the manufacturing
infrastructure and technology required. Based on the sales forecast and high-level estimates,
the corporation must make strategic decisions about how products are manufactured. The
decisions may require new manufacturing facilities to build or increase production at existing
facilities. However, if the overall objectives of the company include manufacturing moving
overseas, then decisions can lean towards the use of outsourcing and third party logistics. As
environmental issues influence corporate policy to a greater extent, this may influence the
strategic decisions of the supply chain with respect to manufacturing.
Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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Suppliers: The management of the company has to decide on the strategic policies of the
supply chain compared to suppliers. Reduce the cost of buying in a business can be directly
related to an increase in profit and a number of strategic decisions that can be made to get that
result. Leveraging the company's total purchases on many companies can allow company
management to select strategic suppliers that offer the biggest discounts. But these decisions
have to correspond with the general objectives of the company. If a company has adopted
quality policies, strategic decisions then providers will have to be within the overall objective
of the company.
1.1
In ancient Greek fable about the tortoise and the hare, fast and overconfident rabbit fell asleep
on the job, while the "slow and steady" tortoise won the race. That may be true in the time of
Aesop, but by requiring the business environment today, "slow and steady", no one(anyone)
will not get on the grid, let alone win the race. The managers of these days recognize that
getting products to customers faster than the competition will improve the competitive
position of the company. To remain competitive, companies must look for new solutions to
the problems of managing large supply chain, such as modal analysis, management of the
supply chain, route planning, distribution networks.
Companies have to deal with the challenges of managing that affect a supply chain such as
reengineering, globalization and outsourcing. Why is it so important for companies to get
their products to their customers quickly? Faster product availability is key to increase sales,
says R. Michael Donovan of Natick, Mass., a management consultant specializing in
manufacturing and information systems. "There is a substantial profit advantage for the extra
time you are in the market and your competitor is not," he says. "If you can be there first, you
will get more orders and more market share." Ability to provide faster product also can make
or break the sale. If you see two products seem to be equal and the alternative one is available
immediately and the other will be available in a week, which one would you choose? ,"
Supply chain management has an important role to play in moving goods more quickly to
their destination. "
1.2
Williams et al. (2002) stated that organizational innovation would force or drive the
modifications of the entire organization structure and that of all workers, which further
have an effect on the operation of the total supply chain. Terms of increased collaboration
and communication between buyers and bring a strong impact on organization innovation.
Atuahene-Gime et al. (1996) said that the supply chain management often focuses on the
benefits and quality of product innovation. As for the service industry, the benefits of
innovation in both quality and service depends on the positive supply chain management.
Athaide (1996) also reported the case of innovation in both production and technique
innovation, the supply.
Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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The type of corporate culture affects the ability of the individual innovation and
organizational innovation. The bureaucratic culture restrains individual innovation and the
corporations' ability to make against the competition. Each change the supportive culture is
easiest to encourage individual innovation, and companies can also happy to change to
improve their academic skills. The culture can be effective to encourage. Individual
innovation however, overemphasis on the contrary, will bring conflicts between employees
on results and is a major obstacle to the organizational transformation. It his well established
that an organization could provide to encourage more innovation and develop competencies
as its culture emphasizes innovation more resources.
1.3
As companies increasingly use their supply chain to compete and gain market share,
expenditure and activities in this area are particularly on the rise. Technology and process
updates the progressive society clearly show that supply chain excellence is more widely
accepted as part of the overall business strategy and increasing value for customers is not just
leadership, but all matters.
The shift in how companies view their supply chain is fixed. Examine how the company
views its supply chain and consider answers to these basic questions. Do manager see the
leadership of its supply chain as a strategic competitive advantage? If not, manager/leader are
thinking of outsourcing supply chain? Are the capacity benefits organizations supply chain
better known and understood leadership of the company? If so, how do they affect the
growth, profitability and customer service?
2.1
Effective management of suppliers is one of the ways manufacturing companies can improve
their performance. There are several important aspects of supplier management, they include
sourcing strategies, how relationships are consistent and exchanges policies adopted by the
manufacturers. Typically, it has been argued in the literature that the close relationship
between the suppliers should be developed, unlike traditional price-driven commercial
relationship. Along with this approach, manufacturers should use a single vendor strategy
instead of multiple sources of supply. The study presents the results of a study (using
Research) supplier management practices, as well as the German manufacturing companies.
The research revealed that a significant proportion of the companies surveyed had
experienced a change in their relationship with suppliers in recent years. Mainly relationship
had become closer to and use of partnerships was evident. Although the companies had
developed partnerships with some of the suppliers of the companies continued to prefer
multi-sourcing. The paper demonstrates results of the German industrial companies because
they shows the potential for improvement through more of best practices in the field of
supplier management.


Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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2.2
As costs search and coordination costs decrease other, theory predicts that companies should
increase the optimal number of suppliers with which they operate. Despite recent declines in
these costs due to information technology, and there is little evidence of an increase in the
number of suppliers used. On the contrary, in many industries, and companies are working
with a smaller number of suppliers. This suggests that other forces must be represented in a
more complete model of supplier relations buyer.

As companies try to increase their performance, become the interface with suppliers, the
main focus in the search for additional efficiencies. This topic has become increasingly
popular, especially in light of the differences in customer relationship between supplier
companies and Japanese-American. For example, the estimated relationships with suppliers
to provide superior per car cost $300-600 advantage to manufacturers in Japan. These trends
are reflected in the information technology (IT) literature also, which identified the impact on
supplier relations as an area important for research, and these relations were discussed in the
framework of institutional economics to address the implications of the size of the company
and management structure of the relationship.
2.3
The number of natural methods used to determine the optimal supplier to start from the
assumption that the company would benefit from the increase in the number of suppliers,
thereby broadening the choice to technical considerations limit this strategy. From this
perspective, a limited number of suppliers considerations, such as the costs of setting up the
link, and search costs, transaction costs, which is usually summed coordination costs.
For example, try to determine the optimal number of suppliers for a given input, it is assumed
that the service providers' product offerings substitute each other, except that differ in certain
desirable properties, such as price, fit, or product features. Interacting with each supplier
involves coordination costs appearance. Surveys, some suppliers, the customer selects a
product offering that is the best value according to the criteria. Optimal number of suppliers
is determined by trading off the costs against the expected benefits of additional searches to
identify the right supplier. To illustrate these compromise, in this section we model the
optimal number of suppliers in the neoclassical tradition of Stigler (1951).
3.1
Today, companies are often not considered independent entities, but are part of many
scompanies, multi-stage network, the supply chain, providing products and services to the
final customer (Lambert and Cooper, 2000). Supply Chain Management (SCM) literature, as
well as the multi-company networks offers significant benefits(Burgess, 1998). The
utilization of Information Technology (IT) , in turn, need to be considered for the
management of the network, and improve the efficiency of the supply chain is important (
Lee and Billington, 1992).
Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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3.2
Supply Chain Management (SCM), is concerned with products flow and information between
members of the organizations. Recent developments in technology enables organizations to
easily in their territory. This technology is helpful to adjust the supply chain management
activities. The cost of information decreases because of increasing rate of technology.
Managers need to realize that information technology is more than just computers. Computer
data recognition equipment, communications technology, factory automation, and other
hardware and services are included.
Director of Information Technology also need to know technology more than just computers.


3.3
Information within the organization and the supply chain of companies in the functional area
of the flow in 1980s was based on the earlier paper. Paper-based transactions and
communications are slow. Supply chain members can not be clearly understood that the value
of this period, the data was often looked upon as a serious contender resources.
Implementation of cross-functional process re-design of IT infrastructure capacity, reduce
cycle time, implement a competitive position for the business enterprises. Several of the best
firms involved in the supply chain throughout information technology. There are three factors
strongly influence this change of information. First, the lovely customer satisfaction has
become a corporate obsession for some. Providing best, most efficient and effective service
to the customer has become critical. Second, The information needs of a competitive level to
reduce inventory and human resource managers' abilities, a very important factor. Third,
Flow of information plays a crucial role in the strategic plan.

4.1
Logistics and supply chain management both are important and exciting areas that touch our
lives. We can imagine different products that are bought and consumed in our day to life.
How do they reach the customer, and at what cost? In ancient times, the international trade
was dominated by heavy raw materials. Today, the process and the finished product (not raw)
take part in a larger role in global trade. Piling up of inventory and costs, hospitals have to
carry and keep the factory grounds to capture unnecessary purchases.
Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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Logistics management is the part of SCM does effective planning to meet the need of
customers for products, services and related information between the point of the original
point-and cost-efficient, effective, forward, and reverse flow and storage of control. Logistics
entails having the right price to the right customer, in the right place at the right time, in the
right quantity and the right quality, the right way, the right product.
All right on this 'money' could be the right way to do something much simpler, but it can be
quite a challenge to get. For example, both retail distribution and manufacturing of high
quality, it is quite certain in which suppliers deliver freight offer and is very common in
narrow time windows.

4.2
Today, the most progressive groups in the company is purchasing. Organizations system,
strategy, and operational theory has to be flexible and dynamic. We must be good, as we
have done that way for 20 years. "We are not our own, despite the money!" The latter apply
in current procurement practices.

Global competitive pressures necessitates the improved purchasing and supply management
functions, procurement practices and suppliers to develop the organizations relative situation
on quality, price, technology, and responsiveness- that does not mean sitting around and
waiting for it to be happened.

4.3
In supply chain procurement is a key activity to success. It significantly depends on the
overall success of an emergency response that can affect. In humanitarian supply chain,
procurement correspond to a very large proportion of the total cost and must be managed
effectively to achieve best value. In internal supply chain processes procurement works as
pivotal to fulfil the needs / requests into product or service. It has three levels of users to;
(i) internal customer.
(ii) programs in response to the emergency and ongoing programs.
(iii) Prepositioning of supply for both internal customers and program needs.



Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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5.1
This strategy (image is shown) was developed using a multi-tiered approach. Strategy
Department component agencies and departments together to create a first draft of a USCG,
CBP, TSA, DHS policy, science and technology, domestic Nuclear Detection Office,
including grants and training, and preparing to bring the subject matter experts.

The private sector, including the Advisory Committee on the draft with the staff throughout
the Department of the Interior, with non-DHS agencies, interagency reviews, suggestions
were involved in the process of a comprehensive review of the National Maritime Security
Advisory Committee and the Commercial Operations Advisory Committee, and mainly with
USA(eg, APEC).




Picture shows strategy to improve an organisations supply chain


Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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5.2
Improvement strategy will help overall business performance in an organisation in the
following ways:
1. Improved supply(Chain network): Supply chain management software across the entire
supply chain network provides a full 360-degree visibility. This permits user to supervise the
status of all activities across all suppliers, production plants, storage facilities, and
distribution centres.
2. Minimum delays: Many supply chains particularly a supply chain that has not been
enhanced with the supply chain application- particularly those are plagued by delays can
result in poor relationships and can lead to lost business. Many levels to ensure delivery on
time across the board, with the SCM software, all activities can be integrated seamlessly
executed from start to finish.

3. Improved Collaboration: The supply chain process can run as smoothly as possible, so
instantaneous, unhindered communication and information sharing with all key stakeholders
will help keep track of this kind.
4. Reduced Costs: Supply chain management software can help in a variety of ways to reduce
overhead costs.
5.3
Effective tools are required for supply chain management for every business. Supply chain is
inherently often unpredictable and always dynamic and ineffective supply chain management
means the poor business performance and a lower bottom line. Supply chain management
software solutions to common problems have been proved to be moderately effective, but
they were unable to render complete profile manageable and accessible information. IBM
Cognos SCPM solution and to organize data, perform effectively and efficiently identify and
resolve issues in an integrated software application that enables supply chain managers are
available.
Busnesses may utilize the IBM Cognos SCPM solution to fix supply chain data to other
enterprise applications, including finance, HR, CRM, and external data. In this way, the
supply chain performance of IBM Cognos SCPM not only effectively improves the
performance, it combines an whole company into a single source of mission-critical
information, as well as value of assets. Employees throughout the organization acn make
business decisions about the need to better collaborate and IBM Cognos SCPM may access
accurate and current information which would facilitate entire organization.


Unit-12, Supply Chain Management
Md Abdur Rouf, St. Id.-OCL1052
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Conclusion:
Supply chain management plays key role in developing business growth. The importance of
effective supply chain management in achieving organisational objectives is endemic. The
relations between supply chain management and business functions in an organisation part
and parcel.
The key drivers such as product development, suppliers, customers, manufacturing for
achieving an integrated supply chain strategy in an organisation is always the top most
priority that is discussed above.
Furthermore, It is been well recognised that the effectiveness of strategies used by an
organisation to maintain supplier relationships is paramount. In the same point the utilization
of information technology is explained as vital.
Then the role of logistics in supply chain management is discussed in detail with
procurement practices for any organisations which shown to be really significant for success
of any organization.
Finally it may be said the supply chain management is the key to any successful organization.











References and Bibliography
1. Hopp, W.J. and Spearman, M.L., Factory Physics: Foundations of Manufacturing
Management, Irwin, McGraw-Hill, 1996.

2. Viswanadham, N., Analysis of Manufacturing Enterprises, Kluwer Academic
Publishers, 2000.

Unit-12, Supply Chain Management
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3. Handfield, R.B. and E.L. Nochols, Jr., Introduction to Supply Chain Management,
Prentice Hall, 1999.

4. Viswanadham, N. and Narahari, Y., Performance Modeling of Automated
manufacturing Systems, Prentice Hall of India, 1998.

5. Chopra, S. and Meindel, P., Supply Chain Management: Strategy, Planning, and
Operation, Prentice Hall of India, 2002.

6. Williams, D.A.,Berger, J.B., and McClendon, S.A., Towards a Model Inclusive
Excellence and change in postsecondary Institutions, Association of American
Colleges and Universities, 2002

7. Atuahene-Gime, K., Market orientatin and innovation; Journal of business research
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8. Stingler, G.J, The Division of Labour is limited by the extend of market, The Journal
of Political Economy, The University of Chicago Press Vol.59, No. 3, Jun.,1951
pp.185-193


9. Lambert D.M. and Cooper M.C, Issues in supply management; industrial marketing
management, Vol. 29, pp. 65-83, 2000

10. Burgess, R., Avoiding supply chain management failure: lessons from business process
re-engineering, International Journal of Logistics Management, Vol.9, No.1, pp.15-23


11. Lee, H.L., and Billingham, C., Managing suppy chain inventory: Pitfalls and
opportunities, MITSlogan Management Review, 1992