Competitive Advantage Using Supply Chain Management

2124 Words Mar 18th, 2011 9 Pages
GAINING COMPETITIVE ADVANTAGE USING EFFECTIVE SUPPLY CHAIN MANAGEMENT

1.0 Introduction Christopher (2005, p.5) describes supply chain management as follows: “The management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole” Until recently, supply chain management has been largely viewed as a necessary evil and the focus has been strictly on cost reductions. Today however, many are coming to the realization that supply chain management can be much more strategic, affording a company the opportunity to out-perform competitors. With supply chains becoming more elongated as they become more global, the pace of demand changes increasing and
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Dell’s own forecast is posted to its extranet for easy access by their suppliers and other partners. Suppliers also have access to hub-level inventory holdings and are responsible for restocking the hubs and delivering to the factories on a consignment stock basis. This strategy enables Dell to carry only four days of inventory while its competitors continue to hold 20-30 days worth. 3.0 Zara ZARA is one of the world’s most successful and dynamic apparel businesses. It began operation is La Coruna, Spain in 1975 and has built a reputation of continually seeking process improvement. Zara over the years has developed a strategic and unique supply chain management process that has put it ahead of its competitors. Its emphasis is on ‘permanent innovation and low prices’. Zara stores are digitally linked to headquarters; employees collect and share input from customers daily. The different teams understanding of directional fashion trends is further guided by regular inflows of sales data and other information from all of the company’s stores and sites around the world. This has also enhanced greatly the operating strategy based on the dual objectives of minimizing stock and responding quickly to market needs-even more effectively than its internationally acclaimed rivals. Zara designers come up with new
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