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Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.

The profit margins in the grocery business are extremely thin, so the Kroger Company’s supply change management continually works on improving its supply chain to increase efficiency and reduce costs. Kroger utilizes a program of lean process engineering to constantly improve its supply chain. This process involves examining each individual step of the supply chain from its suppliers to product delivery at its stores and furthermore, this process has been proven to drive down waste and reduce cost (Kroger, 2008). Kroger’s supply chain management is located near the top of the organization structure since the company as a whole has a strong emphasis on improving the supply chain to reduce cost and increase profit margins. Therefore the further up the organizational structure the supply chain management team is located the more optimally it will function and the greater the influence it will have on the decision making process (Burt, Petcavage, and Pinkerton, 2010).

Organizations can significantly reduce their supply costs via cost reduction. Raw materials and supplies are business expenses that can - and should - be minimized to increase revenue. Engage with the suppliers or vendors to create a cost effective strategy for your organization by using managed inventory programs, reducing shipping and transactional costs, decreasing lead times, and reducing the amount of inventory you carry at any given time.

Russell, R. S., & Taylor III, B. W. (2014). Operations and Supply Chain Management, 8th edition. Hoboken, New Jersey: John Wiley & Sons, Inc.

Effective supply chain management can provide an important competitive advantage for a business marketer, resulting in improved communication and involvement among members of the chain, increased motivation, and decreased costs. Tracking the movement of and demand for components used to manufacture a product across a variety of potential and actual suppliers, provides insight and the ability to respond instantly to shortages, surpluses, and changes in market conditions. It seeks to optimize production, decrease manufacturing time, minimize inventory, streamline order fulfillment, and reduce cost.

“Lean Thinking” can help reduce total cost of ownership (TCO), this means the supply team in the entire “chain” must work to:

The cost of management, training and supervision will be greater than the cost of supply chain( wholeseller and distributors)

What is Supply Chain Management (SCM)? Supply Chain Management is the synchronization of a firm’s processes with those of its suppliers and customers to match the flow of materials, services, and information with customer demand. To provide the highest degree of customer satisfaction at the lowest possible cost is the flow in supply chain in management of material and information. The commitment of supply chain partners is important and requires to work together to coordinate order generation, order taking, and order fulfillment in Supply Chain Management. To maximize customer value and gain a competitive advantage in the marketplace is the active streamlining of a business’ supply-side activities in Supply Chain Management. Development and implementation supply chains by suppliers is the effort represents Supply Chain Management that are as efficient and economical as possible. To product and development, the information systems are needed to direct these undertakings which is

One of the greatest benefits from long-term supply chain collaboration (and one that consistently delights operationally oriented managers) are the cost savings that result from routine procedures over the life of the relationship. When buyers and suppliers begin a relationship, there interactions often are fraught with inefficiencies and expensive company legacy’s , adding to the cost of doing business in year one. In year two, however, procedures typically become more streamlined, issues in IT are worked through, and interpersonal relationships between organizations become more

Supply chain management is known to share resources and information as a complete business process, for example consider the overall optimisation as an objective, which has aims to completely get rid of the any waste which is in the process. These kinds of objectives are for large multinational companies to reduce costs and to be able to build self-competitive advantages. It is important for multinational companies to gain profits from there markets, which is known to be done by improving their competitive use of supply chain management. The main advantage could be the use of reducing costs by controlling the supply chain very accurately. To be able to maximise costs, it is ideal that companies reduce the costs of products to a lower level in the industry. With the use of integration of industrial chain which controls the supply chain the waste and uncertainty can be reduced as well as inefficient steps consequently there will be a rather reasonable amount of costs which will decrease. Poor supply chain management can damage a multinationals image predominantly it can result in excessive amounts of inventory, the largest asses

The process of managing modern supply chain involves a lot of effort from people that are highly trained, motivated and experienced. Despite the traditional job descriptions as distributers’ purchasers and producers, in today’s competitive world we also need good financial, executive, operational and customer service officers. Everything’s more complex and a lot of processes need to be done right in order to run successful business from this caliber. Revolutionary changes are introduced, combining the good old way of doing things right, with the new technology and innovations, also brand new ideas and concepts mixed with the traditional labor power and management. The most difficult part here is to find the perfect balance

The first metric used to measure the supply chain’s performance is called the Balanced Scorecard (BSC). (Kaplan and Norton, 1996) This model is valuable as it informs the company about the level of efficiency of the supply chain in the following four areas: financial, customer satisfaction, internal processes and learning and growth ability. Moreover, it allows to identify which sector is underperforming and requires more attention. Each of the four dimensions has a specific objective and target that are set by the company and are then matched with a metric which will assess performance in each dimension. For instance, related to the financial aspect, if the company’s objective is a 10 percent turnover rise compared to the previous year, it will use the monthly turnover rate to keep track of the progress. The same procedure is to be followed for the three other areas, using different metrics as objectives will be different. The selected measurements must be meaningful to the firm as this model will be used to guide the organisation’s strategy on the long-run.

Organizations must pursue the goal of matching supply with demand in a timely fashion through the most efficient use of cross-chain resources. Supply chain partners must work together to maximize resource productivity, develop standardized processes, eliminate duplicate efforts, and minimize inventory levels. Such steps will help the organization reduce waste, drive out costs, and achieve efficiencies in the supply chain.

In the current scenario, there is a tremendous shift from traditional management systems to supply chain and customer relationship management. Earlier companies used to follow traditional management systems where the main emphasis was on the Activity-based costing (ABC). It represents analyzing the activities and then assigning resources on to them. In all this process the activities become cost centers and costing is defined at each stage. On the other hand with the invention of technology and automated processes, now the management is moving towards use to supply chain and customer relation management to track the suppliers of both raw materials and finished products. Also, companies nowadays are taking steps to have a set of satisfied customers. The shift in the vision of companies leads to development and use of both supply chain and customer relation management tools.

Supply chain management is a process which requires precise efficiency for smooth business practice. Efficient supply chain management can separate companies within an industry and deliver impressive results with net positive effects. The theme of supply chain management requires the effective use of assets to satisfy customer needs. Components include, the flow of goods, the transportation of products, labor usage, warehouse/inventory management, aggregate planning, and etc. Given recent technology, efficiency has been ultra-modernized as algorithms and programming have developed statistics to formulate the best result to minimize the total cost of operations. This ultimately increases productivity and maximizes efficiency. While every