Supply Chain Management (3rd Edition) Ch1 Summary

Answer 2- If there should be a single location for all three companies the inventory holding cost will reduce because the product is placing at one location instead of different three locations. Moreover, by doing this the insurance and misplacing of product of cost reduce but in transit of inventory will increase because the shipments are truck load and the distance between customers and distribution centre is far. Furthermore, with this the service level improved which means order fulfilment process improved too. In addition to this, the

Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;

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.

A supply chain is a net work of firms. Thus, each firm in the chain should build its own supply chains to support the competitive priorities of its services or products. Two distinct designs used to competitive advantage are efficient supply chains and responsive supply chains. Efficient supply chains work best in environments where demand is highly predictable. The focus of the supply chain is on efficient flows of services and materials keeping inventories to a minimum. The firm’s competitive priorities are low-cost operations, consistent quality, and on-time delivery. Responsive supply chains designed to react quickly in order to hedge against uncertainties in demand. Work best when firms offer a great variety of services or products and demand predictability is low. Typical competitive priorities are development speed, fast delivery times, customization, variety, volume flexibility, and top quality. Tables below show the environments and design features that best suit each design.

Supply chains manage the movement of products from the acquisition of raw materials through production and finally distribution to the end user. A properly designed supply chain can create many opportunities to drive down cost and increase revenue opportunities. In order to create a supply chain that is sustainable and flexible it is necessary to identify and align company goals and initiatives with the manufacturing and distribution of products.

A supply chain is a system of people, activities, information, and resource involved in creating a product and moving it their customers. First is the strategic supply chain management. Best value supply chains strive to excel along four measures. Speed is the time duration from initiation to completion of the production and distribution process. Quality refers to the relative reliability of supply chain activities. Supply chains’ efforts at managing cost involve enhancing value by either reducing expenses or increasing customer benefits for the same cost level. Flexibility refers to a supply chain’s responsiveness to changes in customers’ needs. The second component of the strategic supply chain is agility, the supply chain’s relative capacity to act rapidly in response to dramatic change in supply and demand. Adaptability refers to a willingness and capacity to reshape supply chains when necessary. Lastly, alignment refers to creating consistency in the interest of all participants in a supply

Supply Chain strategies have become increasingly important in this highly competitive interconnected global economy. The customers have the ability to drive down cost, increase services,

5. Proposed location of the new warehouse and transportation distances from the new location to each retail outlet/customer

Simchi, D., Kaminsky, P., Shankar, R. (2008). Designing and managing the supply chain: concepts, strategies, and case studies, 3, 384-385.

In order for a supply chain to run as efficiently as possible, considerations must be in place to ensure the logistics function is operating in an appropriate manner. Part of this is ensuring that the distribution centre is located in an area that allows the greatest efficiency, all the while still meeting operational and strategic needs (Van Thai & Grewal, 2005, p. 4)

The object of designing this single warehouse network is to ensure that the size and location of the warehouse is in the correct geographical location so that distribution of the goods will meet or exceed the delivery expectations of the customers. The warehouse size must be sufficient to ensure that goods can be stored accurately, safely and in a manner that inventory control can be achieved. The warehouse size should be evaluated for current needs as well as predicted future growth without being too large, therefore creating waste. The location of the facility must take into account the inbound and outbound transportation modes, along with the transit times and costs of the service requirements for both.

The end result is as supply chain design may ultimately be the competitive advantage as much as the product it produces. Supply chain design must now be part of the overall strategy for an organization rather than something that “just happens”.

A supply chain involved a variety of stages. These supply chain stages includeSuppliers , Manufacturers, Distributors, Retailers and Customers or Consumers. Each stage in a supply chain is connected through the flow of products, information and funds. These flows often occur in both directions and may be managed by one of the stages or an

Prepare Contingency Plans: Supply chain risks must be identified and planned for. It is important to consider supply chain disruptions such as natural disasters, terrorism, security threats, piracy, supplier’s financial collapse, and infrastructure or process failure and there are other risks that all businesses face such as demand volatility and compliance issues. (book, p.241). Developing back up processes and plans takes considerable time yet preparation can be the difference between business continuity and end.

Supply Chain is a system of organizations, people, activities, information and resources related to the transfer of products or services from suppliers (supply chains) to customers. Supply chain operations involve converting natural resources, raw materials and components into a finished product to be delivered to the end customer. In complex supply chain systems, the products used can re-enter the supply chain at any point where the residual value can be recycled. Supply chain links the value chain. Supply chain management includes all planning and management related to supply, procurement, conversion, and logistics management activities. Equally important is that it also involves coordination with partner channels such as vendors, intermediaries, third-party service providers, and customers. Essentially, supply chain management integrates supply and demand management within and outside the company. Supply chain management is an integrated function with the primary responsibility for connecting the core business functions and business processes within companies into a high-performance and engagement business model. It covers all of the logistics management activities outlined above, as well as manufacturing activities, and it promotes collaborative processes and activities with marketing, sales,