Supply Chain Power Tool T3

6304 WordsSep 24, 201326 Pages
Power Tool Proposal – Task 3 In order to operate at maximum profit levels, a business must have lower operational costs than the competition. The means to satisfying lower operational costs is Supply Chain Management. Supply Chain Management is a cross-industry wide philosophy to improve operational efficiency by integrating activities of obtaining goods and services to create a product. When implementing a supply chain strategy, consideration must be given to the approach given to suppliers, metrics to measure success of the plan, risk and risk mitigation. In this paper we will discuss the best supply chain management strategy for a newly formed company called Tyson Tools. The organization plans to manufacture electric drills,…show more content…
In addition, these types of suppliers may not be willing to deliver to work cells if Tyson is to implement JIT and Lean Operations strategies which will have a negative impact on work in process and long term unit costs. As a result, this strategy is not recommended. Another Supply Chain Management strategy is backward integration. Backward integration would consist of Tyson Tools purchasing its suppliers to reduce delivery timing and cost reduction of purchased items. This type of strategy requires the purchasing company to have large amounts of capital and an existing talent pool with core competencies to manage a supply company. This type of strategy can be difficult to manage and more difficult to reverse leading to financial ruin. In comparison, the alternative method of long-term partnering takes away the risk of the buyer having to be the “specialist” of the product from beginning to end. Discuss Metrics that could be used to measure performance of the supply chain. Supply chain metrics can be used to align processes of all firms within the long term partnership supply chain and create a competitive advantage of lower costs. Supply chain metrics are typically used to determine how the company is preforming and how much capital investment is tied to inventory in comparison to

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