Supply Chain Power Tool T3

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 supply chain management is considered as a management concept from past two decades as the customers are concerned about timely and safe delivery. The competitiveness has been increasing among the companies to deliver the products as quickly as possible to the customers all around the world. This has made the supply chain management as a vital tool for the management. This is also measured as a competitive parameter for the companies.

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.

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.

Supply chains are an integral part of global quality and cost management initiative, because a typical company’s supply chain cost can represent more than 50% of assets and more than 80% of revenues. (Ball, 2010), in other word, the ABC, Inc should reduce the inventory of chain supply to reduce the cost. In order to do that the Board of Directors of ABC Inc. has to expresses reconsiderations for management across business functions in supply chain management. Managing the flow of raw materials, supplies as well as finished products are equally important as the management

The ultimate goal of supply chain management is to achieve a higher-quality or lower-cost product at the end of the chain. This requires building long-term relationships with a small number of very capable suppliers, who in turn have their own relationships with suppliers.

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,

Supply chain management is a valuable practice whose purpose is to offer businesses a competitive advantage in the market place. According to Jacoby, D. (2010), some companies like Walmart and Dell have applied this system to gain a competitive advantage in the market while others have failed to apply it owing to its complexity. Companies require adequate and accurate information about all the players in the chain management in order for them to meet their consumers, demands while maintaining health relationships with their suppliers. Technology plays a pivotal role in availing such information, and as such, it is an effective tool for chain management. If done in the right way, then organizations will be ahead of the rest of the competitors in the market place. It is for this reason that organizations should invest in proper supply chain management in order for them to enhance their revenues while cutting on the costs.

Supply chain is long and penetrates almost all business processes. The chain can extend from raw materials to final sales or deliveries to end users. It connects an organization with multiple levels of customers as well as suppliers, and acts as a channel on which to exchange information and transfer orders in terms of product flow (CIPS, 2013). The role of supply chain plays in a business determines the necessity of supply chain management (SCM) improvement. According to APICS Dictionary (2016), SCM involves “design, planning, execution, control, and monitoring of supply chain activities”. It affects

Supply chains has been relevantly defined as a “system of organizations which are convoluted through upstream and downstream linkages, in the diverse methodologies and activities that create benefit in the form of services and products in the hands of a definitive consumer”, and is therefore the sum total of efforts in integrating a network of firms and coordination as regards information, material and financial flows. Interestingly, the two main supply chain objectives have moved, from decreasing operating expenses and general inventory levels, to the concerns of how to enhance the customer service and the momentum of product delivery to the business sectors.

Supply Chain Management seeks to guarantee that “merchandise is produced and distributed at the right quantities, to the right locations, and at the right time. . .” (Stock, Boyer, & Harmon, 2010). It is the management of a company’s supply chain by coordination and integration of the multitude of supply chain partners that a company interacts with. Initially, the concept focused on how to make a relationship between supplier and purchaser more efficient but has now been broadened to include the management of many activities, functions, and organizations. In some industries it may include a company’s entire supply chain, including all of its customers, suppliers, and strategic partners (du Toit & Vlok, 2014; Walker & Jones, 2012). The concept has expanded so far today that many argue that there is no longer any competition among individual companies but instead competition among separate supply chains (Brun & Moretto, 2012).

As previously stated, supply chain includes every activity linked to the movement of goods from the raw-materials phase to the end-user stage. The proponents of this business process recognized that vital productivity improves from management of material flow, relationships, and information. Actually, the success and productivity of a business is dependent on the delivery of improved customer and

Business generally is frosted with various challenges, and that facing supply chain seems not to have gained adequate attention. Challenges could force early exit on firms’, thus imposing loses on investments. Therefore to ensure effective and efficient minimization of loses, improve profit, and operate competitively, it then becomes imperative to critically research on the challenges and proffer solutions that would minimize the impact on the chain.

The aim of this report is to perform critical evaluation field report relating to implemented operational Supply Chain Management (SCM) at the Sumitomo Machinery Corporation of America (SMA). The information in this report was gathered during the company’s Chesapeake, VA plant visit on 9th Feb. 2015. A detailed presentation was given by company’s US regional operations manager prior to plant visit followed by a question and answer session. All these helped in gathering the supply chain strategies at Sumitomo, highlighting the organizational drivers behind the development of SCM and state of the art SCM tools applied at the company manufacturing plant.

Today, most organizations are facing increasing challenges and opportunities to remain competitive, the organizations must adapt and improve their performance like reducing costs, rapid development of products and offering high quality products and services. With the continued evolution of supply chain management, customers are showing increased awareness about working effectively with suppliers and in achieving required performance and business results (Srivoravilai et.al, 2011).