Supply Chain Management
How can you make it easier to share information between your customers, suppliers and partners?
Most information is distributed via orders, invoices, inventory lists and in customer information lists. This information is distributed through telephones, faxes and e-mail. With the help of Internet technology you can make your communication more open and flexible. Now you can control your distribution channels, which are connected from supplier to customer through Supply Chain Management.
Supply Chain Management refers to an industry value chain as it assists management to ensure that raw materials are transformed into goods and services and are distributed to retailers through a distribution system. It focuses on reducing waste while maximizing value. The value is created to the end-users through a 1-2-3-tier supply system. The technology used in SCM is to ensure clear communication, fast responses and to get the right parts at the right time.
All your suppliers must be treated as an extension of your company. The supply chain strategy must support your Operation Management strategy. Three main issues must be decided upon when using a supply chain. First, if you decide to use a Low Cost strategy, you would have to select suppliers based primarily on cost. These suppliers must be able to provide your company with low cost products that would meet your functional requirements, minimize your inventory and drive down lead times. So, how do we do this? Seamless integration of the supply chain.
Second, you can use a Response strategy, which enables you to quickly respond to changing requirements and demand to minimize stockouts. This strategy should be used when planning for capacity, speed and flexibility. Third, a Differentiation strategy enables your suppliers to share market research and jointly develop products and options that you can benefit from. This strategy is advisable to use when focusing on product developments.
So What?
A great portion of how well your firm is doing is affected by how efficient you manage your supply chain. Consequently, supply chain management provides a great opportunity for your firm to develop a competitive advantage, often using technology and e-Commerce.
The main benefits for you are:
1. Standardization of the ordering process
2. Information is more trust worthy - eliminates uncertainty
3. You can plan your budget more efficient
4. The planning stage are simplified and your suppliers gain better control of the steps in your value chain.
5. Customers and suppliers can cooperate in a partnership.
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