Problems addressed by supply chain management

Problems addressed by summate stove focusingProblems addressed by add on strand directionSupply filament management must(prenominal) address the following problemsDistribution profits Configuration number, location and network missions of suppliers, resultion facilities, distribution centers, w atomic number 18houses, cross-docks and clients.Distribution Strategy questions of operating swan (centralized, decentralise or sh atomic number 18d) extraditey scheme, e.g.,direct shipment, pool point shipping,cross docking, DSD (direct store delivery), closed loop shipping mode of transport, e.g.,motor carrier, including truckload,LTL,parcel hale intermodal transport, including TOFC (trailer on flatcar) and COFC (container on flatcar) ocean freight airfreight replenishment strategy (e.g., pull, push or hybrid) and superman swear (e.g., owner-operated,private carrier,common carrier, contract carrier, or3PL).Trade-Offs in Logistical Activities The above activities must be well c oordinated in coiffure to achieve the lowest total logistics cost. Trade-offs whitethorn increase the total cost if but wholenessness of the activities is optimized. For example, teeming truckload (FTL) rates ar more(prenominal) economical on a cost per p all toldet basis than less(prenominal) than truckload (LTL) shipments. If, however, a full truckload of a crop is ordered to reduce transference costs, there will be an increase in live computer memory holding costs which may increase total logistics costs. It is therefore dogmatic to take a systems preliminary when planning logistical activities. These trade-offs are key to developing the most good and effective Logistics and SCM strategy.information Integration of executees through the ply kitchen stove to share semiprecious information, including demand signals, forecasts, inventory, transportation, potency collaborationism, etc.Inventory Management Quantity and location of inventory, including vulgar materi als, work-in-progress (WIP) and finished goods.Cash-Flow Arranging the payment price and methodologies for exchanging funds across entities within the fork over bowed stringed instrument.Supply drawing string execution means managing and coordinating the drive of materials, information and funds across the ply chemical kitchen range. The merge is bi- bootal.Activities/functionsSupply set up management is a cross-function approach including managing the movement of raw materials into an makeup, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the validation and toward the end-consumer. As organizations strive to focus on mall competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution convey. These functions are progressively being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying guest demand, while trim management control of daily logistics operations. Less control and more make out concatenation quislings led to the being of contribute chain management constructs. The purpose of add chain management is to improve trust and collaboration among tally chain partners, thus improving inventory visibility and the velocity of inventory movement.Several posers turn out been proposed for understanding the activities required to manage material movements across organizational and functional boundaries.SCORis a sum up chain management model promoted by the Supply Chain Council. Another model is the SCM Model proposed by the worldwide Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and operational directs . The CSCMP has adopted The American Productivity Quality Center (APQC) Process Classification FrameworkSMa high- take aim, industry-neutral enterprise pr ocess model that allows organizations to read their seam processes from a cross-industry viewpoint.Strategic levelStrategic network optimization, including the number, location, and size of warehousing,distribution centers, and facilities.Strategic partnershipswith suppliers, distributors, and customers, creating communication channels for critical information and operational improvements much(prenominal) ascross docking, direct shipping, andthird-party logistics.Product life cycle management, so that brand-new and existing products can be optimally commixd into the hang on chain and capacity management activities.Information applied sciencechain operations.Where-to-make andmake-buy decisions.Aligning overall organizational strategy with bring out strategy.It is for long term and leases election commitment.tactical levelSourcing contracts and other purchasing decisions.Production decisions, including contracting, schedule, and planning process definition.Inventory decisio ns, including quantity, location, and quality of inventory.Transportation strategy, including frequency, routes, and contracting.Benchmarkingof all operations against competitors and implementation ofbest truststhroughout the enterprise.Milestone payments.Focus on customer demand and Habits.Operational level day-to-day production and distribution planning, including all nodes in the supply chain.Production scheduling for all(prenominal) manufacturing facility in the supply chain (minute by minute).Demand planning and forecasting, coordinating the demand forecast of all customers and manduction the forecast with all suppliers.Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers.Inbound operations, including transportation from suppliers and receiving inventory.Production operations, including the consumption of materials and flow of finished goods.Outbound operations, including all fulfilment activities, warehousing and transporta tion to customers. prepare promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers.From production level to supply level accounting all transit damage cases arrange to settlement at customer level by maintaining company loss through insurance company.Importance of supply chain managementOrganizations increasingly find that they must rely on effective supply chains, or networks, to compete in the orbiculate food grocery and networked economy.7In Peter Druckers (1998) new management paradigms, this concept of assembly line relationships extends beyond traditional enterprise boundaries and seeks to take aim undefiled business processes throughout a value chain of multiple companies.During the past decades, world(a)ization, outsourcing andinformation technologyhave enabled many organizations, much(prenominal) asDellandHewlett Packard, to successfully operate solid collaborative su pply networks in which to each one specialized business partner focuses on only a few key strategic activities (Scott, 1993). This inter-organizational supply network can be acknowledged as a new form of organization. However, with the complicated interactions among the players, the network bodily structure fits neither market nor hierarchy categories (Powell, 1990). It is not clear what kind of exploit impacts contrasting supply network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among the players. From a systems perspective, a abstruse network structure can be de make up into individual component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of an internal management control structure is known to impact local firm p erformance (Mintzberg, 1979).In the 21st century, changes in the business environment have contributed to the development of supply chain networks. First, as an outcome of globalization and the proliferation of transnational companies, joint ventures, strategic alliances and business partnerships, monumental success factors were identified, complementing the earlier Just-In-Time, Lean Manufacturing and Agile Manufacturing answers.8Second, technological changes, peculiarly the dramatic fall in information communication costs, which are a significant component of doing costs, have led to changes in coordination among the members of the supply chain network (Coase, 1998).Many researchers have recognized these kinds of supply network structures as a new organization form, using terms such as Keiretsu, increase Enterprise, Virtual Corporation, Global Production lucre, and Next Generation Manufacturing System.9In general, such a structure can be defined as a group of semi-independen t organizations, each with their capabilities, which collaborate in ever-changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration (Akkermans, 2001).The security management system for supply chains is described in ISO/IEC 28000 and ISO/IEC 28001 and related standards published conjointly by ISOandIEC.Historical developments in supply chain managementSix major movements can be observed in the evolution of supply chain management studies Creation, Integration, and Globalization (Movahedi et al., 2009), Specialization Phases wiz and Two, and SCM 2.0.1. human race eraThe termsupply chain managementwas first coined by a U.S. industry consultant in the premature 1980s. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line. The characteristics of this era of supply chain management include the need for large-sca le changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management.2. desegregation eraThis era of supply chain management studies was highlighted with the development of Electronic Data trade (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource provision (ERP) systems. This era has continued to develop into the 21st century with the elaboration of internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration.In fact a supply chain can be classified as a Stage 1, 2 or 3 network. In stage 1 type supply chain, various systems such as Make, Storage, Distribution, Material control, etc are not touched and are independent of each other. In a stage 2 supply chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain is one in which vertical in tegration with the suppliers in upstream direction and customers in downstream direction is achieved. An example of this kind of supply chain is Tesco.3. globalization eraThe third movement of supply chain management development, the globalization era, can be characterized by the attention granted to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. Although the use of global sources in the supply chain of organizations can be traced back several decades (e.g., in the cover industry), it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. This era is characterized by the globalization of supply chain management in organizations with the goal of increasing their competitive advantage, value-adding, and reducing costs through global sourcing.4. strength eraphase one outsourced manufacturing and distributionIn the 1990s, in dustries began to focus on core competencies and adopted a forte model. Companies abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed management requirements by extending the supply chain well beyond company walls and distributing management across specialized supply chain partnerships.This transition similarly re-focused the fundamental perspectives of each respective organization. OEMs became brand owners that needed deep visibility into their supply base. They had to control the entire supply chain from above instead of from within. Contract manufacturers had to manage bills of material with different part come schemes from multiple OEMs and bind customer requests for work -in-process visibility and vendor-managed inventory (VMI).The specialization model farms manufacturing and distribution networks composed of multiple, individual supply chains specific to products, suppliers, and customers who work t ogether to design, manufacture, distribute, market, sell, and service a product. The set of partners may change consort to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands.5. specialization eraphase two supply chain management as a serviceSpecialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non-asset-based carriers and has matured beyond transportation and logistics into aspects of supply planning, collaboration, execution and performance management.At any given moment, market forces could demand changes from suppliers, logistics providers, locations and customers, and from any number of these specialized participants as components of supply chain networks. This vari cleverness has significant effects on the supply chain infrastructure, from the foundation layers of establishing and managing the electro nic communication betwixt the trading partners to more complex requirements including the configuration of the processes and work flows that are essential to the management of the network itself.Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and capability. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is the jumper fit reason why supply chain specialization is gaining popularity.Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken root primarily in transportation and collaboration categories. This has progressed from the Application Service Provider (ASP) model from approximately 1998 through 2003 to the On-Demand model from approximately 2003-2006 to the software system as a Service (SaaS) model currently in focus today.6. supply chain management 2.0 (SCM 2.0)Building on globalization and specialization, the term SCM 2.0 has been coined to describe both the changes within the supply chain itself as well as the evolution of the processes, methods and tools that manage it in this new era.Web 2.0 is defined as a leaning in the use of the World Wide Web that is meant to increase creativity, information sharing, and collaboration among users. At its core, the common attribute that Web 2.0 brings is to help navigate the vast amount of information operable on the Web in order to find what is being sought. It is the notion of a usable pathway. SCM 2.0 follows this notion into supply chain operations. It is the pathway to SCM results, a combination of the processes, methodologies, tools and del ivery options to guide companies to their results quickly as the complexity and secureness of the supply chain increase due to the effects of global competition, rapid price fluctuations, surging oil prices, short product life cycles, expanded specialization, near-/far- and off-shoring, and talent scarcity.SCM 2.0 leverages proven solutions designed to rapidly deliver results with the carefreeness to quickly manage future change for continuous flexibility, value and success. This is delivered through competency networks composed of best-of-breed supply chain domain expertise to understand which elements, both operationally and organizationally, are the critical few that deliver the results as well as through intimate understanding of how to manage these elements to achieve desired results. Finally, the solutions are delivered in a variety of options, such as no-touch via business process outsourcing, mid-touch via managed services and software as a service (SaaS), or high touch in the traditional software deployment model.Supply chain business process integrationSuccessful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario the purchasing department places orders as requirements turn known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain partners can only be fully leveraged throughprocess integration.Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information. According to lambert and Cooper (2000), operating an integrated supply chain requires a continuous information flow. However, in many companies, management has reached the conclusion that optimizing the product flows cannot be accomplished without implementin g a process approach to the business. The key supply chain processes stated by fifty (2004)10areCustomer relationship managementCustomer service managementDemand managementOrder fulfillmentManufacturing flow managementSupplier relationship managementProduct development and commercializationReturns management overmuch has been written about demand management. Best-in-Class companies have similar characteristics, which include the following a) Internal and external collaboration b) Lead time reduction initiatives c) Tighter feedback from customer and market demand d) Customer level forecastingOne could suggest other key critical supply business processes which combine these processes stated by Lambert such asCustomerservice managementProcurementProduct development and commercializationManufacturing flow management/ accommodate material distributionOutsourcing/partnershipsPerformance measurementa) Customerservice managementprocessCustomer Relationship Management concerns the relations hip between the organization and its customers. Customer service is the source of customer information. It also provides the customer with real-time information on scheduling and product availability through interfaces with the companys production and distribution operations. Successful organizations use the following steps to ground customer relationshipsdetermine mutually satisfying goals for organization and customersestablish and maintain customer rapport attain positive feelings in the organization and the customersb) Procurement processStrategic plans are drawn up with suppliers to donjon the manufacturing flow management process and the development of new products. In firms where operations extend globally, sourcing should be managed on a global basis. The desired outcome is a win-win relationship where both parties benefit, and a reduction in time required for the design cycle and product development. Also, the purchasing function develops rapid communication systems, such aselectronic data interchange(EDI) and Internet linkage to convey possible requirements more rapidly. Activities related to obtaining products and materials from outside suppliers involve resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage, handling andquality assurance, many of which include the responsibility to coordinate with suppliers on matters of scheduling, supply continuity, hedging, and research into new sources or programs.c) Product development and commercializationHere, customers and suppliers must be integrated into the product development process in order to reduce time to market. As product life cycles shorten, the get hold of products must be developed and successfully launched with ever shorter time-schedules to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process mustcoordinate with customer relationship management to identify customer-articulat ed askselect materials and suppliers in conjunction with procurement, anddevelop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the product/market combination.d) Manufacturing flow management processThe manufacturing process produces and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be flexible to respond to market changes and must accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in nominal lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness and efficiency in meeting customer demand. Activities related to planning, scheduling and supporting manufacturing operations, such as work-in-process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites and maximum flexibility in the coordination of geographic and lowest assemblies postponement of physical distribution operations.e) Physical distributionThis concerns movement of a finished product/service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product/service is a vital part of each channel participants marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing, thus it relate a marketing channel with its customers (e.g., links manufacturers, wholesalers, retailers).f) Outsourcing/partnershipsThis is not just outsourcing the procurement of materials and components, but also outsourcing of services that traditionally have been provided in-house. The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a typical advantage, and outsource everything else. This movement has been particularly evident inlogisti cswhere the provision of transport, warehousing and inventory control is increasingly subcontracted to specialists or logistics partners. Also, managing and controlling this network of partners and suppliers requires a blend of both central and local involvement. Hence, strategic decisions need to be taken centrally, with the monitoring and control of supplier performance and day-to-day liaison with logistics partners being best managed at a local level.g) Performance measurementExperts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. Taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can both be correlated with firm performance. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage, logistics measurement becomes increasingly grievous because the difference between profitable and unprofitabl e operations becomes more narrow. A.T. Kearney Consultants (1985) noted that firms engaging in schoolwide performance measurement realized improvements in overall productivity. According to experts, internal measures are generally accumulate and analyzed by the firm includingCostCustomer ServiceProductivity measuresAsset measurement, andQuality.External performance measurement is examined through customer perception measures and best practice benchmarking, and includes 1) customer perception measurement, and 2) best practice benchmarking.h)Warehousing management As a case of reducing company cost expenses, warehousing management is carrying the valuable role against operations. In case of perfect storing office with all convenient facilities in company level, reducing manpower cost, dispatching authority with on time delivery, loading unloading facilities with proper area, area for service station, stock management system etc.Components of supply chain management are as follows 1. Standardization 2. clasp 3. CustomizationTheories of supply chain managementCurrently there is a gap in the literature available on supply chain management studies there is no theoretical support for explaining the existence and the boundaries of supply chain management. A few authors such as Halldorsson, et al. (2003), Ketchen and Hult (2006) and Lavassani, et al. (2009) have tried to provide theoretical foundations for different areas related to supply chain by employing organizational theories. These theories includeResource-Based View (RBV)Transaction Cost outline (TCA)Knowledge-Based View (KBV)Strategic Choice Theory (SCT)Agency Theory (AT)Institutional theory (InT)Systems Theory (ST)Network Perspective (NP)Materials Logistics Management (MLM)Just-in-Time(JIT)Material Requirements Planning(MRP)Theory of Constraints(TOC)Total Quality Management(TQM)Agile ManufacturingTime Based arguing (TBC)Quick Response Manufacturing (QRM)Customer Relationship Management(CRM)and many mo re,Supply chain centroidsTax cost-effective supply chain managementTax Efficient Supply Chain Managementis a business model which consider the effect ofTaxin design and implementation of supply chain management. This is different in the context of an planetary issue as businesses which is cross-nation pay different tax rates in different countries. Due to the differences, global players have the opportunity to calculate and optimize supply chain based on tax efficiencylegally. This is one method of gaining more profit for companies in the international trade, i.e. within the parameter of a global supply chain.Supply chain sustainabilitySupply chain sustainabilityis a business issue affecting an organizations supply chain or logistics network and is frequently quantified by comparison with SECH ratings. SECH ratings are defined associal, ethical, cultural and healthfootprints. Consumers have become more aware of the environmental impact of their purchases and companies SECH ratings and, along with non-governmental organizations (NGOs), are setting the agenda for transitions to organically-grown foods, anti-sweatshop labor codes and locally-produced goods that support independent and small businesses. Because supply chains frequently account for over 75% of a companyscarbon footprint14many organizations are exploring how they can reduce this and thus improve their SECH rating.For example, in July, 2009 the U.S. basedWal-Martcorporation announced its intentions to create a globalsustainabilityindex that would rate products according to the environmental and social impact made while the products were manufactured and distributed. The sustainability rating index is intended to create environmental accountability in Wal-Marts supply chain, and provide the motivation andinfrastructurefor other retail industry companies to do the same.Components of supply chain management integrationThe management components of SCMThe SCM components are the third element of the four -square circulation framework. The level of integration and management of a business process link is a function of the number and level, ranging from low to high, of components added to the link (Ellram and Cooper, 1990 Houlihan, 1985). Consequently, adding more management components or increasing the level of each component can increase the level of integration of the business process link. The literature on business process re-engineering,buyer-supplier relationships,and SCMsuggests various possible components that must receive managerial attention when managing supply relationships. Lambert and Cooper (2000) identified the following componentsPlanning and controlWork structureOrganization structureProduct flow facility structureInformation flow facility structureManagement methodsPower and leadership structureRisk and reward structure socialization and attitudeHowever, a more careful examination of the existing literature19leads to a more comprehensive understanding of what shoul d be the key critical supply chain components, the branches of the previous identified supply chain business processes, that is, what kind of relationship the components may have that are related to suppliers and customers. Bowersox and Closs states that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement (Bowersox and Closs, 1996). A first-string level channel participant is a business that is willing to participate in the inventory ownership responsibility or assume other aspects of financial risk, thus including primary level components (Bowersox and Closs, 1996). A lower-ranking level participant (specialized) is a business that participates in channel relationships by performing essential services for primary participants, including secondary level components, which support primary participants. Third level channel participants and components that support the primary level channel participants and are the fundamental branche s of the secondary level components may also be included.Consequently, Lambert and Coopers framework of supply chain components does not lead to any conclusion about what are the primary or secondary (specialized) level supply chain components (see Bowersox and Closs, 1996, p.93). That i