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Chapter 4

Commerce 2KA3 - Chapter 4 Summary

11 Pages
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Department
Commerce
Course Code
COMMERCE 2KA3
Professor
A L I R M O N T A Z E M I

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Description
Chapter 4 Supply Chain ManagementBasics of Supply ChainSupply chain consists of all parties involved directly or indirectly in the procurement of a product or raw materialSupply Chain Management involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitabilityTodays supply chain is a complex web of suppliers assemblers logistic firms salesmarketing channels and other business partners linked primarily through information networks and contractual relationshipsThe Supply chain has three main linksoMaterials flow from suppliers and their upstream suppliers at all levelsoTransformation of materials into semifinished and finished products the organizations own production processesoDistribution of products to customers and their downstream customers at all levelsSCM is becoming increasingly important in creating organizational efficiencies and competitive advantagesTechnology advances in the five SCM components have significantly improved companies forecasting and business operationsInformation Technologys role in the Supply ChainInfo Techs primary role in SCM is creating the integrations or tigh process and information linkages between functions within a firm and between firms which allow the smooth synchronized flow of both information and product between customers suppliers and transportation providers across the supply chainVisibility consumer behaviour competition and speed are a few of the changes resulting from advances in information technology that are driving supply chainsThe five Basic Supply Chain Management componentsPlanA big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient costs less and delivers high quality and value to customersSource companies must carefully choose reliable suppliers that will deliver goods and services required for making productsMake this is the step where companies manufacture their products or servicesDeliver this step is commonly referred to as logistics Logistics is the set of processes that plans for and controls the efficient and effective transportation and storage so supplies from suppliers to customersReturn Companies must create a network for receiving defective and excess products and support customers who have problems with delivered productsVisibilitySupply Chain visibility is the ability to view all areas up and down the supply chainOrganizations must know about customer events triggered downstream but so must their suppliers and their suppliers suppliersBullwhip Effect occurs when distorted product demand information passes from one entity to the next throughout the supply chain These changes ripple throughout the supply chain magnifying the issue and creating excess inventory and costsConsumer BehaviourDemand planning software generates demand forecasts using statistical tools and forecasting techniques Companies can respond faster and more effectively to consumer demands through supply chain enhancements such as demand planning software
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