Chapter 2 Notes

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Financial Accounting
Course Code
Tim Richardson

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Chapter 2 NotesSupply Chain Management SCMdistribution chain is simply path a product or service follows from the originator of the product or service to the end consumerholding onto inventory in a distribution chain costs money because whoever owns the inventory has to pay for the operation of a warehouse or stores while waiting for someone to buy itSCM involves planning implementing and controllingmonitoring the supply chain in order to increase efficiencySCM controls the movement and storage of RM WIP inventory and FG from suppliers through producers to consumersSCM can also involve SCM software which automates and manages supplier relationships and other crucial business processesSCM tracks inventory and information among business processes and across companiesa SCM system is an IT system that supports supply chain management activities by automating the tracking of inventory and information among business processes and across companiesJIT is a method for producing or delivering a product or service just at the time the customer wants itSC systems also focus on ensuring that the right number of parts or products are available not too many and not too fewintermodal transportation is the use of multiple channels of transportation to move products from origin to destinationStrategic and Competitive Opportunities with SCMthe primary focus of supply chain management may be described as overall cost leadership from Porters three generic strategies bottomline initiative cost reduction and running the organization rungrowtransform frameworka welldesigned SCM system helps an organization by optimizing the following specific supply chain activitiesofulfillmentensuring that the right quantity of parts for production or products for sale arrive at the right timeologisticskeeping the cost of transporting materials as low as possible consistent with safe and reliable deliveryoproductionensuring that production lines function smoothly because highquality parts are available when neededorevenue and profitensuring that no sales are lost because shelves are emptyocost and pricekeeping the cost of purchased parts and prices of products at acceptable levelscooperation among supply chain partners for mutual success is another hallmark of modern supply chain management systemsinformation partnershipscompanies integrating their IT systems and providing customers with the best of what each can offerCustomer Relationship Management CRMa CRM system uses info about customers to gain insights into their needs wants and behaviours in order to serve them bettercustomers interact with companies in many ways and each interaction should be easy enjoyabl
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