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MGMA01H3 (184)
Chapter 17

chapter 17

4 Pages
68 Views

Department
Management (MGM)
Course Code
MGMA01H3
Professor
Ingrid L.Stefanovic

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INTRODUCTION
Products that are moving quickly can be replenished at the retail level before current
supplies run out, so sales are not missed
Supply chain is a network of facilities and distribution options that performs the
functions of procurement of materials, transformation of these materials into intermediate
and finished products, and the distribution of these finished products to customers
Seven key elements involved in a supply chain
oSupply
oProduction
oInventory
oLocation
oTransportation
oInformation
oCustomer needs
Supply chain management is the systematic, strategic coordination of the traditional
business functions and the tactics across these business functions within a particular
company and across businesses within the supply chain for the purposes of improving the
long term performance of the individual companies and the supply chain as a whole
Key success to supply chain is the speed that the activities can be accomplished
Characteristics of effective supply chain management
oReduced inventories
oLower operating costs
oProduct availability
oCustomer satisfaction
Since supply chain managements goal is to build flexible and efficient chains,
manufacturers need to forge close, long term ties with their suppliers
Most effective alliances with external suppliers
oPower balancing
Purchasing managers balance their contracts so that neither manufacturer
nor supplier is highly dependent on each other
oCo-Specialization
Purchasing managers try to achieve a degree of mutual dependence in their
alliances
oTarget Costing
Purchasing manager set target costs based on the manufacturer’s goal for
the final selling price
Cooperative approach to pricing
oPersonal ties
Personal ties among managers are often what keep alliances productive
Logistics: The Critical Element in Supply Chain Management
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Description
INTRODUCTION Products that are moving quickly can be replenished at the retail level before current supplies run out, so sales are not missed Supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers Seven key elements involved in a supply chain o Supply o Production o Inventory o Location o Transportation o Information o Customer needs Supply chain management is the systematic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain for the purposes of improving the long term performance of the individual companies and the supply chain as a whole Key success to supply chain is the speed that the activities can be accomplished Characteristics of effective supply chain management o Reduced inventories o Lower operating costs o Product availability o Customer satisfaction Since supply chain managements goal is to build flexible and efficient chains, manufacturers need to forge close, long term ties with their suppliers Most effective alliances with external suppliers o Power balancing Purchasing managers balance their contracts so that neither manufacturer nor supplier is highly dependent on each other o Co-Specialization Purchasing managers try to achieve a degree of mutual dependence in their alliances o Target Costing Purchasing manager set target costs based on the manufacturers goal for the final selling price Cooperative approach to pricing o Personal ties Personal ties among managers are often what keep alliances productive Logistics: The Critical Element in Supply Chain Management www.notesolution.com
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