Importance Of Supply Chain Management To Organization Management Essay

Importance Of preparation Chain vigilance To Organization circumspection EssayEfficient sum up stove of mountains management is the essential to creation equal to satisfy market demand and to do so in a way is profitable (Hugos, 2006). Supply range of a function management of the schema that enables them to deliver the best value to their consumers im do down generate a smashed demand for the agreement product or services. When selective information is shared in between supply range of mountains networks, it tummy result a more(prenominal) than efficient flow rate of goods and services (Anand M terminuselson, 1997), reduced memoranduming level, and lower be (Yu, Yan Cheng, 2001), which benefits the overall network.Hence, the make-up nates do mass manufacturing and mass customization that exit offer competitive advantages given that the product life cycle if the product is improve because the organization lead offer variety of product to unalike market s egment and consumers preference. For example, Dell became the largest buzz offr for personal computer in the world after they implemented the supply chain management to transmute their strategy by adopting a direct sales strategy, building any personal computer to order and shipping it directly to the node (Klinker, Terrell Mahfouz, 2006).2.2. Supply management2.2.1. Communication, Trust commitmentAccording to Towill, (1996) decision makers need to await the overall of the process so they raft manage the supply chain as one single association, to minimum uncertainty updated feed anterior and feedback information flow coupled with optimal decision making. Hence, organization that trusted the supplier willing to communicate and allow information free flow among them to ease their businesses. Communicate with other organization within the supply chain management that controls their critical resources allow them to compete effectively in their surroundings (as cited in Samad dar, Nargundkar Daley, 2006).Moreover, supply chain management built on a foundation of trust and commitment among the supply chain members (Lee Billington, 1992). Commitment of coalition in the supply chain management will dedicated their resources to come upon the goal of the supply chain and their performance (Chen Paulraj, 2004). Organization is more and more rely on their trusted supplier to improve the product quality, produce the product faster and reduce the product price so they can compete with their competitors (Liker Choi, 2006). For example, Dell developed a strong relationship with twain suppliers and the customers allow it to ensure those computer components are available from supplier to reach customer demand (Taylor, 2005).2.2.2. Long- name relationshipsSupplier will become part of the supply chain and corroborate a long relationship on the competiveness of the process of the supply chain with a good supply chain management (Choi Hartley, 1996) .Moreover, information sharing is an outstanding aspect on incorporation and joint inter-organizational relationship (Huang, Lau Mak, 2003).Long-term relationship will create opportunity to produce the synergy of intra and intercompany integration and management (Lambert et al., 1997)Limitation of information in the supply chain will lead to Bullwhip effect such as extra inventory investment, poor customer services, wrong capacity allocation, reduce revenue enhancement and missed production (Lee, Padmanabhan, Whang, 1997). Plan along the supply chain and arrange information can control Bullwhip effect and improve their supply chain relationship and performance (Lee et al. 1997).According to P.Fiala, (2004) information ex shift is a real important issue for coordinating actions. If member of the supply chain have free flow information it can reduced their lead m of information such as orders, demand and capacity forecast, point-of-sale selective information for the whole supply chain . (Lee, So Tang, 2000) find that the benefits of sales information sharing and identified the drivers that have significant impacts.Organization that have long term relationship from the supplier will obtains larger inventory or comprise reduction when the demand is highly associated if the lead time is long. Eventually customer will receive a higher quality, constitute-effective product in a shorter amount of time. For example, Chrysler Corporation cut their supplier base in half and brought the remaining supplier in on the design of a new generation cars and develop long term relationship establish on trust. The long term relationship has helped the organization increase in profit (Braun, Guthrie, McCampbell, Sit).2.3 Reduce costSupply chain management system can influence the organization cost for administrative personnel and information purpose to plan and control the flow of inventory (Jonsson, 2008). So the skill of supply chain management can reduce the organization inve ntory and stock cost (Steckel, Gupta Banerji, 2004). The efficiency of the supply chain management allows the organization having the right good at the right time in a right place (Ketchen Hult, 2007).Therefore, organization can deliver their product gibe to agreement so it can reduce the shortage cost, delay cost arise when tardily delivery occur to compensate the customers. Besides, organization does non need to hold inventory can reduce their cost of storing their inventory at their warehouse. Without using warehouse organization can save the conveyancing cost from the warehouse to the organization. Moreover, the cost reduction of the production organization can create customer value by reducing the price of the end users product (Ketchen et al., 2007). For example, Apple Computer is making lose in 1997 Steve Jobs do some substitutes in the supply chain management has saved the organization by reducing the cost of inventory (Taylor, 2005)4. Challenges of Supply Chain Manag ement4.1 PlanningAppropriated plan of the supply chain management can get advantages, improperly handled will lead to tragic (Taylor, 2005). Accurate homework is important but cookery error will lead to dramatically change in plans (Stadtler, 2004). For example, Kmart Corporation have planning error that the organization cripple its ability it match the price offered by Wal-Mart, the worse is when the organization able to lure back the customer but the supply chain non able to deliver to them in time. Due to the wrong forecast and planning Kmart is now bankrupt (Konicki, 2002).4.3 Supplier attentionSupply chain challenges accept lack of supplier attention. While lack of supplier attention will cause late placed orders due to conflicting objectives and goal. Potential issues of vendors, late delivered and wrong delivered allow the have teams potential risks. Early obtaining material will minimize risk such as additional cost. Internal procural issues also subject to supply chai n management (Henrie, 2006).Due to this problem, company cannot managing well as when the material arrive, when the material should be purchase, and how many quantities should be purchase and when the material should be delivered. For example, NASA Company had experience this problem because the project will face shrinkage costs, breakage and additional cost for warehouse (Galluzzi, Zapata, Steele Weck).4.4 Customer valueCustomers always change the value perception toward a product, so the organizations will response to the change or predict the change (Flint, 2004). Therefore, organization need to response toward the challenge by doing research on how the value perception of the customer change and improve their prediction and planning process. Competitive advantage can be gain if organization can predict their customer perception of the end user product (Slater, 1997).