Supply Chain Management
The average company spends nearly half of every dollar that it earns on production
In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains
Basics of Supply Chain
The supply chain has three main links:
- Materials flow from suppliers and their “upstream” suppliers at all levels
- Transformation of materials into semifinished and finished products through the organization’s own production process
- Distribution of products to customers and their “downstream” customers at all levels
Information Technology’s Role in the Supply Chain
IT’s primary role is to create integrations or tight process and information linkages between functions within a firm
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Visibility
Supply chain visibility – the ability to view all areas up and down the supply chain
Bullwhip effect – occurs when distorted product demand information passes from one entity to the next throughout the supply chain
Consumer Behavior
Companies can respond faster and more effectively to consumer demands through supply chain enhances
Demand planning software – generates demand forecasts using statistical tools and forecasting techniques
Competition
Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain
Supply chain execution (SCE) software – automates the different steps and stages of the supply chain
Speed
Three factors fostering speed
Supply Chain Management Success Factors
SCM Stories
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