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SUPPLY CHAIN MANAGEMENT (SCM)
Goechisoft is a Supply Chain Management Developer in Indonesia. |
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Supply Chain Management build to efficiently integrate: Suppliers, Manufacturers, Warehouses, and Distribution centers. So that the product is produced and distributed: in the right quantities, to the right locations, and at the right time.
System-wide costs are minimized and Service level requirements are also satisfied.
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THE OBJECTIVES OF SUPPLY CHAIN MANAGEMENT are to OPTIMIZE:
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>Pre and post-production inventory levels,
>obtain greater efficiency from labor, equipment and space across the company and
>provide flexible planning and control mechanisms. |
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There are several main activities that cut across the components of the supply chain, as well as link them together:
– Purchasing
– Order processing
– Demand planning
– Inventory management
– Warehousing
– Transportation
– Customer service
Supply Chain Management's Functions and Activities:
- Forecasting
- Purchasing
- Inventory management
- Information management
- Quality assurance
- Scheduling
- Production and delivery
- Customer service
Need for Supply Chain Management:
1.Improve operations
2.Increasing levels of outsourcing
3.Increasing transportation costs
4.Competitive pressures
5.Increasing globalization
6.Increasing importance of e-commerce
7.Complexity of supply chains
8.Manage inventories
9.Improve Customer Satisfaction
BENEFITS of SUPPLY CHAIN MANAGEMENT:
-Lower inventories
-Higher productivity
-Greater agility
-Shorter lead times
-Higher profits
-Greater customer loyalty
BENEFITS EXAMPLES of USING SCM: |
Organization:
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Campbell Soup
Hewlett-Packard
Sport Obermeyer
National Bicycle
Wal-Mart
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Benefit:
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Doubled inventory turnover rate
Cut supply costs 75%
Doubled profits and increased sales 60%
Increased market share from 5% to 29%
Largest and most profitable retailer in the world |
THE IMPORTANCE of SUPPLY CHAIN MANAGEMENT:
>Dealing with uncertain environments – matching supply and demand:
-Boeing announced a $2.6 billion write-off in 1997 due to “raw materials shortages, internal and supplier parts shortages and productivity inefficiencies”
-U.S Surgical Corporation announced a $22 million loss in 1993 due to “larger than anticipated inventories on the shelves of hospitals”
-IBM sold out its supply of its new Aptiva PC in 1994 costing it millions in potential revenue
-Hewlett-Packard and Dell found it difficult to obtain important components for its PC’s from Taiwanese suppliers in 1999 due to a massive earthquake.
The growth of technologies such as the Internet enable greater collaboration between supply chain trading partners demands you to do so,
-If you don’t do it, your competitor will
-Major buyers such as Wal-Mart demand a level of “supply chain maturity” of its suppliers.
Today’s Marketplace REQUIRES:
-Personalized content and services for their customers
-Collaborative planning with design partners, distributors, and suppliers
-Real-time commitments for design, production, inventory, and transportation capacity
-Flexible logistics options to ensure timely fulfillment
-Order tracking & reporting across multiple vendors and carriers.
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