CHAPTER 10 EXTENDING THE ORGANIZATION ( SUPPLY CHAIN MANAGEMENT )

CHAPTER 10 : Extending the Organization – Supply Chain Management

1.      List and describe the components of a typical supply chain.

The components of a typical supply chain are Supplier’s supplier, Supplier, Manufacturer, Distributor, Retailer, Customer and Customer’s customer.

2.      Define the relationship between decision making and supply chain management

The relationship between decision making and supply chain management is SCM enhances decision making. SCM systems helps all the different entities in the supply chain to work together and be more effectively in collecting, analyzing, and distributing transactional information to all relevant parties. Other than that, SCM system also provides dynamic holistic views of organization. Users can “drill down” into detailed analyses of supply chain activities in a process analogous. Without SCM systems, organizations would be unable to make accurate and timely decisions regarding their supply chain.

3.      Describe the four changes resulting from advances in IT that are driving supply chains.

The four changes resulting from advances in IT that are driving supply chains are visibility, consumer behavior, competition and speed.

        Visibility is the ability to view all areas up and down the supply chain. Changing supply chains requires a comprehensive strategy buoyed by information technology.

        Next, consumer behavior has changed the way business competes. Customers will leave if a company does not continually meet their expectations. They are more demanding because they have information readily available they know exactly what they want and they know when and how they want it.

        Competition is use advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. Supply Chain Planning (SCP) depends entirely on information for its accuracy.

       Lastly, speed is the system that raises the accuracy between internal users. Other than that, speed also satisfied continually changing customer requirement efficiency accurately and quickly.

4.      Summarize the best practice for implementing a successful supply chain management system.

Organization should study the best practice for implementing a successful supply chain management system.

There are five SCM industry best practices. First is make the sale to supplier. This practices is the hardest and complicated part of any SCM because not only people in the organization need to changes the way they work but also the people from each supplier that is added to the network must change.

Next is wean employees off traditional business practices. Operations people typical deal with phone call, faxes and order scrawled on paper and will most likely want to keep it that way. If the organization cannot convince people that using the SCM software is worthwhile, the employees will probably find a way around using the software. 

Other than that, ensure the SCM system supports the organizational goals. It is important to select SCM software that gives organization an advantage in the areas most crucial to their business success.

Plus, deploy in incremental phases and measure and communicate success. For instance, instead of installing a complete supply chain management system across the company and all suppliers at once start by getting it working with a few key suppliers.

Lastly is be future oriented. The supply chain design must anticipate the future state of the business because SCM system likely will last for many more years than originally planned. So manager need to explore how flexible the system will be when changes are required in the future.