SUPPLY CHAIN MANAGEMENT

Supply Chain Management

Supply Chain Management

Introduction

Supply Chain Management

A relatively new management process that had great momentum in the past decade and generates significant cost reductions by allowing companies greater competitiveness and higher profits. In the new millennium, competition occurs between supply chains rather than between individual companies. The management of the supply chain revolves around the efficient integration of suppliers, manufacturers, distributors, and retailers in this way is achieved substantially reduce costs and at the same time improve customer service levels. The management of the supply chain covers the following areas: network logistics, warehousing, inventory management, purchasing, strategic alliance, information technology and telecommunications as key elements in communications and decision making. Companies that want to succeed need to streamline their processes in all areas.

High levels of competition in the international markets have led companies to the conclusion that to survive and be successful in aggressive environments, it is not enough to improve their operations and integrate their functions internally, but it is necessary to go beyond the boundaries of the company and initiate exchange relations, information, materials and resources with suppliers and customers in a much more integrated manner. For this, companies have to use innovative approaches that benefit all stakeholders together in the supply chain. One of the most important aspects of supply chain is the buying decision for the company. It is considered that the internal factors influence a company to have the procurement.

The transformation of the sellers' market to a buyer's market is complete in almost all industries. The offer is greater by far than the demand; the buyer can hardly distinguish the product properties and are becoming increasingly price sensitive. The companies responding to the situation in which they design the product life cycles get shorter or correct the prices down, whether price-skimming or short product life cycles are pursued as a strategy to ultimately decrease the piece proceeds. Thereof, the expected operating margins resulting subtracted the maximum allowable production. It must be looked for ways to represent this target cost.

Operation Strategy

Operational strategy has the simplest definition, where the organization needs to align the pattern of rules and the processes that could align all the basic components of the business operation in terms of production, distribution while maintaining the quality of the goods. Operations management must be inculcated into the organization for the sole purpose of managing all courses of action that prevail in cost-effective and timely execution of operations and smoothly running a business. Activities that come under the head of operations management include primary activities that cover the discipline of quality assurance (QA), environmental protection and responsibility, production, manufacturing, warehousing, inventory, supply chain, logistics, packaging, etc

Operation strategy is all those activities which are directly related to the transformation of the materials, customers or the information. It also includes the outcome of the manufacturing goods, and the distribution services from the organization to the external suppliers (David, 2009, pp. 121-254). Similarly the operation strategy has a vision on which it works on ...