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Supply Chain Management Systems (Benefits of an integrated network of…
Supply Chain Management Systems
definition
It manages the flow of goods and services, the movement and storage of raw materials, work-in-process inventory, and distributing the finished product to customers.
It includes all of the internal functions like suppliers, distributors, retailers and customers.
factors
to consider to provide more accurate information and reduce uncertainty in business:
Bullwip Effect
Occurs when changes in consumer demand.
Ordered more goods to meet the new demand -> inaccurate information -> excess inventory for the retailer, wholesaler, distributor, manufacturer and suppliers.
Safety Stock:
An additional quantity of item to reduce risk that the item will be out of stock.
To protect against variation in supply or demand.
To prevent disruptions in manufacturing or customer deliveries.
To provide a required customer service level.
Just-In-Time:
Goods or services will arrive on time
Organization strategy to increase efficiency and to reduce inventory costs.
Software
Software tool or module, used to:
Execute supply chain transactions
Manage supplier relationship
Control business process
Helps business to:
Plan
Execute
Make better decision
System
Provide information up and down the chain where the organization can:
Generate forecast
Share information
Manage
coordinate
Distinct Groups
Upstream
: suppliers deal directly with a manufacturer and their suppliers.
Downstream
: Distributors and those that deliver products to customers
Internal
: The employees that transform materials, components and services into the actual products
Benefits
of an integrated network of supply chain management system:
Match supply to demand
Reduce inventory levels
Improve delivery service
Speed product time to market
Use assets more effectively
Improve relationship with its customers
Sell more products
Improve customer service
Reduce cost
Increase sales
Improve cash management