Supply Chain Management

Essay by geo5 January 2009

download word file, 4 pages 3.0

DiscussionNow that businesses have entered the 21st century, competition between companies is becoming fiercer. That is why, a business organization must have a top strategic plan in order to win the market. One strategy of the company to elevate itself from its foes would be supply chain management.

Supply chain can be interrelated to a value chain. It is an entire process that provides value to the raw materials in producing the finished goods or service. In an operations management perspective, the role of a business organization is to transform raw materials into finished goods. The finished goods must have more value in order to gain profit. A supply chain is thus considered as a web of interrelated processes, departments and processes to be able to transform raw materials into finished goods and deliver these to customers (Russell 2000). It involves all of the functions, activities and facilities that are included in producing a product from the supplier, brokerage, handling in of stocks to the warehouse, storage, delivery of the stocks, after sales management and inventory stock level monitoring.

Because supply chain involves almost all functional unit of the business, its design must be lean and must be part of its strategy. One of the most known and important goal of supply chain management include on-time delivery of goods, healthy inventory levels and zero inventory management.

These key performance indicators of supply chain would help the business in satisfying customer needs as well as maintaining the capital and operational expenditure of the business through its accurate forecasting in order to minimize or even eradicate the obsolescence costs of inventories. For example, mobile handsets are with short life cycle. Incorrect forecast and over production will result to high inventories which the company will not be able to sell. Because of the...