Introduction
Supply chain management (SCM) is the mixture of art and science that gets channeled into enhancing the way a company can find the raw components it requires to make a product or service and then deliver it to customers. The process contains five components: planning, sourcing, making, delivering, returning.
What are three major attractions of careers in supply management?
There are three main and basic careers that can be found in the supply management process
- Process Engineer
Process engineers usually analyze processes within a corporate entity and then develop improved processes that are able to make better and safer use of labor, energy, materials, and other resources.
- Supply Chain Analyst
The analyst usually gives support to the supply chain manager through no specific number of activities, for example, and including, articulating and defining business processes.
- Supply Chain Systems Manager
Supply chain systems managers provide support to logistics and supply chain operations via management and oversight of software systems such as i2, Baan, SAP, and Oracle. Describe seven ways in which supply management has an impact on a firm’s cost
The Supply chain affects a firms costs in the following manner:
- fluctuations in supply chain expenditure directly affects inventory costs;
- manufacturing costs reduced if a firm is retailer;
- transportation costs reduced if manufacturer;
- material/raw material holding costs reduced if retailer
- outsourcing to warehouses depending to the amount of supply
- The cost of hiring extra labor with an increase in supply
- the cost of employing extra capital affected
Why are many organizations using a hybrid approach to decision making authority in their supply management?
The Purchasing function plays a significant role in the Supply Management process. It covers the sourcing end of the supply chain interfacing with the delivery side of the suppliers. The main aspect of the purchasing function that may as well affect the entire supply chains long term competitive capabilities is the selection of suppliers; hence the righteousness and quality of supplier must meet the standard set out by the company .
In an organization which has more than one business units, different business units often sell products which differ from one another. Since purchases are the only variable cost that affects the department directly, hence the profit center managers may as well insist on having the control of purchasing directly in their hands. This has resulted in organizations adopting a hybrid organizational structure, where the supply function is partially centralized to the C-level employees and partially decentralized to the business units .
Why does support for strategic supply chain management have to come from the top management of an organization? Why is supply managements position in the corporation organizational structure important?
Sometimes different aspects within the supply chain often have completely different, conflicting objectives. For example, suppliers generally need manufacturers to commit themselves to buying large quantities in stable volumes with flexible deliveries. Sadly, though most manufacturers would really prefer to implement long production runs, they have to be flexible to their customers’ orders and ever-changing demands. Thus, the suppliers’ goals are in direct conflict with the manufacturers’ need for flexibility. Indeed, since production choices are generally created without precise information regarding client demand, the ability of manufacturers to match supply and demand depends for the most part on their ability to alter supply volume as information concerning demand arrives. In much the same way, the manufacturers’ objective of creating massive production batches usually conflicts with the objectives of both, warehouses and distribution centers to cut back inventory. To make matters worse, this latter objective of reducing inventory levels usually implies a rise in transportation prices .
Why is supply management’s position in the corporation organizational structure important?
The landscape has shifted in recent years. The industry has recognized that trends, including outsourcing, off-shoring, and lean manufacturing. As a result, over the past many years, progressive firms have begun to concentrate on strategies that find the proper balance between cost reduction and risk management .
Identify some ways in which cross-functional teams could be useful in developing new products or completing values analysis functions
A number of approaches are applied by industry to manage risk in their supply chains. The cross functional teams emerging today are credited for value analysis in maintaing the supply chain effectively at each end and ensuring a successful process.
• Incorporating flexibility into supply contracts to better match supply and demand.
• improving supply chain processes by the inclusion of risk assessment measures.
How can engineering product specification affect the price of the product? How can a product that cost most save the company money overall? How can changes in the environment affect the products you buy?
An engineering product is such that rapid advancement in technology makes the older version obsolete too quickly. Therefore during the supply chain process it is important to control inventory that the right specification is ordered at the right time to ensure that it hits the market on time and not be outdated till its launch. In this case price of the product is increased to ensure quick response to demand.
A product that cost most may be able to save the company more as it may able to establish competitive edge or monopoly in the market, thus saving more. Since it will be costlier to produce, barrier to entry in the product will be more and less completion will exist in the market.
Changes in environment affect products that consumers buy. A PESTLE environment determines the demand and supply of a specific good and hence the consumer buying trend is identified.
Works Cited
Benton, W.C., 2013. Purchasing and Supply Chain Management. 3rd ed.
Leenders, M.R., Leenders, Flynn, A. & Johnson, P.F., 2010. Hybrid Supply Structure. In Purchasing And Supply Management. p.38.
Lu, D.D., 2011. Purchasing and Supplier Selection. In Fundamentals of Supply Chain Managment. pp.83-84.
Wailgum, T., 2008. Supply Chain Management Definition and Solutions. CIO.
Wetfeet, 2012. Career Overview: Supply Chain Management.
