Strategic Supply Chain Management
Strategic Supply Chain Management
Introduction
Supply chain management operates at three levels; strategic, tactical and operational. At the strategic level, company management makes high level strategic supply chain decisions that are relevant to whole organization. The decisions that are made with regards to the supply chain should reflect the overall corporate strategy that the organization is following.
The strategic supply chain processes that management has to decide upon will cover the breadth of the supply chain. These include product development, customers, manufacturing, vendors and logistics.
Product Development
Senior Management has to define a strategic direction when considering the products that the company should manufacture and offer to their customers. As product cycles mature or products sales decline, management has to make strategic decisions to develop and introduce new versions of existing products into the marketplace, rationalize the current product offering or whether develop a new range of products and services. These strategic decisions may include the need to acquire another company or sell existing businesses. However, when making these strategic product development decisions, the overall objectives of the firm should be the determining factor.
Customers
At the strategic level, a company has to identify the customers for its products and services. When company management makes strategic decisions on the products to manufacture, they need to then identify the key customer segments where company marketing and advertising will be targeted. Read more
Lean Supply Chain Management
ntroduction
Lean supply chain management is not exclusively for those companies who manufacture products, but by businesses who want to streamline their processes by eliminating waste and non-value added activities. Companies have a number of areas in their supply chain where waste can be identified as time, costs or inventory. To create a leaner supply chain companies must examine each area of the supply chain.
Procurement
Many businesses have complex purchasing operations. Large companies often have corporate purchasing groups as well as local purchasing. This can lead to vendors being given multiple contracts leading to variations in prices depending on location. Companies that practice lean supply chain management reduce their procurement function so that each vendor has one point of contact, one contract and offers one price for all locations. Businesses are looking to new technologies to assist them in improving procurement processes. These include internet based purchasing that allows requisitioners to purchase items from vendor’s catalogs containing company wide contract prices. Changes in payment options to vendors can also streamline processes. Companies that use a two-way match, which is payment on receipt rather than payment on invoice, will reduce resources in their purchasing department as well as improve supplier relationships. Read more
Best Practices in Green Supply Chain Management
Best Practices in Green Supply Chain Management
Introduction
The trend towards developing a green supply chain is now gaining popularity but most companies are still coming to terms with how this can be achieved and where do they start. For years businesses have been concentrating on improving supply chain visibility, refining efficiency and minimizing cost. Despite the focus being moving towards a green supply chain the goals of visibility, efficiency and cost reduction do not have to be discarded. By examining the companies who have already made strives towards to a green supply chain, we can begin to see some best practices that will help others to begin their own transition.
Align Your Green Supply Chain Goals with Business Goals
Creating a green supply chain that has little to do with your business will not help your company to achieve its business objectives. For example, if a company decides to use biodegradable packaging for its products that costs 25% more than traditional packaging, this goes against the businesses goals of reducing costs. If a business has an overall goal to reduce costs then the move to a green supply chain should dovetail with the business goal. A company should look at its overall business goals and identify how a transition to a green supply chain can help achieve those goals. For example if a business wants to reduce its energy costs it should start by looking at the consumption to see if a reduction can be made by using more energy efficient and greener equipment.
Use Green Supply Chain to Improve Processes
Companies do not often change their businesses processes and it is this attitude allows inefficient processes to continue unabated causing unnecessary waste and pollution. For example ineffective processes in the US automotive industry allowed the innovative Japanese automakers to become market leaders. Businesses that want to transition to a green supply chain should take the opportunity to review all their business processes to identify areas where adopting a greener outlook can actually improve their business. Companies should review each process along the supply chain to identify if a more environmentally sound approach will help cure the inefficiencies that occur. Many companies that have been through this exercise have identified processes where raw materials were wasted; resources underutilized and unnecessary energy used due to inefficient equipment. Read more