Introduction
Supply Chain Management (SCM) is a systematic integration of suppliers, Original Equipment Manufacturer (OEM), distributors and customers in order to produce and distribute the right quantities, to the right locations, at the right time, and at the cheaper cost, while satisfying the entire supply chain partners (Balsubramanium & Roosebelt). It is an approach that involves a multi-organizational system, which encompasses the procurement of raw materials, conversion of raw materials to finished goods, and distribution of finished goods to the end users smoothly, by sharing required information throughout the supply chain. Recent supply chain practices dictates zero stock level of inventories at all stages of supply chain. A well-managed supply chain links the suppliers, OEM, distributors and customers by a suitable information system for controlling and coordinating the supply and distribution flow of services, products, and related information across boarder in order to achieve optimum productivity, overall satisfaction and joyful relation at cheaper cost. Hence, movement of materials and information flow must move parallel to have effective control over the whole system of supply chain. The success of supply chain ultimately depend upon the capacity of the supply chain partners to respond as quickly as possible to the demand, through a reliable information bridge, which connects the whole chain. Thus the faster information plays an important role for managing the pull based equipment supply process throughout the chain. The very philosophy of supply chain is based on the coordinated information and smooth material flow (Lee and Billington, 1993). According to Chandra and Chilove (2001) various supply chain members, maintain synchronized coordination through commitments amongst its members, which leads to reduction of lead time, reduction in cost, mutually agreed decision making process and enhance the productivity of each member, which ultimately enhance the performance of whole network. For achieving this mutually beneficial coordination with a suitable and dedicated information system is essentially required. Quick and effective information system helps manager to understand the customers response, their demands, inventory in the stock, how much to be produced, when to be produced and where to deliver and when, within no time. Here comes the role of Internet, which is considered as a cheapest inter-organizational information-system, which helps in aligning the interdependent strategies to achieve cooperative rather than competitive role of SCM partners.
Supply Chain is shown, in which goods flow starts from tier-II supplier and ends with products at final customer. Tier-II supplier keeps inventory of raw material at the starts of the production and an inventory of component at the end. Tier-I supplier gets supply of components from Tier-II supplier, keeps inventory of component at the start of the production and an inventory of sub-assembly at the end. Original Equipment Manufacturer (OEM) gets sub-assembly from Tier-I supplier, keeps inventory of sub-assembly at the start of the production and an inventory of final product at the end. Similarly at further stages of supply chain i.e. at OEM’s warehouse, distributor’s warehouse and retailer’s warehouse also inventory is maintained and finally supply is made to the customer on demand. But it is also shown that all the stages of supply chain are connected with Internet with each other. Hence, information can flow from any stage to every stage within seconds. If ordered goods can also be supplied from any stage to every stage on demand. For example, Sundram fasteners supplies to brakes India, Brakes India supplies to Maruti car manufacturer, Maruti car co. supplies to the warehouse, from warehouse car moves to distributors and from distributors to customers. At the same time any stage can get supply from all stages on demand because inventory is maintained at all the stages. Here information and goods move parallel from one stage to the another stage. Since, computers at all the stages are connected with network of Internet, the overall management of material flow, types of transportation, distance, lot size, lead-time, storage system at the shop floor, timeliness, reliability of system, order volume, number of suppliers, system of transportation, payment schedule, vendor selection etc., can be optimized with mutual cooperation. Optimization reduces cost and improves services, which results in customer satisfaction.
Supply Chain Management (SCM) is a systematic integration of suppliers, Original Equipment Manufacturer (OEM), distributors and customers in order to produce and distribute the right quantities, to the right locations, at the right time, and at the cheaper cost, while satisfying the entire supply chain partners (Balsubramanium & Roosebelt). It is an approach that involves a multi-organizational system, which encompasses the procurement of raw materials, conversion of raw materials to finished goods, and distribution of finished goods to the end users smoothly, by sharing required information throughout the supply chain. Recent supply chain practices dictates zero stock level of inventories at all stages of supply chain. A well-managed supply chain links the suppliers, OEM, distributors and customers by a suitable information system for controlling and coordinating the supply and distribution flow of services, products, and related information across boarder in order to achieve optimum productivity, overall satisfaction and joyful relation at cheaper cost. Hence, movement of materials and information flow must move parallel to have effective control over the whole system of supply chain. The success of supply chain ultimately depend upon the capacity of the supply chain partners to respond as quickly as possible to the demand, through a reliable information bridge, which connects the whole chain. Thus the faster information plays an important role for managing the pull based equipment supply process throughout the chain. The very philosophy of supply chain is based on the coordinated information and smooth material flow (Lee and Billington, 1993). According to Chandra and Chilove (2001) various supply chain members, maintain synchronized coordination through commitments amongst its members, which leads to reduction of lead time, reduction in cost, mutually agreed decision making process and enhance the productivity of each member, which ultimately enhance the performance of whole network. For achieving this mutually beneficial coordination with a suitable and dedicated information system is essentially required. Quick and effective information system helps manager to understand the customers response, their demands, inventory in the stock, how much to be produced, when to be produced and where to deliver and when, within no time. Here comes the role of Internet, which is considered as a cheapest inter-organizational information-system, which helps in aligning the interdependent strategies to achieve cooperative rather than competitive role of SCM partners.
Supply Chain is shown, in which goods flow starts from tier-II supplier and ends with products at final customer. Tier-II supplier keeps inventory of raw material at the starts of the production and an inventory of component at the end. Tier-I supplier gets supply of components from Tier-II supplier, keeps inventory of component at the start of the production and an inventory of sub-assembly at the end. Original Equipment Manufacturer (OEM) gets sub-assembly from Tier-I supplier, keeps inventory of sub-assembly at the start of the production and an inventory of final product at the end. Similarly at further stages of supply chain i.e. at OEM’s warehouse, distributor’s warehouse and retailer’s warehouse also inventory is maintained and finally supply is made to the customer on demand. But it is also shown that all the stages of supply chain are connected with Internet with each other. Hence, information can flow from any stage to every stage within seconds. If ordered goods can also be supplied from any stage to every stage on demand. For example, Sundram fasteners supplies to brakes India, Brakes India supplies to Maruti car manufacturer, Maruti car co. supplies to the warehouse, from warehouse car moves to distributors and from distributors to customers. At the same time any stage can get supply from all stages on demand because inventory is maintained at all the stages. Here information and goods move parallel from one stage to the another stage. Since, computers at all the stages are connected with network of Internet, the overall management of material flow, types of transportation, distance, lot size, lead-time, storage system at the shop floor, timeliness, reliability of system, order volume, number of suppliers, system of transportation, payment schedule, vendor selection etc., can be optimized with mutual cooperation. Optimization reduces cost and improves services, which results in customer satisfaction.
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Using Supply Chain Management to Improve Profits
Its quite interesting to read about supply chain management,after going through the article,got to learn it is quite a responsible job,a company is soully dependent on this department -"Supply Chain management",well i must say its quite informative which will give some idea about the subject the supply chain management and help others to share their views on the same and learn more....so will be waiting to read more about such new articles and subjects.
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