Supply Chaing Notes.docx

Supply Chaing Notes.docx - Lesson One Vertically integrated...

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Lesson One Vertically integrated firm - a firm whose business boundaries include former suppliers and/or customers - is quite difficult. Consequently, firms are selling off many business units and otherwise paring down their organization to focus more on core capabilities, while trying to create alliances or strategic partnerships with suppliers, warehousing companies, and distributors. A supply chain consists of the flow of products and services from: Raw materials manufacturers Component and intermediate manufacturers Final product manufacturers Wholesalers and distributors Retailers Thus, for supply chain management to be successful, firms must work together by sharing information on things like: Demand forecasts Production plans Capacity changes New marketing strategies New product and service developments New technologies employed Purchasing plans Delivery dates In theory, supply chains work as a cohesive, singularly competitive unit, accomplishing what many large, vertically integrated firms have tried and failed to accomplish. The difference is that independent firms in a supply chain are relatively free to enter and leave supply chain relationships if these relationships are no longer proving beneficial. 2000s and Beyond ("External Integration") Supply chain management has evolved along two parallel paths: 1. The purchasing and supply management emphasis from industrial buyers. 2. The transportation and logistics emphasis from wholesalers and retailers.
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The rapid development of client/server supply chain management software that typically includes integrated supply chain management and electronic commerce components has aided in the evolution and adoption of supply chain management. Third-party logistics providers (3PLs) - A firm that provides service to its customers of outsourced (or "third party") logistics services for part, or all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customers' needs based on market conditions and the demands and delivery service requirements for their products and materials There are four important elements of Supply Chain Management . They include: 1. Purchasing/Supply Elements - Will result in clearly identifying key partners to engage in this journey of on-going success and excellence, thereby resulting in a reduction of the supplier base. 2. Operations - Which will improve its efficiency and effectiveness resulting in: Improved customer service Quicker deliveries due to shorter lead times Reduction of inventory investments Improved overall quality of products & processes 3. Logistics - Will provide quicker and quality deliveries to all customers while insuring the policies and requirements of the organization and community are always addressed.
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