scm notes 1 to 5

scm notes 1 to 5 - WEEK ONE Lambert et al (1998): SCM is...

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WEEK ONE Lambert et al (1998): SCM is “the integration of business processes from end user through original suppliers that provide products, services and information that add value for customers” Chapter One – The Supply Challenge AHP: Analytical Hierarchical Processing, a technique used to select and evaluate suppliers. The importance of purchasing to an organisation, cannot be overstated, however two distinct arguments have emerged for the reasons behind its importance Economic View: Making savings on purchases is one of the most plausible methods to improve the bottom line, as increasing sales or decreasing labour costs can be impossible. However, in reality given the politics and complexities of budget management, purchasing savings rarely have direct effect on bottom line. Strategic View: In 1990s all mainstream consultancies considered supply chain management as a key growth area. Now, supply is considered a key strategic issue and inclusive of many elements, including relationship management. Some supply strategies are considered facilitators of success, such as outsourcing etc. Supply Management is a dynamic strategic process, not simply a business function. Each element on the supply wheel must be integrated to achieve success. Lecture Summary A physically efficient process suits functional products A market responsive process suits innovative products Types of Supply Chains 1. Build-to-Stock BTS 2. Customise-to-Order CTO 3. Build-to-Order BTO 4. Engineer-to-Design ETD Components of Supply Chain Management Procurement Operations Logistics Reverse Logistics Trends in Supply Chain Management Greater Complexity From push to pull Environmental and Ethical Sourcing Technological Change SCM becoming separate from purchasing? Reading: Niezen et al (2007) Supply Managers are expected to improve product quality, reduce cycle time (or time-to- market) and increase the rate of innovation at the lowest possible cost, no matter how unpredictable demand is. Successful managers constantly search for alternative sourcing methods, such as in-sourcing, carry out continual analysis of current and potential suppliers, and current and future trends in the industry. They are expected to deliver year-on-year cost savings. Procurement is often viewed as innovation; up to 80% of total product costs can be allocated to design. Suppliers are not chosen based on price alone; speed, quality, flexibility and reliability are also considered. They can be used to source knowledge or creative, required for new product development.
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At successful firms, the cross functionality of supply management is appreciated and supply managers often lead cross functional teams. This is reflected in supply management’s performance being measured, not with cost saving alone but by shareholder value added. WEEK TWO
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This note was uploaded on 02/25/2012 for the course MGMT 4375 taught by Professor Eixmann during the Fall '11 term at Texas State.

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scm notes 1 to 5 - WEEK ONE Lambert et al (1998): SCM is...

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