Supply Chain Management Definition and Solutions

Before the internet c ame along the as pirations of s

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Unformatted text preview: y chain manage me nt software ? Before the Internet c ame along, the as pirations of s upply c hain s oftware devotees were limited to improving their ability to predic t demand from c us tomers and mak e their own s upply c hains run more s moothly . But the c heap, ubiquitous nature of the Internet, along with its s imple, univers ally ac c epted c ommunic ation s tandards , have thrown things wide open. Now, c ompanies c an c onnec t their s upply c hain with the s upply c hains of their s uppliers and c us tomers together in a s ingle vas t network that optimiz es c os ts and opportunities for every one involved. This was the reas on for the B2B ex plos ion; the idea that every one a c ompany does bus ines s with c ould be c onnec ted together into one big happy , c ooperative family . Of c ours e, reality is n't quite that happy and c ooperative. But today mos t c ompanies s hare at leas t s ome data with their s upply c hain partners . The goal of thes e projec ts is greater s upply c hain vis ibility . The s upply c hain in mos t indus tries is lik e a big c ard game: the play ers don't want to s how their c ards bec aus e they don't trus t any one els e with the information, but if they s howed their hands they c ould all benefit. Suppliers wouldn't have to gues s how many raw materials to order, and manufac turers wouldn't have to order more than they need from s uppliers to mak e s ure they have enough on hand if demand for their produc ts unex pec tedly inc reas es . And retailers would have fewer empty s helves if they s hared the information they had about s ales of a manufac turer's produc t in all their s tores with the manufac turer. The Internet mak es s howing y our hand to others pos s ible, but c enturies of dis trus t and lac k of c oordination within indus tries mak e it diffic ult. During the las t few y ears mos t c ompanies have gotten over the trus t is s ue. In many c as es "gotten over" is a euphemis m for "have been bullied into s haring s upply c hain information from a dominant indus try play er." W ant to s ell y our goods in W al-Mart? Better be prepared to s hare data and adhere to W al ticle/pr int/40940 3/7 1/28/2014 Supply Chain M anag ement Definition and Solutions Mart's data-ex c hange s tandards . (For more on this topic , s ee "How W al-Mart Los t Its Tec hnology Edge.") The pay off of timely and ac c urate s upply c hain information is the ability to mak e or s hip only as muc h of a produc t as there is a mark et for. This is the prac tic e k nown as jus t-in-time manufac turing, and it allows c ompanies to reduc e the amount of inventory that they k eep. This c an c ut c os ts s ubs tantially , s inc e y ou no longer need to pay to produc e and s tore ex c es s goods . But many c ompanies and their s upply c hain partners have a long way to go before tha...
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This note was uploaded on 02/03/2014 for the course BADM 350 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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