Supply Chain Management Definition and Solutions

Mos t c ompanies have to s ell outs iders on the s y

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Unformatted text preview: c turers or retailers (i.e. W alMart) c an forc e s uc h radic al c hanges down s uppliers ' and partners ' throats . Mos t c ompanies have to s ell outs iders on the s y s tem. Moreover, one c ompany 's goals in ins talling the s y s tem may be threatening to their s uppliers , to s ay the leas t. For ex ample, W al-Mart's c ollaboration with P&G meant that P&G would as s ume more res pons ibility for inventory management, s omething retailers have traditionally done on their own. W al-Mart had the c lout to demand this from P&G, but it als o gave P&G s omething in return—better information about W al-Mart's produc t demand, whic h helped P&G manufac ture its produc ts more effic iently . In order for a c ompany to get its s upply c hain partners to agree to c ollaborate, bus ines s leaders and s upplier relations managers have to be willing to c ompromis e and help partners ac hieve their own goals . Internal res is tanc e to c hange. http://www.cio.com/ar ticle/pr int/40940 4/7 1/28/2014 Supply Chain M anag ement Definition and Solutions If s elling s upply c hain s y s tems is diffic ult on the outs ide, it is n't muc h eas ier ins ide. Operations people are ac c us tomed to dealing with phone c alls , fax es , s preads heets or hunc hes s c rawled on paper, and will mos t lik ely want to k eep it that way . If management c an't c onvinc e front-line operations people that us ing the s oftware will be worth their time, they will eas ily find way s to work around it. Senior ex ec utives c annot dis c onnec t the telephones and fax mac hines jus t bec aus e they have s upply c hain s oftware in plac e. Many mis tak es at firs t. There is a diabolic al twis t to the ques t for s upply c hain s oftware ac c eptanc e among employ ees . New s upply c hain s y s tems proc es s data as they are programmed to do, but the tec hnology c annot abs orb a c ompany 's his tory and proc es s es in the firs t few months after an implementation. Forec as ters and planners need to unders tand that the firs t bits of information they get from a s y s tem might need s ome tweak ing. If they are not warned about the s y s tem's initial naiveté, they will think it is us eles s . In one c as e, jus t before a large automotive indus try s upplier ins talled a new s upply c hain forec as ting applic ation to predic t demand for a produc t, an automak er put in an order for an unus ually large number of units . The s y s tem res ponded by predic ting huge demand for the produc t bas ed largely on one unus ual order. Blindly following the s y s tem's numbers c ould have led to inac c urate orders for materials being s ent to s uppliers within the c hain. The c ompany c aught the problem but only after a demand forec as ter threw out the s y s tem's numbers and us ed his own. That c reated another problem: Forec as ters s topped trus ting the s y s tem and work ed s t...
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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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