Meeting the requirements of the end consumers

• Meeting the requirements of the end-consumers requires the supply
chain to achieve appropriate levels of the five operations performance
objectives: quality, speed, dependability, flexibility and cost.
o Quality – achieve high quality for the end-consumer.
o Speed – how fast customers can be served is an important element
in any business’s ability to compete. It is the time taken for goods
and services to move through the chain.
o Dependability – dependability or throughput time is a much more
desirable aim because it reduces uncertainty within the chain.
o Flexibility – the chain’s ability to cope with changes and
disturbances, supply chain agility.
o Cost – e.g. transportation costs within the chain. Try to minimize
transaction costs.
• Choosing appropriate suppliers should involve trading off alternative
attributes. The best way might be to adopt some king of supplier ‘scoring’
or assessment procedure.
• An important decision facing most purchasing managers is whether to
source each individual product or service from one or more than one
supplier, known, respectively, as single-sourcing and multi-sourcing.
• E-procurement is the generic term used to describe the use of electronic
methods in every stage of the purchasing process on the Internet.
• One of the major supply chain developments of recent years has been the
expansion in the proportion of products and (occasionally) services
which businesses are willing to source form outside their home country;
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this is called global sourcing. Global sourcing needs to be managed
carefully due to the increased distance. Risks of delays and hold0ups can
be far greater and negotiating with suppliers whose native language is
different from one’s own makes communication more difficult and can
lead to misunderstandings over contract terms. The formation of trading
blocs in different parts of the world has had the effect of lowering tariff
barriers.
• In supply chains dealing with tangible products, the products need to be
transported to customers. This is called physical distribution
management but is sometimes referred to as logistics or simply
distribution. Sometimes when goods are transported from A to B, the
truck needs to drive back empty. Avoiding this is referred to as back-
loading.
• Types of business/consumer relations:
• The very opposite of performing an operation in-house is to purchase
goods and services form outside in a ‘pure’ market fashion, often seeking
the ‘best’ supplier every tie it is necessary to purchase. An extreme form
of outsourcing operational activities is that of the virtual operation.