Supply Chain Management

6.Strength & Weakness of Supply chain Management in SMI

SMI seems to have strength in supply chain management as it uses electronic system in managing inventories. There are plenty of benefits for using electronic system. By using electronic system in managing inventories, SMI could improve competitiveness and quality of the product, reduce response time, save cost, and provide easy access to the product for customers. Secondly, SMI is having good relationship with its suppliers. Having good partnership in supply chain management is very important. It could lead to increase in productivity and quality improvement. For example, a Japanese motor company Honda is known for maintaining good relationship with its suppliers. A research firm in US called ‘Planning perspective’ have conducted a survey on ‘Firms to work with most’ and top ranking company turned out to be Honda and Toyota on 17 questions. The suppliers answered that Honda is a firm which communicates well with suppliers and cares a lot about supplier’s revenue , They also said that Honda is the most reliable company among others. As to the good relationship with suppliers, Honda’s productivity is higher than other company. USA Big 3 took 2-3 years to design a new car concept. However Honda took only 12-18 months to design the concept due to the good, tight relationship with its suppliers. Also Honda recorded less amount of cars recalled in USA than GM, Ford, and Chrysler. According to a study held by J.D Power Associates, Honda ranked high in durability and quality parts despite of putting less amount of money in producing Accord model. Then , how did Honda maintain good relationship with its work partners? First Honda tried to understand the suppliers’ work system because Honda’s managers thought that they have to know a lot about their partners in order to make good partnership. Next, Honda sent managers to the supplying firm to watch the process and take care of the whole production. Honda also...