Logistics 490

TUI

LOG 490

Module 1 Case Assignment

Dr. Robert McGrath

SENIOR MANAGEMENT AND THE SUPPLY CHAIN

Supply chain management is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. Back in the early 1990s, managers of U.S. companies were justifiably proud of the well-oiled machines they'd made of their supply chains. Over the previous fifteen to twenty years, they'd wrung costs from the mechanisms and processes by which they got components and inputs to the right places at the right times. They'd done it by implementing techniques and technologies at an unprecedented pace. But more recent events such as terrorist strikes, political instability in Third World Countries, and the downward spiral the economy took have awakened managers as never before to supply chain risks, some of which had been introduced or heightened by the very actions companies had taken to drive costs out of their supply chains.

During the lucrative periods senior managers didn’t put much thought and energy in to supply chain management because of the success of the company. Most senior managers are concerned with the bottom line. As long as the company is making profits supply chain management might take a back seat in some senior managers’ minds.

Companies with complex, global supply chains have limited visibility across their supply chain, which makes performance monitoring and management difficult. Often, a decision taken by one business unit can have a significant impact on the performance of the entire supply chain and the company overall. The situation is even more challenging because it is usually difficult to get to the root of the problem due to multiple disconnects at department and geographic levels. Most companies have done a good job of establishing performance metrics at the operational and departmental level....