General Motors

General Motors: Procurement and Supply Chain Management

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General Motors: Procurement and Supply Chain Management

In 1994, Supply chain management was defined as “the integration of business processes starting with the end-user to the original suppliers that provide information, services, products, and add value for customers”, by the International Centre for Competitive Excellence members. Another definition is that, “Supply chain management may be a technique for linking the manufacturer’s operations with operations of its key intermediaries, strategic suppliers and customers. It seeks to join together the operations and relationships of both immediate, 1st-tier suppliers and the several tiers on the flipside of the chain supply. The main goal of supply chain management may be to improve timing and a large amount of costs in manufacturing, through well-built relationships with vendors”, (Hutt and Speh, 1998). According to Fuller, O’Connor and Rawlinson, supply chain management may be based on relationships (Fuller, O’Connor and Rawlinson, 1993). Cooper suggests that the scope of the supply chain may be defined by the number engaged within the supply chain and functions and activities involved. At first, the supply chain scope was across firms; however, it now includes internal integration in organizations prior to expansion to other firms (Walters, 2002).

The “supply chain” as an organizational structure offers General motors numerous potential advantages and disadvantages. In the course of using an effective supply chain management, the company may potentially experience many benefits other than cost reduction because of using the supply chain concept in organizing their “inter-company” operations. This opportunity may be becoming a reality with improvements in the management of information technology. In moving towards the supply chain, many steps have been undertaken in the manner that companies compete. The increasing importance of...