Supply Chain Management

SUPPLY CHAIN MANAGEMENT & MARKETING

08

Fall

Assignment # 11: “Chapter Summary Questions”

1. Characterize the critical aspects of an effective supply chain for any business.

-Supply Chain Management, which often confused with logistics, is the lifeline of an economy dependent upon the stream of manufactured goods. A product as simple as a pet rock requires layers of resources, pipeline management, benchmarks, budgetary concerns and delivery strategies. In the last two decades Supply Chain Management has become a science with tools, stratagems, processes and experts at the helm known as Supply Chain Managers. Like science, approaches differ however there are truisms which can be stated as key points or pillars for which the “Discipline” of Supply Chain Management. To define these pillars the example of bottled water will be used. The pipeline:

a. Purchasing—the importance of and development of the vendor-customer relationship

i. Strategies around the attainment resources have become a closely guarded aspect of any manufacturers SCM plan. Managers understand the lower the expenses on materials and production costs the higher the profit. This can create precarious relationships with suppliers as companies will endeavor to create established, often exclusive, relationships with suppliers. Two strategies are commonly used exercising the 80/20 principle – many suppliers so as to diversify your sources supply high demand and few suppliers so as to secure flat rates, low costs and consistency.

ii. In order to manufacture a bottle of water several components must come together flawlessly, and a low cost, such as: plastic for the bottle, labeling, trucking and shipping costs, water filtration processes, marketing and retail relationships as well as preparedness for damaged and lost merchandise.

b. Inventory Management – managing the stock of items that support production and customer service

iii....