Patricia Mae D. Perez Distribution Management 5. Major concepts related with supply chain A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the difficulty of the chain may vary greatly from industry to industry and firm to firm. It is a dynamic system that evolves over time.
Indeed, not only do customer demand and supplier capabilities change over time, but supply chain relationships also evolve overtime. For example, as the customer’s power increases, there is increased pressure placed on manufacturers and suppliers to produce an enormous variety of high- quality products and to produced customized products. Characteristic of supply chain management There are numbers of characteristics of supply chain. The most important is that the firms understand that their future depends to al arge level on the success of channel and they involved themselves as part of the channel.
Relationships are viewed as long term, and the corporate cultures, philosophies, and missions are similar. There is joint planning of products, locations, and quantities of inventory to be kept in the system. Great deal information sharing between firms in order to coordinate the efficient flow of goods. The modern computing and communication technology, such as electronic data interchange, is used to rapidly provide information within the channel as needed. Cost advantages are exploited wherever possible. Other characteristics are: Competing goals and objectives Cost reduction and on time delivery of goods
Dynamic operating conditions Emphasis on responsiveness to design changes Process of supply chain management The planning process needs to account for demand and cost parameters varying over time due to the impact of seasonal fluctuations, trends, advertising and promotions, competitor’s pricing and strategies. The process is made up of the flow of materials, flow of information and services and monitoring the control of this flow, that includes raw materials procurement, production, inventory management, processing of orders, warehousing, transportation and distribution. Sources: http://www. se. ufl. edu/Supplychain/done/Day2/Deshmukh/sld002. htm http://www. referenceforbusiness. com/encyclopedia/Str-The/Supply-Chain-Management. html http://lcm. csa. iisc. ernet. in/scm/supply_chain_intro. html 8. Key concepts related to customer service and performance measurements in the SCM function Four methods of developing customer strategy Stay in touch Show your customers how you value your business through keeping in touch with them by sending them updates about your company. Use newsletters, individual letters or emails to deliver new things and products and promotions of the company.
You can also send a thank you note if a customer made a major purchase and ask them for some feedbacks and suggestions. With all of this information you gathered from your customer, you can come up with solutions to the problems and meet their needs. Empower your staff There are some cases where there is no policy and the policy need to be flexed. To do this you have to empower certain people to make decisions, bend the rules and use wise judgments. Have them documented these special cases by providing a pad paper of forms and let them input some information to the computer.
You can also designate one person per shift as chief problem-solver. Manage customer relationships Once you have gathered information about your customer, you can identify them and give them rewards. You can offer the frequent customers discounts for their next purchase and make a follow up call to those customers who need repair work. Use the information gathered about the customer to make customer service a science. If you give them quality service and you satisfy them, they will continue going back to you. Make great service a priority
For you to serve your customers excellently, you have to train your staff. Because they are the one who faces and interact your customers not you. So train them very well. Always put in mind that customers must always comes first. Start with small things like greeting them politely and staff must courteously greet anyone who enters the shop. Relationship between customer service and inventory investment Improving the inventory is critical to customer service. despite of whether your company deals b2b or b2C, insufficient inventory management process will affect customer service and customer satisfaction levels.
A successful inventory management anticipates analyses, plans for, and delivers inventory standards which do not mix into customer service disaster. Not only focus on the correct inventory supply levels, but also the factors in the expertise of the personell who deal with inventory process. The relationship with the suppliers and distributors, as well as those who perform the maintenance functions, and the communication processes used to express the current and prospective requirements between both the suppliers, distributors and end users. Sources: http://marketing. about. com/od/relationshipmarketing/a/crmtopten. tm http://ezinearticles. com/? Improved-Inventory-Management-Processes—Critical-to-Customer-Service-Excellence&id=4148576 11. Impact of inventory management on operations Major operational benefits of lean manufacturing systems Lean manufacturing concepts were developed over the last five to six decades, primarily in Japan, particularly for the Toyota production system. These concepts met various tests for many many years and passed the test of time very easily. It is defined as an approach to help reduce waste and eliminate waste in the assemble line at the time of manufacturing the products.
By doing it right, it helps in reducing the cost and continuous improvement. It eliminates waste by means of identifying non-value added activities which leads to poor product quality in the production process that will not be able to meet the customer’s expectations in the market place Benefits of Lean Manufacturing are: Improvement in the delivery performance Less/ reduced lead times Increased in sales revenue Less operating costs and increased profits Improved customer satisfaction and supplier relations Reduction in inventory An increased in the employee moral and retention
Better quality Reduced warehouse space Creation of additional working capital for new projects Improvement in supplier relationship In lean manufacturing, the customers can be able to get what they want. With this, they get satisfied and it brings benefits for the employees as they are the very important in the manufacturing line. The system focuses on the improvement of the manufacturing line of the organizations. The companies have been able to eliminate and reduce the redundant and looping processes from the organizations. It has made things very easy for the organizations.
The tools used in the lean manufacturing can help the organization to find out different problems in the production. Organizational and process considerations involved in implementing lean systems There are other implementing lean manufacturing tools that an organization can use to get the improvements they want. There is the Value Streaming and Process Mapping. These two can effectively eliminate waste and in implementing lean manufacturing, they can streamline work processes. Value streaming is use to identify opportunities while process mapping use to identify specific waste and improvements.
Considerations: Strategic Flexibility unexpected problems arise to change any plan. Unforeseen opportunities also arise. This is where stragegits excel. The only sure thing is change. Tasks in the future are lesslikely to change than months away. The long term plan sets direction and budgets. The short term tracks specific tasls and accomplishments. Concentration “concentrate the maximum force in the smallest area” Beachhead Stragtegies focuses on small area or a product. All the essentials elements for a self reinforcing, sustainable system are deployed locally.
This can happen quickly. The small area become the beachhead of lean manufacturing The Kaizen Blitz is a focused implementation that suits a beachhead strategy. It has a strong appeal. It is fast, dramatic and effective. Source: http://www. strategosinc. com/mpping0. htm http://www. articlesbase. com/software-articles/10-benefits-of-lean-manufacturing-2475092. html http://www. altiusdirectory. com/Business/lean-manufacturing. html http://manufacturelean. com/lean-manufacturing-system/ http://www. leanmanufacturingsecrets. com/blog/2008/03/28/implementing-lean-manufacturing/ ttp://www. strategosinc. com/lean_implementation3. htm 7. Role of SCM and Logistics in the economy and the organization Total Quality Management is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. It looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance.
It takes into account all quality measures taken at all levels and involving all company employees. For this to work, everyone in the organization has to get involved. This theory is to work towards using the best processes to offer the best possible products and to produce best customer satisfaction. Supply Chain Management in the management of distribution across organizations. All the members of the channel, from suppliers to end users, coordinate their business activities and process to minimize their total costs and maximize their effectiveness in the market.
The goal is to achieve the coordination and continuity of a vertically integrated channel without centralized ownership of the entires comprising the channel. The firms form along term partenrshipin order to improve service to the ned consumer, reduce channel costs, and create competitive advantage. It has also developed other terms like Just In Time supply chain management. That is to say that a company tries to stock nothing ahead of time and its suppliers will provide what is needed just in time for production or shipping.
There are a lot of variables for a good supply chain management like the trustworthiness of suppliers, reliability of shippers, and planning contingencies for worse case scenarios. Still, business are still trying to figure how much they need to inventory and how much can be ordered as needed. There are some key characteristics of SCM. The most important of all is that the firms involved see themselves as part of the channel and understand that their future depends to large extent on the success of the whole channel.
The relationships are viewed as long term, and the corporate cultures, philosophies, and missions are similar. Just in time is a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. It also has been described as an approach with the objective of producing the right part in the right place at the right time. Waste results from any activity that adds cost without adding value, such as the unnecessary moving of materials, the accumulation of excess inventory, or the use of faulty production methods that create products requiring subsequent rework.
JIT should improve profits and return on investment by reducing inventory levels, reducing variability, improving product quality, reducing production and delivery lead times, and reducing other costs. In a JIT system, underutilized (excess) capacity is used instead of buffer inventories to hedge against problems that may arise. JIT applies primarily to repetitive manufacturing processes in which the same products and components are produced over and over again.
The general idea is to establish flow processes by linking work centers so that there is an even, balanced flow of materials throughout the entire production process, similar to that found in an assembly line. To accomplish this, an attempt is made to reach the goals of driving all inventory buffers toward zero and achieving the ideal lot size of one unit. Sources: http://logistics. about. com/od/qualityinthesupplychain/a/TQM. htm http://www. referenceforbusiness. com/encyclopedia/Str-The/Supply-Chain-Management. html http://www. thinkingmanagers. com/business-management/total-quality-management. hp http://personal. ashland. edu/~rjacobs/m503jit. html http://hubpages. com/hub/supply-chain-management-definition http://personal. ashland. edu/~rjacobs/m503jit. html 2. Organizational issues related to purchasing Purchasing is wherein all significant purchases are monitored for the right authorization of the right item, at the right price, quality and quantity, from the right supplier and terms. Objectives of purchasing 1. Procure the necessary quality and quantity of goods or services in an efficient, timely and cost effective manner, while maintaining the controls necessary for a corporation. . Encourage an open competitive bidding process practicable for the acquisition of goods and services and equitable treatment of all vendors. 3. Ensure the maximum value of an acquisition is obtained by determining the total cost of performing the intended function over the lifetime of the task. This may include, but not be limited to, acquisition cost, installation, disposal value and cot, training cost, maintenance cost, quality of performance and environmental impact. 4. Procure goods and services with due regard to the preservation of the atural environment and to encourage the use of environmentally friendly products and services. Material management Materials management is part of logistics and refers to the location and movement of the physical items or products. There are three main processes associated with materials management: spare parts, quality control, and inventory management. Materials management is important in large manufacturing and distribution environments, where there are multiple parts, locations, and significant money invested in these items. The first process in materials management is related to spare parts.
A detailed business process is required to determine the order point for the spare parts, identify the ideal quantity to order, process receipt of the parts, and then make sure they are in the correct place. Spare parts are integral to the continuing operation of production lines and related equipment. Poor management of this process can cause downtime and loss of production. Quality control is a large part of materials management. The creation of material standards, inspections, and returns process is a primary responsibility of the materials management group.
All parts and materials must be tested to ensure that a specific level of quality is met. This is typically completed before a purchase order is issued to a supplier, to ensure that the supplier has met the conditions of their contract. It is used to ensure that the company delivers quality products to their customers, and to minimize waste in the production Sources: http://www. wdo. ca/files/domain4116/Final%20WDO%20Purchasing%20Policy%20for%20posting. pdf http://www. businessdictionary. com/definition/purchasing. html http://www. wisegeek. com/what-is-materials-management. htm
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