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evolution; and it can help improve quality of life. Supply chain management
SCM impacts customer service by making sure the right product assortment
SCM has a tremendous impact on the bottom line. Firms value supply chain
managers because they decrease the use of large fixed assets such as
Inventory management
Materials handling
Inbound transportation
Warehousing management
strategic objectives:
Five areas in which supply chain management can have a direct effect on corporate
value are:
involved in new product development. The bottom-line numbers give the answer.
* Working-capital reductions: Increasing inventory turns, managing receivables
and
cycle
assuring
that the company has the right number of warehouses in the right places, or
outsourcing
may involve making strategic choices about such issues as outsourcing and process
design.
Time and inventory are two important, interrelated issues that drive the need for
best practices. Success with these practices also creates inventory yield
price and the maximum yield for products. Hit that window, and companies enjoy
higher pricing and profit margins. Leaders understand this in using best practices.
Following points are important to drive a profitable growth using controls on supply
1. Inventory Management
knows how to untie it, and it cannot be cut. The inventory quandary applies to all
inventories-finished goods, raw materials, parts and components, MRO and work-in-
process. It includes new products and existing products. It covers all types of
satisfaction and to make sure that there is always inventory on hand to meet each
order. Finance wants to carry fewer inventories to free up capital for other needs.
Given the vagaries of sales patterns, supplier lead times, and production sizes, the
"answer" is dynamic. When sales are booming, inventory may not be as scrutinized
as it is when sales are slow and inventory is sitting in warehouses and plants.
Poor inventory turns are signs of many problems. Inventory must move quickly;
turns should be high. Inventory that sits and does not sell consumes available
working capital and limits applying that capital to the business. Products must flow
from suppliers or manufacturing sites to customers. Being inventory rich and cash
turns assets into profits. The faster inventory moves and turns, the greater the
Customers demand that their orders be shipped complete, accurate and on-time.
That means having the right inventory at the right place at the right time.
A great deal of insight can be found in the supply and payment agreements with
suppliers. There are a number of elements to consider, including how you can avoid
costs for corrections in orders and supplies and the optimisation of the payment
For many organisations, a great deal can also be improved on the operations side of
things. There can be reasons for incorrect supplies occurring, and instead of simply
correcting the relevant order, its important to search for the point in the process
where the error arose in order to prevent the same mistake from happening again.
By continually measuring whether the right product in the right quantity is delivered
to the right place at the time required by the client, supply processes can be further
optimised and costly errors avoided. However, a factor that is at least as important
in order to save costs is the settlement of payments with clients. Reducing the term
between ordering and payment, solving late payments, making missing payments
Supply chain cycle time runs from the time the need for a product--new or
store. The length of global supply chains adds to time and the challenge to
compress. Safety stock inventories are a buffer against uncertainty. Long cycle
times add to the uncertainty-and in turn the amount of inventories carried and
supplying products that are not seasonal and have a life cycle of more than 12
months
reducing the number of warehouses to one centralized location in California
synchronizing data between the central warehouse and its own stores and
customers, making operations more efficient and cost-effective
Walmart has been able to assume market leadership position primarily due to its
stores. Its supply chain strategy has four key components: vendor partnerships,
supply chain begins with strategic sourcing to find products at the best price from
suppliers who are in a position to ensure they can meet demand. Walmart
establishes strategic partnerships with most of their vendors, offering them the
potential for long-term and high volume purchases in exchange for the lowest
possible prices.
the market. Wal-Marts supply chain management strategy has provided the
Due to its enormous size and large number of stores worldwide, Wal-Mart has
the tremendous bargaining power with its suppliers and thus it purchases
products at lower prices.
SOURCES:
https://www.usanfranonline.com/resources/supply-chain-management/walmart-keys-
to-successful-supply-chain-management/#
http://www.referenceforbusiness.com/management/Str-Ti/Supply-Chain-
Management.html
https://www.auxis.com/newblog/supply-chain-excellence-a-critical-link-to-driving-
profitability
http://www.supplychain247.com/paper/supply_chain_logistics_as_a_driver_of_busine
ss_strategy_profitability/C.H._Robinson
https://www.tradegecko.com/blog/apple-had-the-best-supply-chain-in-the-world-for-
the-last-four-years-here-is-what-you-can-learn-from-it