The factors in the supply chain process include the product manufacturer, the wholesaler, the distributor and the retailer. The objectives of a supply chain management system are to increase customer value and to develop a reliable advantage over the competition. Small businesses that take part in supply chain management activities must understand how they fit into the system and how they can accomplish their appointed tasks.
Determine levels of collaborative intensity. Examine strategic importance versus difficulty to determine product categories. This process begins with determining the specific contribution of each party and the criteria for measuring that contribution. In early stages, relationships should emphasize equity in profits among all parties.
Equity will help motivate all parties to work toward the good of the whole. The next talk is to define roles for each party, taking care to avoid redundant efforts.
Conflicts can occur if these roles make one party more dependent upon another than they wish to be. To alleviate this common problem, networks should avoid sequential interdependence, in which the second party cannot begin work until the first party is done.
Instead, they should establish reciprocal interdependence, in which the exchange of tasks and services occur in both directions. Since no contract can cover all contingencies, the next task is to create a policy for resolving conflicts.
Overcome Barriers to Collaboration Building successful collaboration requires overcoming predictable obstacles, including the following challenges: Sub Optimization Sub optimization refers to a solution to a problem that is best from a narrow point of view but not from a higher or overall company point of view.
Individual Incentives that Conflict with Organizational Goals Incentives, such as sales force bonuses, structured without thought for the supply chain strategy, can often be counterproductive.
These practices create a great deal of excess inventory as well as variability in demand that the manufacturer must then deal with. Instead sales goals must be aligned with actual demand. Working with Competitors One firm may try to win market share at the expense of the other. Companies may pretend to embrace collaboration when they really only want access to information for their own benefit.
Bottlenecks Caused by Weak or Slow Partners If the firm is not willing to invest un a technical and social change process, the only alternative may be to find a more willing or able partner who can keep up with the networks collaboration curve.
Technology Barriers When potential partners have incompatible systems, it increases the difficulty of sharing data. Power-Based Relationship Rather than building relationships based upon trust and mutual benefit, the nucleus firm may use its leverage to dedicate the terms of relationships to other members.
While the profits of the nucleus firm increase, other members of the network may suffer losses. When this occurs, the disadvantaged partner may rebel. Resistance may result in redundancy, loss of overall profitability for the chain or an actual reversal of the power relationship.
Once in power, the mistreated party may retaliate instead of using the opportunity to develop equitable relationships along the chain. Underestimated Benefits When collaboration is viewed as another type of process reengineering, the partners generally measure the results in reduced cost and cycle time rather than return on investment ROIwhich is a better long-term indicator.
Simply measuring efficiency increases will fail to account for some of the true long-term benefits or collaboration. This may lead managers to reject a collaborative venture based on a failure to see gains such as removal of reduplicated efforts, enhanced innovation and better use of total system assets and processes.
Culture Conflicts Cultures tend to be egocentric and thus tens to resist external collaboration. They feel that their ways are the best ways of doing things and will often reject a different way without even considering it.
Culture conflicts are increased when each company relies on its own sources of information and unable to see the impact of its choices on other areas of the network. Another potential culture conflict can arise when managers delay or prevent collaboration.
Such managers generally have safeguarded their positions by not sharing information so that they may be sought for their expertise.
Others feel that collaboration is a fad or a bad idea altogether. Still others talk about collaboration, but they are only interested in receiving the benefits from a partner without reciprocating. Build Levels of Communication Communication between partners can take place on different levels; not all collaborations dependent upon the same degree of intensity of communication.
Four levels of communication: Transactional with Information Sharing At this level of communication, each partner has access to a single source of data about matters such as workflow, forecasts and transactions.
Contracts are generally medium term.
Shared Processes and Partnership At this level, partners collaborative in specific processes such as design.Supply chain management is the backbone of business in global and competitive world market.
Supply chains are increasingly becoming more complex and dynamic. The success of the business often depends on the success of your supply chain. Supply Chain Management Essay.
It places emphasis on the efficient application and usage of transportation by the management of business within the framework of logistics. Supply chain manages resources, procurement, fabrication, production, storage and production.
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Check out our professional examples to inspire at grupobittia.com In conclusion, the supply chain and demand model is another tool that businesses can use in order to forecast future business. When a company puts together the information, then they can predict how much of a product needs to be supplied in order to keep up with the demand.
Jun 26, · Business software developer SAP has created a suite of products devoted to supply chain management. The SAP SCM suite offers a range of .