Supply Chain Management : Case Study

In comparison with K-Mart, Wal-Mart has better ability in responding sudden demand and marketplace changes or uncertainties, which supported by their effective distribution strategy and inventory management. Moreover, Hi-tech information technology, such as VMI and REMIX also offer real time information all supply chain participant. (Johnson 2006). However responsiveness and efficiency could not be obtained at the same time. To gain responsiveness, Wal-Mart inventory is raised and the growth of it faster than sales growth which cause increase in the cost. More inventories means higher holding costs.

Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.

Supply-chain management consists of developing a strategy to organize, control, and motivate the resources involved in the flow of services and materials within the supply chain. A supply chain strategy, an essential aspect of supply chain management, seeks to design a firm’s supply chain to meet the competitive priorities of the firm’s operations strategy.

Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay

Under such a system, the vendor—subject to bounds previously agreed upon with the retailer—decides on the appropriate levels of inventory to carry at the retail stores, as well as the corresponding inventory policies to maintain such levels. In the P&G and Wal-Mart partnership, P&G committed to the development of a dedicated team to handle the Wal-Mart account. A primary objective of this team is to facilitate information-sharing between the two firms and address logistics, supply, management information systems, accounting, finance, and other issues (Handfield and Nichols, 1999). Under this arrangement, Wal-Mart shares point-of-sale information from retail outlets directly with P&G, giving the latter easy access to information on consumer transactions and buying patterns. P&G’s dedicated Wal-Mart account team effectively takes responsibility for the marketing and sales of P&G products within Wal-Mart stores. Similar VMI partnerships with other giant retailers have been established by P&G. These partnerships have dramatically improved P&G’s on-time deliveries to Wal-Mart and the other retailers while increasing inventory turnovers (Simchi-Levi, et al, 2000; Handfield and Nichols, 1999). At the same time, they save the retailer a significant amount of managerial and other resources, and demonstrate how information sharing leads to mutual advantage for both

To start, Schroeder, R., Goldstein, S., and Rungtusanatham define supply chain as “the set of entities and relationships that cumulatively define materials and information flows both downstream toward the customer and upstream toward the very first supplier.” Schroeder, R., Goldstein, S., and Rungtusanatham goes on to identify supply chain management as “the design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer.” Organizations have to prepare themselves to the best of their ability in order to provide or their customers. Customers expect to receive the upmost service, regardless of the type of organization they make contact with.

Better communication lets you ignore day to day fluctuations and gives you better chance of equilibrium between your chains and the demand for your product. There are various tools/techniques to increase communication with technology at the forefront. The key is to get information rapidly down the supply chain. The internet and other forms of electronic commerce have transformed supply chain management. Phones, cameras, bar code technology and computer software are all examples of technology that has improved communication. Standardized parts have also led to better supply chain results. This was only possible due to improvements in technology.

Effective supply chain management can provide an important competitive advantage for a business marketer, resulting in improved communication and involvement among members of the chain, increased motivation, and decreased costs. Tracking the movement of and demand for components used to manufacture a product across a variety of potential and actual suppliers, provides insight and the ability to respond instantly to shortages, surpluses, and changes in market conditions. It seeks to optimize production, decrease manufacturing time, minimize inventory, streamline order fulfillment, and reduce cost.

The average company spends nearly half of every dollar it earns on production needs—goods and services it needs from external suppliers to keep producing. A supply chain consists of all parties involved, directly or indirectly, in the procurement of a product or raw material. Supply chain management (SCM) involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

The simplest level of supply chain management is to make inventory readily available to meet customer demand. Without inventory, there is nothing available to draw customers in. Through their resources, organizations must meet supply with demand in a timely fashion. Supply chain partners should work together to increase resource productivity, develop standardized processes, and minimize the level of inventory. These steps will reduce an organization’s waste, costs, and raise supply chain efficiency.

These trends are; improvement of the levels of customer service over cutting costs. Supply chain costs are continuously going down since recession started four years ago. The focus of companies is the improvement of the service levels of supply chain and at the same time reducing the costs. Execution is also been seen to be moving ahead of the planning of demand and supply. Planning for demand and supply has been the ultimate focus since o=it is a crucial part of success in supply chain. Contingency planning has also resurged, supply chains are becoming leaner (Riley, 2012).Reduction in the level of inventory require organizations to be able to react quickly incase of occurrence of abnormal events such as stock outs. Companies focus on the development of contingency plans, their execution and checking if the plans are effective.

This article is about supply chain management (SCM). Its importance in the field of operation management. Supply chain management was discussed from the past three decades. This article tells about how supply chain management developed and how it will proceed in the future. The term “supply chain management” first appeared in the practitioner literature in 1982, which said that SCM is a way to manage resources and assets in a better way.

Supply chain management plays a very crucial role in the success of any organization and how it can cater to a customer’s need and provide the maximum satisfaction. Supply chain management is essentially managing the flow of goods/services of an organization. It involves raw materials storage, transportation, inventory management, distribution and procurement.

Supply chain management is a main process in all kinds of companies. That’s because an optimized supply chain results in lower costs and a faster production cycle.

Innovative products in supply chain management have a very high uncertainty life span in terms of demand from consumers. Not only is the uncertainty of demand an important factor, it is also important for companies to understand how and when to share information with partners and customers along the supply chain in order to please the consumers demand, and stay two steps ahead of demand uncertainty. Innovative products also have higher cost, and they are very difficult to forecast. Although, it is not an easy process, it can very well be done. The main concern is consistent communication and hard work from Distribution Center (DC) management, Supply Chain managers and directors, operation managers, etc. Furthermore, maintaining a high-quality communication through the supply chain will improve and control logistics costs, and will definitely make the supply chain more competent. Companies that create and manufacture innovative products such as Hewlett-Packard (HP) have to deal with attacking tough supply chain management challenges on a daily basis in order to remain top competitors within their industries.