Examine the Strategic Importance of Supply Chain...

1.0 Introduction 2.0 Principle of SCM SCM is the management of a network of interconnected businesses (such as distributors, wholesalers and retailers) involved in the ultimate provision of product and service packages required by end customers. It spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain). Principles of SCM are: - Internal integration of purchasing and supply, manufacturing and physical distribution management - External integration with suppliers (and their suppliers) and customers (and their customers) 3.0 Its Strategic Importance We can see SCM’s development from the internal focus and conflicts of†¦show more content†¦Along with the recognition that the sure way to success in business is to offer good quality products, the immediate price benefits of multi-supply relationships have been challenged by the development of long-term contracts which include price reductions. There have been a range of relationships within these single-supply approaches aiming for greater integration. The sole supplier – multi-layered approach As firms have explored the efficiency of their manufacturing operations and started moving away from optimising inside their own organisation and outwards to considering the chain as a whole, their supply chains have become leaner. The nature of supply relationships has seen a shift towards long-term partnerships. Many japans business innovated by adapting the sole-supply but multi-layered relationships. Example can be made reference to Toyota who adopts this hybrid style of relationship. The approach has many of the advantages of the single-supply, single-layer approach as well as some of the benefits of multi-supply. In multi-layered relationships, the OEM firm has a long-term relationship with one supplier which generates stability, quality and mutual development. However, the supplier is not highly vertically integrated. So instead of carrying out all the activities needed to produce the supplied parts, the supplier relies on a number of smaller sub-contractors. This relationship gives the benefitsShow MoreRelatedProduct Process Matrix3847 Words   |  16 Pagesevident in a single manufacturing facility environment. The product-process matrix has been empirically tested, but improvements in operations flexibility by applying advanced technologies have caused many to question the models continued validity. In recent years, the environment has changed significantly, with manufacturing companies offering more product customization as they gain process flexibility. In addition, the model as originally developed, does not incorporate the supply chain perspective.Read MoreTrends in Procurement Scm49 17 Words   |  20 PagesPROCURENENT AND SUPPLY CHAIN MANAGEMENT 1. 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