Supply Chain Management Activities in a Leading Retail Industry among the Business Owners, Suppliers and Customers
In general, Supply Chain Management (SCM) is a wide area in a leading retail industry that combines all the companies involved in the production of goods and services such as the manufacturers, suppliers, wholesalers, distributors, retailers and consumers. All of these people play a major role in the process of delivering goods and services to the market. Hence, the Supply Chain Management (SCM) principles are vital in order to satisfy the customers. Due to the continuous increase of competition in the market, many enterprises these days are leading towards wider scope and improvements in their supply chain capabilities with the help of new technology such as computer. This optimization of supply chain performance by the use of electronic mail and the internet have been paved the communication and data exchange as well as the facilitating of the necessary flow of information between the companies in the supply chain becomes easier compared the past years. In this connection, a main principle of supply chain management network facilities is the way how people involved in the procurement transform their products and services, then how they eventually distribute them to the market. Hence, this cycle is an integrated supply chain of interrelated obligations from one person to another. The integration of the individual tasks of the supplier to the manufacturer, as well as the manufacturer to the consumer are interconnected from one another in order to achieve a main goal and that is to produce a quality product for their consumers.
(http://en.wikipedia.org/wiki/Supply_chain_management)
Moreover, the links within the supply chain are not possible without the important data and information, computer systems and processes that are being done by each of them. Hence, supply chain management becomes more complex whenever goods flow from more than one supplier to more than one manufacturing and distribution site and to the consumers. The opportunity of outside sources for other functions like assembly and packaging are also optional in the supply chain management. Whereas, the basic task of retail store or distributor stays the same. Still the suppliers are required to supply materials, the manufacturers still have to produce goods; as well as the distributors still have to distribute products to the retailers, so as the customers still have the desire to purchase products in the retail stores. There are various kinds of events occur unexpectedly in the supply chain management like suppliers sometimes may make early or late deliveries of the raw materials. There are times that customers for any reason can increase their orders or even cancel their orders especially, if other retailer is offering more attractive deal to them. However, there are new customers who immediately place huge order. Occasionally, machines, delivery truck, computer can shut down; and even employees can get sick, or go on strike and leave their jobs. All these things just show that even supplier shipments and manufacturing companies are having quality problems at some point in time. As a result, it is important to have a chain visibility in the inventory level in order to have an improved performance in the supply chain management area. For illustration, Procter & Gamble (P&G) has been always reviewing the demand patterns of their consumers in the market; so that they will not encounter shortage supply problems.
(http://www.referenceforbusiness.com/management/Str-Ti/Supply-Chain-Management.html)
Subsequently, to be able to help in creating an efficient, effective and integrated supply chain management; reduction of costs also plays a significant role in the cycle. A study showed that supply chain costs may represent more that eighty percent of the cost structure in a typical manufacturing company. These numbers indicate that even slight improvement eventually translates into millions of dollars savings. For every dollar of inventory in a system, there are one to two dollars of hidden supply chain costs: working capital costs, asset costs, delivery costs among many others. Leaner inventories free up a large amount of capital. Nevertheless, leading companies in supply chain management performance have the ability to achieve savings equal to three to seven percent of the earnings than the median competitors. Lastly, it is very vital to understand that the success of supply chain management greatly relies on the core values of the involved companies as well as the requirements of the manufacturers and the needs and demands of the customers. It is very challenging to know that customers expect also that the products and services are being improved in order to value their needs and demands. Lastly, the process and perspective of the suppliers can be associated with the buying process of the consumers. It is important to put this in mind that the evaluation of the buying process of the supply chain management are being stopped or hold because of the final decision or control of the final customer or consumer. (http://www.referenceforbusiness.com/management/Str-Ti/Supply-Chain-Management.html)
References:
(http://en.wikipedia.org/wiki/Supply_chain_management)
(http://www.referenceforbusiness.com/management/Str-Ti/Supply-Chain-Management.html)
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