Supplier Relationship Management (SRM) is a concept in the Supply Chain Management, which considered in the aspect of establishing and sustaining the business relationship along the supply chain. Supplier Relationship Management (SRM) concerns the practical processes to integrate the communication and coordination between organizations and their suppliers. Supplier chain relationship was considered to be one of the important factors in most business, since it can influence the potential of supply chain concept. Now, the modern business seems to be more complex with high competition. Due to the information has more valuable in the supply chain management, firms then need to re-design the ways of managing and sharing information among each others. Organizations cannot independently run the business by themselves. Not only good relationship can help companies to have more competitive advantage to survive in the market, but it can also help companies expands the market too. Supplier Relationship Management (SRM) Continue reading
Supply Chain Management
Supply Chain Integration Strategies – Vertical and Horizontal Integration
Supply Chain Management (SCM) is defined as the integration strategies aimed at coordinating functions across suppliers, manufacturers, distributors and retailers to ensure that products and services are produced and distributed at the right volume, location and time with the aim of reducing operational costs, maximizing profits and ensuring satisfaction across the supply chain. Supply chain integration strategies are network-based business models used by organizations to align strategic decisions and processes across the network from supplier/manufacturer end to the customer end in order to achieve competitive advantages, synergy and efficiency in their operations as well as to gain more control in the input and output of their operations. Network-based business models are organizational structures that allow companies to operate as interconnected configurations across its value chain usually consisting of partnerships, collaborations and optimized cross-organizational activities. Vertical Integration Vertical integration is a coordination strategy in which a company owns its supply chain Continue reading
Understanding Different Types of Supply Chain Risk
There have been many different definitions of supply chain risk, but it can be broadly defined as the variation in the distribution of possible supply chain outcomes, their likelihood, and their subjective values. However, this definition has since been expanded upon to account for all the different departments and functions that operate within a supply chain. This leads to an overall definition of supply chain risk as any risks for the information, material and product flows from original supplier to the delivery of the final product for the end user. Simply put, supply chain risk refers to the probability of a risk event occurring the supply line and when the product goes on sale. Furthermore, risk sources are the predominant causes of risk events, which are the environmental, organizational or supply-chain variables which cannot be predicted with certainty and which impact on the supply chain outcome variables. Identifying Supply Chain Continue reading
What is a Lean Supply Chain?
A supply chain is a network of facilities, functions and activities that are involved in fulfilling customer demand. Supply chain is the network of organisations that are involved through the upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hand of the ultimate customer. The coordination within the entire chain is therefore very important. The supply chain covers activities on the business process, procurement, production, inventory carrying, storage, handling and distribution within an organisation. Supply Chain Management is therefore, the integration of key business processes across the supply chain for the purpose of adding value for customers and stakeholders. The size of the business determines the extent of Supply Chain Management it will get itself involved in. Companies invest heavily in Supply Chain Management to give their customers value for their money since supply chain management is Continue reading
Bullwhip Effect in Supply Chain
The problem of Bullwhip effect in supply chain management has always been a concern for many years. Due to its non industry specific nature, it has grabbed the attention of many professionals from diverse industries and business schools. Bullwhip effect as its name suggests is an oscillation in the chain or pipeline. In supply chain this effect occurs when there is a constant fluctuation in the demand. In-congruence in the information leads to its distortion thereby creating a bullwhip. The expression “Bullwhip Effect” was termed by executives of P&G, the company that manufactures Pamper brand of diapers. These executives observed that while the consumer demand for Pamper’s Diapers was fairly constant over time, the orders for diapers placed by retailers to their wholesalers or distributors were quite variable i.e., exhibited significant fluctuations over time. In addition, even larger variations in order quantities were observed in the orders that P&G received Continue reading