Introduction, New Developments in Supply Chain Management24/09/2022 0 By indiafreenotes
A supply chain is like a network that provides facilities and options like distribution which performs operations like Procurement of material, the transformation of these materials to specific intermediates, and after that finished product and the distribution procedure starts which starts distributing respective products to customers. Following are some key points regarding the supply chain.
- In the previous times, all the organizations like marketing, distribution, planning, manufacturing, and purchasing organizations work independently along the supply chain.
- Organizations have their independent objectives which are sometimes conflicting also.
- To work in an efficient manner there arises a need through which these different functions are able to integrate together.
- Therefore, Supply chain management is a strategy that came into arising through which such integration can be achieved.
- Predict the future. It’s not a crystal ball, but predictive strategies anticipate patterns to proactively resolve issues before they occur, meet demands without overstocking, and minimize costs. With the current trade environment, shippers must be prepared for anything. One way to tackle this is by having sophisticated systems in place that increase options when a supplier is unavailable.
New Developments in Supply Chain Management
The first major trend is functional integration; it directly influenced the information systems that were developed to facilitate Supply Chain Management. Supply Chain activities sourcing, vendor selection and purchasing, as well as manufacturing related activities such as production planning, scheduling and packing must be part of the integration effort. Key enablers of the integration of functions in information technology. The major benefit of integrating functional activities through information technology is reducing the associated costs.
The second major trend in the business environment influencing the development of information system is emphasis on speed to market with high quality product. Time & Quality based competition can be defined as the elimination of waste in the form of time, effort, defective units, and inventory in manufacturing distribution systems. Two capabilities that are useful in a time and quality based competitive environment are agility and flexibility. With faster product innovations, decrease product life cycles, and rapid imitative competition, only firms that are agile and flexible will survive. Agility is the ability to respond quickly to changes in the marketing environment. Agile firms are able to successfully market low-cost, high-quality products with short lead times in varying volumes that provide enhance value to customers through customize. Flexibility is defined as the capability of changing from one task to another rapidly when changing conditions are defined ahead of time.
The third major trend in the business environment that has helped increase the growth of information systems in the tremendous increase in computing power at very low costs. The evolution of information technology and diminishing transaction costs will lead to fundamental restructuring of industry practices for distributing and supporting products. Advances in information system will likely to cause four changes: more transparent organizational structures, more strategic alliance, and increased emphasis on performance measurement and great reliance on time-based strategies.
- Gain visibility. Real-time data for the handling of goods and materials at any stage of the supply chain is critical for effective management. Supply chain visibility lets companies assure consumers that the products they’re buying are sustainably sourced from both an environmental and social perspective. Just ask H&M, which recently released its supplier factory map. Customers are able to make more informed decisions about their buying practices. Having this data enables companies to maintain control, enforce policies and laws, and respond quickly to problems before they escalate.
- Hire data teams. A successful future in supply chain management requires robust technological investment, but not just at the material level. Without dedicated human resources for data teams, organizations fall short. That’s because supply chain data teams offer a range of dynamic advantages beyond implementing new systems. They thoughtfully analyze data, produce insights, and recommend growth strategies in the full context of the business’s needs.
Supply Chain Information Systems
Information systems are essential to managing a supply chain. The supply chain information systems rely on either EDI (Electronic Data Interchange) or the Internet to transmit information within the supply chain. A valuable initial element in managing a supply chain is developing supply chain information systems. The concept of supply chain management is built on functional integration, which is supported and often catalyzed by information technology.
One of the components of the implementation of supply chain management is information sharing through two-way communication between partners within a supply chain. The activities of information generation, storage, and utilization in individual firms in a supply chain are essential to implement supply chain management. Member of a supply chain need real-time visibility of performance data across the entire supply chain.