The paper "Supply Chain Management in PEP" is an outstanding example of a management case study. Supply Chain Management (SCM) refers to the delivery of superior consumer as well as an economic value using coordinated managing of the physical goods as well as the related information flow from sourcing through consumption. SCM consists of a complex matrix of concepts and practical applications, which are employed to respond to a myriad of problems affecting organisations within its own operations and in the channel (Pagell 2004). This is evident in the PEP case where the company faced distribution problems.
There was a need to reduce or contain the possible cost effectiveness of the distribution system while improving the company performance principles as well as service levels. PEP Stores was under pressure to deliver its products to the market faster to increase process flexibility to respond to the shifts in the marketplace needs and to reduce product and operating costs. This led to the company turning to the strengths found in the supply chain partners to enrich its competitive capacity. Supply Chain Management in PEP PEP looked for new ways to converge its strategic and operational strengths to become more creative and more responsive to the marketplace using supply chain management.
Its success in the employment of SCM and the benefits accrued shows that companies that succeed in exploiting supply chains are able to control and focus production roles better whilst expanding their products reach to meet nationwide as well as global demands (Danese 2011). The PEP case proved that poorly defined relationships with suppliers, the disconnection between channel systems lead to avoidable costs as well as redundancies and hidden supply chain constraints which means disaster for the company and its product.
SCM forms one of the key cornerstones of avoiding such disasters and achieving marketplace in leadership in today’ s ever-changing market place (Danese 2011). SCM plays a major role in consolidating supplier and customer basis getting rid of redundant stages in the supply chain, accelerating materials flows, and enabling lasting partnership with main suppliers and customers to influence the capacities of various companies involved in the chains. Generally, SCM set of activities endeavour to manage and coordinate the supply chain from the suppliers of raw material to the final user to achieve win-win position (Jayaram, Tan, & Nachiappan 2010).
SCM is a tactical tool, which the management used in managing various operational actions, such as controlling of outbound and inbound materials and information flow, and the removal of channel ineffectiveness, redundancies and costs broadening from the acquirement of raw materials, via product manufacture, distribution, and consumption. By enabling this, as evident in the PEP case, SCM is in a unique position to offer supply chain systems with the capacity to create total new approaches to product innovation and being shaped by the practical requirements of identifying and winning today’ s most profitable marketplace opportunities. Inventory Management and Risk Pooling PEP used the risk pooling strategy in inventory management in its supply chain management initiatives.
Inventory management plays an important function in the value chain of an organization. Companies opt to push or pull inventory approach via its distribution channel (Pagel 2004). Managing inventory leads to improvements in customer service and costs reductions. Clear and consistent performance measures for inventory management process are key to company success.
The measures show the tradeoff between inventory and service level. According to Simchi-Levi, Kaminsky and Simchi-Levi (2008), the objective of efficient inventory management in supply chains is to have the accurate inventory at the required time as well as at the required location to reduce structure costs whilst meeting the requirements of consumer services. However, they further argue that managing inventory is complex supply chains are usually hard, and thus decisions related to inventory have considerable influence on customer service levels as well as supply chain system-wide costs.
In the PEP case, inventory control mechanisms were employed.
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