Running head: HOSPITAL MANAGEMENT Hospital Management 7th November Supply chain management encompasses the organization of all the activities undertaken in the production of products. Major components of supply chain management applied in most companies include supply, transportation, inventory, information, production and location. In order to ensure companies have adequate information regarding the needs of their customers, it is paramount to emulate hybrid system that supports individualization of demand and segmentation of customers. Other systems covered by the paper include pull and push system. Introduction Supply chain management (SCM) entails the planning and organization of the entire activities that are involved during sourcing of raw material, procurement of services or goods, as well as logistics management (Hugos, 2006).
In addition, SCM include the important aspects of collaboration and coordination of all the partners involved in the provision of services or goods. Examples of such partners are customers, suppliers as well as intermediaries. Essential components of a typical supply chain management process Production Production is one of the important components of SCM. In order for a company to attract new customers and retain the loyalty of the existing customers, it is vital to provide services and products that meet the needs of its customers.
In addition, it is essential to provide quality products that effectively satisfy the demand from the market. The importance of customer feedback is a vital aspect that ensures their taste and preferences are taken into account during the production of products. Supply This entails the process through which a company obtains the raw materials needed during the production process. It is fundamental for organizations to consider the prices of the inputs in order to reduce the cost of production.
One of the companies that take into account the prices of its input is Wal-Mart, the world biggest supermarket. It is also paramount for companies to be flexible in selecting their suppliers. Inventory Being one the major component of supply chain management, inventory ensures that organizations maintain appropriate level of products. In this way, companies are able to provide adequate products to their customers. In order to track the goods in stock, it is appropriate to adopt technology such as Radio Frequency Identification technology that is used by Wal-Mart.
Even though it can be expensive to maintain such technology for small companies, it has long term benefits that offset the initial cost of installation. Location It is essential to consider the location of a business. Availability of customers, security and infrastructure systems are some of the major factors that are considered when looking for a business location. In addition, it is important to identify customers demand in order for a company to be competitive and increase it sales. Before opening a store, Wal-Mart considers customer satisfaction as well as customer demand.
This ensures that it products effectively reach the customers. Transportation Transportation is a vital component of supply chain management that ensures organizations can effectively distribute their products and services. In order to reduce the transportation cost, most of the well established companies such as Wal-Mart and Coca-Cola have embarked on using their own trucks to transport their products. Information Information is another essential component of SCM. It entails collection of the information from the customers and other parties and links them with other resources within and outside the companies’ premises.
In the modern times, organizations are using internet as an avenue of getting feedback from the customers as well as passing information regarding new products. In order to execute information in all its stores and to the customer, Wal-Mart and Coca-Cola maintains properly designed websites. Push system A push system entails production of products by companies with the hope that the products will generate demand (Hugos, 2006). One of the major aspects of the push system is that it is cheaper. However, it seems more of a gamble since companies will need to supply certain level of products without being aware of the level of demand. Pull system Pull system implies that customers generate demand that propels the production of the products.
In order to create the demand, organization emulates advertisement through media and other avenues to inform the consumers about new products. Hybrid system Hybrid system entails the production of products based on the fact that consumers have diversified needs. Organizations emulating the hybrid system in their supply chain management should seek more information from the customers in order to be certain of individual customer needs.
In order to maintain its customer value, the hospital should use the hybrid system in its supply chain management. In this way, the hospital will be able to classify their customers into various segments depending with their need. In addition, the hospital will benefit from the individualization of demands an aspect that is used by profitable companies that aim at expanding their customer base. In the same way, hybrid system ensures that customers are addressed in a distinguished way thus resulting to a higher customer loyalty and trust. Conclusion Based on the above analyses, it is clear that the aspect of supply chain management cannot be overlooked.
Due to the global recession, many organizations have taken initiatives to reduce their cost of production. It is important for organizations to undertake a research in order to come up with policies to reduce the costs incurred during production, supplying, transportation, as well during sending of information. It is also fundamental to consider the needs of individual customer an aspect that is advocated for by hybrid system. References Hugos, H. (2006). Essentials of supply chain management.
New York: John Wiley and Sons.