The paper "The Importance of SCM in the Orange Industry" is an outstanding example of a business case study. Supply Chain Management (SCM) signifies the management of the entire series of procedures that involves information, materials and finances as they move from the producer to the wholesaler or trader to the retailer or trader and finally to the end-consumer (Technology Management Studies For the Enterprise CIO, 2009). This comprises the synchronization and management of this flow both within and between companies. Earlier most companies did not manage the whole process of delivering products to the final consumer.
Marketing, Planning, Distribution, Manufacturing and Purchasing – all the components along the supply chain worked independently. Hence there was great inefficiency in the SCM, hindering business productivity. The Supply Chain complexity is likely to differ vastly from industry to industry and firm to firm. Supply Chain Management Supply Chain Management ensures customer value maximization and allows for a sustainable competitive edge by introducing efficacy and efficiency. The SCM process involves activities such as product development, sourcing of raw materials, production, logistics and all the Information Technology systems that are needed to manage these activities.
This involves three kinds of flows – the Physical Flow, the Information Flow and the Financial Flow. When one refers to the Physical Flow, it comprises the visible components in terms of movement, transportation and storage of materials and goods. It also includes customer returns or service need. On the other hand, the Information Flow allows all the partners of the supply chain to coordinate amongst themselves by overseeing the day-to-day control of the goods and materials. It also includes the transmission and updating of the status of delivery.
Credit terms, consignment and title ownership arrangements and payment schedules make up the Financial Flow (NS State University, Supply Chain Resource Cooperative, n.d. ) There are several components of the supply chain and these include the Customer, Planning, Purchasing of raw materials, Inventory, Manufacturing or Production and Transportation. It is essential that the supply chain of any organization operates as efficiently as possible ensuring a high level of customer satisfaction at the lowest possible cost. Thus a company needs to plan the entire supply chain management process on three levels.
First, a strategic level, where the company management focuses on decisions concerning the entire organization such as the size and location of production plants, market research, product research and partnership with the suppliers. Next is a tactical level that will result in cost benefits by employing industry best practices, chalking out purchasing strategies, transportation and warehousing strategies and reduction of the cost of inventory storage. Third, is the Operational level that involves the day-to-day running of the business that oversees the movement of the products along the supply chain.
This involves activities such as schedule changes to production and purchasing agreements with suppliers (Introduction to Supply Chain Management, 1995). An effective SCM is one that employs sophisticated software systems that have web-based application service providers (ASP) in order to ultimately reduces inventory (allowing the manufacturing of products on a need basis only and thus ensuring commercial success). The SCM software can be of two kinds – Planning Applications and Execution Applications. The Planning Applications make use of complex and advanced algorithms to come to a decision on the best solution to fill an order and the Execution Application aides in the tracking of the physical status of the goods, material management and the financial involvement of all concerned parties.
Sometimes the SCM application could be based on the extended enterprise, which supports the sharing of data both inside and outside the enterprise, including manufacturers, suppliers and the end consumer of specific companies). The ‘ upstream’ (organization’ s suppliers) and ‘ downstream’ (organization’ s clients) sharing of data can significantly improve the time-to-market of products, cut costs and enhance operational efficiency (Technology Management Strategies for the Enterprise CIO, 2009).
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