Some companies have chosen to centrally manage their supply chains using a control tower approach. In contrast, Flextronics wants the whole company to see the same information globally, but let local managers make decisions. To do this, Flextronics which counts Apple Inc. Employees based at a factory in Europe, for example, can see trouble spots, such as an earthquake in Taiwan, on an interactive map.
By touching the map, they can drill down on specific inventory and supplier data. If needed, they can initiate a video conference with the factory in that region right from the screen. Effectively managing the supply chain is critical for companies hoping to recover from unexpected events such as political unrest, terrorism, natural disasters and extreme weather.
The Importance of Real-time Information in Retail Supply Chain Management
Flextronics produces millions of products each month for other companies, he said. The company began developing the software more than two years ago. Shahin, in an interview. Over time, Flextronics executives said the system will make a difference to its bottom line, give the company more visibility and improve efficiency and speed. Perhaps most important, it will help the company mitigate supply chain risk.
Write to Rachael King at rachael. All Rights Reserved. Supply-chain management was then further defined as the integration of supply chain activities through improved supply-chain relationships to achieve a competitive advantage. In the late s, "supply-chain management" SCM rose to prominence, and operations managers began to use it in their titles with increasing regularity. A supply chain, as opposed to supply-chain management, is a set of organizations directly linked by one or more upstream and downstream flows of products, services, finances, or information from a source to a customer.
Supply-chain management is the management of such a chain. Supply-chain-management software includes tools or modules used to execute supply chain transactions, manage supplier relationships, and control associated business processes. Supply-chain event management SCEM considers all possible events and factors that can disrupt a supply chain. With SCEM, possible scenarios can be created and solutions devised. In many cases, the supply chain includes the collection of goods after consumer use for recycling.
Why supply chain management is important in aerospace and defense
Including third-party logistics or other gathering agencies as part of the RM re-patriation process is a way of illustrating the new endgame strategy. Supply-chain management is a cross-functional approach that includes managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end consumer.
As organizations strive to focus on core competencies and become more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other firms that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing managerial control of daily logistics operations.
Less control and more supply-chain partners lead to the creation of the concept of supply-chain management. The purpose of supply-chain management is to improve trust and collaboration among supply-chain partners thus improving inventory visibility and the velocity of inventory movement. Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy.
In recent decades, globalization, outsourcing, and information technology have enabled many organizations, such as Dell and Hewlett Packard , to successfully operate collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities. However, with the complicated interactions among the players, the network structure fits neither "market" nor "hierarchy" categories.
From a systems perspective, a complex network structure can be decomposed into individual component firms. Therefore, the choice of an internal management control structure is known to impact local firm performance. In the 21st century, changes in the business environment have contributed to the development of supply-chain networks. First, as an outcome of globalization and the proliferation of multinational companies, joint ventures, strategic alliances, and business partnerships, significant success factors were identified, complementing the earlier " just-in-time ", lean manufacturing , and agile manufacturing practices.
Many researchers have recognized supply network structures as a new organisational form, using terms such as " Keiretsu ", "Extended Enterprise", "Virtual Corporation", " Global Production Network ", and "Next Generation Manufacturing System". Supply-chain management is also important for organizational learning. Firms with geographically more extensive supply chains connecting diverse trading cliques tend to become more innovative and productive.
Supply-Chain Management draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach. Six major movements can be observed in the evolution of supply-chain management studies: creation, integration, and globalization,  specialization phases one and two, and SCM 2. The term "supply chain management" was first coined by Keith Oliver in However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line.
The characteristics of this era of supply-chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to Japanese management practices. However, the term became widely adopted after the publication of the seminal book Introduction to Supply Chain Management in by Robert B.
Handfield and Ernest L. Nichols, Jr.
This era of supply-chain-management studies was highlighted with the development of electronic data interchange EDI systems in the s, and developed through the s by the introduction of enterprise resource planning ERP systems. This era has continued to develop into the 21st century with the expansion of Internet-based collaborative systems.
This era of supply-chain evolution is characterized by both increasing value added and reducing costs through integration. A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 1—type supply chain, systems such as production, storage, distribution, and material control are not linked and are independent of each other. In a stage 2 supply chain, these are integrated under one plan and enterprise resource planning ERP is enabled.
Advantages of Real Time Supply Chain Visibility
A stage 3 supply chain is one that achieves vertical integration with upstream suppliers and downstream customers. An example of this kind of supply chain is Tesco. It is the third movement of supply-chain-management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains beyond national boundaries and into other continents.
Although the use of global sources in organisations' supply chains can be traced back several decades e. In the s, companies began to focus on "core competencies" and specialization. They abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies.
- Sickened: The True Story of a Lost Childhood;
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- Enhanced planning and management;
This changed management requirements, as the supply chain extended beyond the company walls and management was distributed across specialized supply-chain partnerships. This transition also refocused the fundamental perspectives of each organization. Original equipment manufacturers OEMs became brand owners that required visibility deep into their supply base. They had to control the entire supply chain from above, instead of from within.
Contract manufacturers had to manage bills of material with different part-numbering schemes from multiple OEMs and support customer requests for work-in-process visibility and vendor-managed inventory VMI. The specialization model creates manufacturing and distribution networks composed of several individual supply chains specific to producers, suppliers, and customers that work together to design, manufacture, distribute, market, sell, and service a product. This set of partners may change according to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands.
Specialization within the supply chain began in the s with the inception of transportation brokerages, warehouse management storage and inventory , and non-asset-based carriers, and has matured beyond transportation and logistics into aspects of supply planning, collaboration, execution, and performance management. Market forces sometimes demand rapid changes from suppliers, logistics providers, locations, or customers in their role as components of supply-chain networks. This variability has significant effects on supply-chain infrastructure, from the foundation layers of establishing and managing electronic communication between trading partners, to more complex requirements such as the configuration of processes and work flows that are essential to the management of the network itself.
Supply-chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain-specific supply-chain expertise without developing and maintaining an entirely unique and complex competency in house is a leading reason why supply-chain specialization is gaining popularity.
Outsourced technology hosting for supply-chain solutions debuted in the late s and has taken root primarily in transportation and collaboration categories. This has progressed from the application service provider ASP model from roughly through , to the on-demand model from approximately through , to the software as a service SaaS model currently in focus today.
Building on globalization and specialization, the term "SCM 2. The growing popularity of collaborative platforms is highlighted by the rise of TradeCard 's supply-chain-collaboration platform, which connects multiple buyers and suppliers with financial institutions, enabling them to conduct automated supply-chain finance transactions.
Web 2. At its core, the common attribute of Web 2. It is the notion of a usable pathway. SCM 2.