suppliers that focuses on maximizing value to the ultimate customer
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The Supply Chains
Strategic Importance Supply chain management is the integration of the activities that procure materials and services, transform them into intermediate goods and final products, and deliver them through a distribution system
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Creating the logistic vision
The pupose of making logistic vision statement is to give a clear indication of the basis whereby a business tends to build a position of advantage through close customer relationships Making service happen is the ultimate challenge How to create value to the customers via logistics and scm A logistic vision should provide a roadmap for how better,faster and cheaper are to be achieved. 2011 Pearson Education, Inc. publishing as Prentice Hall
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Problems with conventional
organization 1.
Inventories build up at functional boundaries:if individual
functions are encouraged to optimize their own costs of the budgeting system then this will often be at the expense of increased inventory across the system as a whole
2.
Pipeline costs are not transparent:conventional organization
will normally only identify costs on a functional basis.It is a poblem bacause the costing systems are designed to monito functional or input costs rather than flow or output costs
3.
Functional boundaries impede process management:the ideal
way to manage a logistic process is as a complete system not by fragmenting it.to achieve a smooth flowing logistics pipeline requires an orientation that facilitates end to end process management
4.
Conventional organization present many faces to the customer
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Developing the logistic
organization Creating a higher level of authority in the form of a logistic function that links together purchasing,production and distribution tasks. Converting conventional vertical organization to horizontal or market facing business Impoving the customer order management 1.Eliminate the non value added activities 2.Order fulfilment groups 2011 Pearson Education, Inc. publishing as Prentice Hall
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Logistic as a value for
change As markets technologies and competitive forces change at ever increasing rates the imperative for organizational change becomes more pressing. the driving force for the organizational change is logistics. Shift from a functional focus to process focus
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The need for integation
Process integration both upstream and downstream, the collabaration between buyers and suppliers, joint poduct development, common systems and shared information 1.Supply chain rationalization(decrease in no. of suppliers and components but increase in system) 2.Supplier development program(cross functional team will work closely with suppliers to seek improvements) 3.Early supplier involvement in design(cost effective designs can be created) 4.Integrated information systems(no orders,no delivery notes.only single information) 5.Centralization of inventory( the dealers will have only demo models and the orders will be fulfilled later on from the centralized system 2011 Pearson Education, Inc. publishing as Prentice Hall
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Managing the supply chain
as a network 1. Collective strategy development(network members must collectively agree strategic goals for the network and the means of attaining them) 2. Win win thinking(all partners should benefit and be better off as a result of cooperation) 3. Open communication(transparency by which cost data is shared upstream
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Co-makership and logistics partnerships
The development of long term relationship with a limited no. of suppliers on the basis of mutual confidence Benefits: 1. Shorter delivery lead times 2. Reliable delivery promises 3. Less schedule disruption 4. Lower stock levels 5. Faster implementation of design change 6. Fewer quality problems 7. Stable competitive prices 8. Orders given higher priority 2011 Pearson Education, Inc. publishing as Prentice Hall
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Supply Chain Management
Important activities include determining 1. Transportation vendors 2. Credit and cash transfers 3. Suppliers 4. Distributors 5. Accounts payable and receivable 6. Warehousing and inventory 7. Order fulfillment 8. Sharing customer, forecasting, and production information 2011 Pearson Education, Inc. publishing as Prentice Hall
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2011 Pearson Education, Inc. publishing as Prentice Hall