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OPERATION MANAGEMENT
MBA 205
REFLECTION PAPER
SUPPLY CHAIN MANAGEMENT
Submitted by:
Chema C. Paciones
Submitted to:
Dr. Rubi Ana Saludario
Professor
December 2020
The Fundamentals of Supply Chain Management course has taught me that you need
to start with a business strategy. You need to have a strategic approach for planning and
acquiring organizational needs through effective management of the supply base. It defines the
requirements of its internal customer (engineering, marketing, etc.) and how to acquire those
requirements. SCM is effective with the help of cross-functional teams to achieve organizational
goals. Defining value-based outcomes through a supply chain strategy, will build supporting
cross-functional metrics to view the business holistically, and then define the supporting
processes. Effective supply chain processes can improve economies, minimize environmental
impact, and improve the overall customer satisfaction. The only costs associated with
mismanagement or lack of supply chain management can lead to business failure.
Supply chain management (SCM) is the active management of supply chain
activities to maximize customer value and achieve a sustainable competitive advantage. It
represents a conscious effort by the supply chain firms to develop and run supply chains in the
most effective & efficient ways possible. Supply chain activities cover everything from product
development, sourcing, production, and logistics, as well as the information systems needed to
coordinate these activities.
It is said that the ultimate goal of any effective supply chain management system is to
reduce inventory (with the assumption that products are available when needed).
A supply chain is the collection of steps that a company takes to transform raw components
into the final product. The following are five basic components of SCM.
Plan - The first stage in supply chain management is known as plan. A plan or strategy
must be developed to address how a given good or service will meet the needs of the
customers. A significant portion of the strategy should focus on planning a profitable
supply chain.
Develop is the next stage in supply chain management. It involves building a strong
relationship with suppliers of the raw materials needed in making the product the
company delivers. This phase involves not only identifying reliable suppliers but also
planning methods for shipping, delivery, and payment.
Make - At the third stage, make, the product is manufactured, tested, packaged, and
scheduled for delivery. This is the manufacturing step. Supply chain managers schedule
the activities necessary for production, testing, packaging and preparation for delivery.
This is the most metric-intensive portion of the supply chain - one where companies are
able to measure quality levels, production output and worker productivity.
Deliver- Then, at the logistics phase, customer orders are received and delivery of the
goods is planned. This fourth stage of supply chain management stage is aptly named
deliver. This is the part that many SCM insiders refer to as logistics, where companies
coordinate the receipt of orders from customers, develop a network of warehouses, pick
carriers to get products to customers and set up an invoicing system to receive
payments.
Return- The final stage of supply chain management is called return. As the name
suggests, during this stage, customers may return defective products. The company will
also address customer questions in this stage. This can be a problematic part of the
supply chain for many companies. Supply chain planners have to create a responsive
and flexible network for receiving defective and excess products back from their
customers and supporting customers who have problems with delivered products.
SCM is a concept, “whose primary objective is to integrate and manage the sourcing,
flow, and control of materials using a total systems perspective across multiple functions and
multiple tiers of suppliers” (Monczka, Trent and Handfield, 1994).
Supply chain management (SCM) is the oversight of materials, information, and
finances as they move in a process from supplier to manufacturer to wholesaler to retailer to
consumer. Supply chain management involves coordinating and integrating these flows both
within and among companies.
This was the revolutionized form of the Barter system and today it is known as the supply chain
management.
Supply chain management flows can be divided into three main flows:
The product flow includes the movement of goods from a supplier to a customer, as well
as any customer returns or service needs.
The information flow involves transmitting orders and updating the status of delivery.
The financial flow consists of credit terms, payment schedules, and consignment and
title ownership arrangements.
There are two main types of SCM software: planning applications and execution applications.
Planning applications use advanced algorithms to determine the best way to fill an
order.
Execution applications track the physical status of goods, the management of materials,
and financial information involving all parties.
VIEWS ON SUPPLY CHAIN MANAGEMENT
CYCLE VIEW
Each cycle occurs at the interface between two
successive stages:
Customer order cycle (customer-retailer)
Replenishment cycle (retailer-distributor)
Manufacturing cycle (distributor-
manufacturer)
Procurement cycle (manufacturer-
supplier)
Cycle view clearly defines processes
involved and the owners of each process.
Specifies the roles and responsibilities of
each member and the desired outcome
of each process.
Key Features of Supply Chain Management
Supply chain softwares are robust, feature-rich technology softwares that enhance
operations from end-to-end. Today’s popular supply chain softwares can help companies
achieve and maintain a competitive edge by empowering them to streamline and enhance their
most important supply chain operations from start to finish. With supply chain software in
place, organizations can maximize cost-efficiency, increase productivity, and give their bottom
line a big boost. This functionality is designed to fully automate and support supply chain
processes from end-to-end, and includes:
Inventory Management
With a supply chain package, companies can significantly improve the way they track and
manage their supplies of raw materials and components needed for production, finished goods
to satisfy open sales orders, and spare parts required for field service and support. This
eliminates excess and waste, frees up valuable real estate for other important purposes, and
minimizes related storage costs.
Order Management
Supply chain software can dramatically accelerate the execution of the entire order-to-delivery
cycle by helping companies to more productively generate and track sales orders. Supply chain
also enables the dynamic scheduling of supplier deliveries to more effectively meet demand,
and more rapid creation of pricing and product configurations.
Procurement
All activities and tasks associated with sourcing, purchasing, and payables can be fully
automated and streamlined across a company’s entire supplier network with a supply chain
software package. As a result, businesses can build stronger relationships with vendors, better
assess and manage their performance, and improve negotiations to leverage volume or bulk
discounts and other cost-cutting measures.
Logistics
As companies expand globally, their supply chains become more and more complex. This makes
the coordination of the numerous warehouses and transportation channels involved quite a
challenging endeavor without supply chain software in place. With supply chain, businesses can
improve on-time delivery performance and boost customer satisfaction by achieving complete
visibility into how finished goods are stored and distributed, regardless of the number of
facilities or partners that participate.
Conclusion
Supply chain management is an exciting and important area of study. Large companies like
coca-cola are able to save the world’s leading businesses large amounts of money, time and
effort by creating an effective supply chain management.
