Supply chain management consists of firm collaborating to leverage strategic positioning and to improve operating efficiency. Within a firm’s supply chain mgt, logistic is the work required to move and geographically position inventory. The supply chain mgt is driving the world’s major global companies. Ten years ago, the typical supply chain for manufacturing companies was domestic. Today-thanks to the migration of manufacturing to China and other lower-cost countries-it's just as likely to be global.
Since globalization supply chain management is a relatively new field, changes are taking place all of the time. Many of the changes are technological in nature. We can expect a continued increase in the use of enterprise resource planning (ERP) systems that link all business decision-making to a unified database. Radio frequency identification (RFID) technology is dramatically changing the way products are tracked and secured through the supply chain. Global Positioning Systems (GPS) are enabling transportation companies to better track trucks, trains, and ships moving goods in the supply chain.
Adding some buffer to Just-in-Time:
Back when many manufacturers' supply chains spanned no more than a few hundred miles, it wasn't unusual for automotive OEMs and other manufacturers to keep a mere day or two of safety stock on hand. After all, many of their lead times were measured in hours. Most of their transportation providers were known quantities. And, the routes and infrastructure they used were highly familiar and time-tested.
Today, that kind of lean inventory is a luxury most companies can't afford, because timely deliveries from global sources depend upon a far wider variety of factors that a manufacturer can't always predict or control. As a result, many companies now opt to keep several weeks rather than several days of inventory on hand at any given time. As a corollary, they're also less inclined to see warehousing as a sign of slack in the supply chain-as it was regarded by many in the late '90s-and more inclined to view it as a strategic way to offset supply chain volatility.
Many contingency plans now include (or should include) a budget for airfreight: In addition, historically, many companies have brought in container shipments from Asia Pacific through the ports in southern California. As the volume of container shipments has increased, all of these ports have experienced capacity issues relating to customs clearance and transshipping. As a result, some companies are contemplating rerouting these inbound shipments to alternate ports. This change may seem subtle, but a shift in logistics of this magnitude has far-reaching effects on the overall cost and efficiency of the supply chain network. Dynamically repositioning the point of entry for inbound container shipments can have a positive impact on customs clearance times and access to increased transportation capacity, however there can be a negative impact as well. Airfreight historically has been the least-used mode of transportation in the global supply chain because of its higher expense. However, events such as the 2004 peak season congestion have demonstrated that there are times when modal flexibility can be very advantageous. Just as important, there are occasions when speed is far more important than transportation cost, especially if the lack of parts is going to shut down a production line. Just as it's unrealistic for any competent company to operate without a set of supply chain contingency plans, it is inadvisable for most companies not to budget for the use of at least some airfreight in contingency situations.
The future for Globalization Supply Chain Management looks very bright. This year, as well as last year, two major trends are benefiting Supply Chain Management operations. These are · Customer service focus
· Information technology
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