The strategic role of Supply chain management in manufacturing industry

Topics: Supply chain management, Logistics, Supply chain Pages: 10 (2546 words) Published: April 20, 2004
I Introduction

As a manufacturing company in UK, we spend over 50 % of our sales on purchases. Because such a high percentage of an organization's costs are determined by purchasing, relationships with suppliers are increasingly integrated and long-term. Joint efforts that improve innovation, speed design, and reduce costs are common. Such efforts can dramatically improve both partners' competitiveness. Consequently, a discipline known as supply-chain management has developed.

My presentation in the form of a report will cover the following topics regarding the function of Supply Chain Management: The Strategic Role that can be associated with this function and an analysis of what is involved in the successful implementation of this role. An outline of how can SCM meet globalisation challenges.

II The definition of SCM

1.What is supply chain?

A supply chain as a whole can be viewed as the flow of water in a river: organizations located closer to the original source of supply are described as being 'upstream', while those located closer to the end customer are 'downstream'. The flow of the whole river is being concerned. In other words, supply chain is a network, which for tangible goods covers purchasing of raw materials, manufacturing, assembly and distribution of finished goods to the client.

In manufacturing, just like our company, the supply chain is the linkage for the physical movement of all materials from suppliers, through transformation, and then as finished goods for the customers.

2.What is SCM

Supply-chain management is one of the hot topics in business today. The idea is to apply a total systems approach to managing the entire flow of information, materials, and services from raw-materials suppliers through factories and warehouses to the end customers. The focus is on those core activities that a business must operate each day to meet demand.

3 The function of supply chain management

Ć Contribute to the formulation, communication and implementation of policies, strategies and plans.

Ć Contribute to the establishment and improvement of purchasing related systems.

Ć Establish and maintain a database of purchasing and stores information.

Ć Establish and develop source of supply.

Ć Acquire supplies.

Ć Provide goods and materials to internal and external customers through storage, movement, distribution and transport.

Ć Monitor and control the purchasing, supply, storage, distribution and transport chain

Ć Contribute to effective working.

III.Strategic role of SCM

The supply process acts as the bridge between core competencies and markets. The ability to manage this process along with the strategic core is crucial to market success. There is a need to contemplate the scope of strategic thinking and action at two sections. The first is the strategic role of SCM, and the second is the benefit achieved from SCM.

1. The strategic role of SCM

Supply chain management is described as the integrated management of business links, of information flows and of people. Attention is given to the whole chain from raw material supply, manufacture, assembly and distribution to the end customer. For manufacturers, operations are the heart of the supply process, and supply is not the sole criterion of competitive advantage, but it performs a crucial role in support of other strategies. Investments and longer-term developments in manufacturing are examined in relation to changes in business strategy.

The second major trend facing organizations is the demand for ever-greater levels of responsiveness and shorter defined cycle times for deliveries of high-quality goods and services.

All functions have a part to play in the development of strategy and manufacturing should be involved as well. Manufacturing is seen as a strategic resource and development of capabilities is important. This may open new market opportunities. As a result, in manufacturing companies,...
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