Supply Chain Management--Case Study on Ibm

Topics: Supply chain management, Management, Logistics Pages: 8 (2365 words) Published: October 10, 2008
1.0 Introduction
All business is both customers for some other businesses' product and services, and suppliers of products and services to their own customers or other business. So no operation, or part of operation, can be seen as existing in isolation. Every operation is part of a network of suppliers and customers. In this age of international market and competition, a company's competitiveness rests on its ability to provide desired goods and services. Supply chain management is one of the hot topics in business today. Render (1997) has defines "supply chain management" is the integration of activities that procure materials and services, transform them into intermediate goods and final product, and deliver them to customers. The strategy 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 final customer. "The objective of supply chain management is to synchronize the requirements of the final customer with the flow of materials and information along the supply chain in order to reach a balance between high customer satisfaction/service and cost."(Markland, 1998) therefore the goals of supply chain management are to reduce uncertainty and risks in the supply chain, thereby positively affecting inventory levels, cycle time, processes, and ultimately, end-customers service levels. The report will be under the case to finding the differences between strategic supply chain management and traditional purchasing and supply management; discuss and analyze the contribution of supply chain management to the success of this case organization and the practical implication of the supply chain management approach for operations managers in this case organization.

2.0 Case review
The title of this case is "IBM used backward placement to improve supply-chain operations." The IBM PC Company Europe is facing relentless pressure from formidable competitors who frequently cut prices, tout rapid customer order response times, and continually introduce new products and features. In light of these pressures and record losses as a corporation, IMB needed to reduce operational costs and inventory and improve customer service. One of the targets of improvement efforts was the largest of the IBM personal computer plants, a 1.3-million-square-foot factory in Greenock, Scotland. The plant, consisting of manufacturing, warehousing, and storage areas, annually accounted for 1.2 million PCs delivered to Europe, the Middle East, and Africa. Management decided to examine the supply chain between the plant and customers to determine whether improvements could be made. Supply chain management and logistics gives managers an outline of the elements within each discipline, which together can improve competitiveness. Logistics is a term that refers to the management functions that support the complete cycle of material flow: from the purchase and internal control of production materials; to the planning and control of working-in-process; to purchasing, shipping, and distribution of the finished product. Many elements must be effectively managed within a company's total logistic system. It might include transportation, facilities, procurement and purchasing, packaging, warehousing and storage, inventory planning and control, demand forecasting, customer services, order processing, and salvage and crap disposal, and so on. Distribution is an important part of supply chain elements, Krajewski (1999) has defined distribution as "the management of the flow of materials form manufacturers to customers and from warehouses to retailers, involving the storage and transportation of products." It involved three elements, which are placement of finished goods inventory, selection of transportation mode, and scheduling routing and carrier selection. In this case, it is more focus on the potential area for improvement was inventory placement....

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