What is the objective of the supply chain Management?
The objective of supply chain
management is to maximize the overall value of the total business process.
What is the value that Supply chain Management brings to the business?
The difference of the final
product value which served to customer and the initial cost of the good is the
value that generated in the total business process. Other than the cost of
materials any business has to invest in assets, processes, systems, information
and also for innovations to increase the core value of the product and also to
delight the customer.
If we take the garment manufacturing it may the difference of total cost of the fabric and trim value and the FOB price of the garment. Yes how much the value generate from those three ways to convert those materials to final product. Not only that it may be added value that vendor created to make that product more customize
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ReplyDeleteMaximize overall value generated
ReplyDeleteLook for resources, revenue & cost
Cost Quality improvement
Shortening lead-times
To meet end consumer needs
To achieve world class performance
To optimize pre & post production inventory levels
Reduce transportation cost
Greater labour, equipment & space efficiency
Supply Chain Management is the design, planning, execution, control and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply chain demand, and measuring performance globally.
ReplyDeleteSupply chain objective is not only increase value but also selecting a best valued supplier whos has less price and high quality products. If the supplier with high price we will never integrate hence after selecting a best supplier we integrate the processes, methods and system to increase further value in both supplier and customer business
ReplyDeleteThank you for your valuable comment , supplier selection is the 1st step of Supply chain management. In the supplier selection we may consider the price,quality,lead time and also reliability and delivery method and brand reputation. After selecting the best supplier we should integrate with them and need to improve total inputs, system and output operations by increasing value, that value should be measurable in qualitatively and quantitatively.
ReplyDeleteI also think a key supply chain feature is to understand a mechanism on how we evaluate our strategic key suppliers on a periodical basis.
ReplyDeleteHaving set criteria's would help to analyze the performance of the selected suppliers and it would be the best indication to see how we could continuously work with a given supplier to make sure all suppliers are 'A' Grade suppliers.
This would also create a competitive environment and create a positive competition among the chosen suppliers.