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Supply chain refers to the network of organizations that are involved, through upstream and
downstream linkages, in the different processes and activities that produce value in the form of
products and services in the hands of the ultimate customer or consumer" (Lysons and
Farrington, 2006, p. 91). On the other hand as a comparison
Supply chain management (SCM) is the systemic, strategic coordination of the traditional
business functions and the tactics across business functions within a particular enterprise and
across businesses within the supply chain, for the purposes of improving the long-term
performance of the individual enterprises and the supply chain as a whole (Mentzer et al., 2001,
p. 18).
Typically supply chain management integrates the functions of procurement, logistics,
warehousing, transport and distribution within an enterprise and extends to the same functions in
other entities that do business with the enterprise. The flow of information along the supply chain
is critical for the coordination and integration processes to be effective. (Lysons and Farrington,
2006, p. 20)
no longer expect that the objective of business can be met just by becoming efficient in itself. As
indicated by Hameri and Palsson, process rationalization and measurement system would need
to be implemented to improve the operational efficiency inside a company by reducing lead times
and by partnering with upstream and downstream players of the supply chain. The situation
requires that for value to reach the customers, efficiency must be evident even in the suppliers,
the distribution channel, and all associated activities and partners. Competition is no longer
between individual businesses, but between groups of companies that are linked together in a
chain for delivering customer value (Hameri and Palsson 2003pg 55).
As a result, performance of any entity in a supply chain depends on the performance of others,
and their willingness and ability to coordinate activities within the supply chain. A global economy
and increase in customer expectations regarding cost and service have influenced
manufacturers to strive to improve processes within their supply chains, often referred to as
supply chain re-engineering (Swaminathan, 1996 pg 61).
Logistics Management
Logistics Management is that part of Supply and demand Chain Management that plans,
implements, and controls the efficient, effective, forward, and reverse flow and storage of goods,
services, and related information between the point of origin and the point of consumption in
order to meet customers' requirements (Levitt, 1965 p 80).
Better consistency of scheduling and consistency of employee work hours. If there is no demand
for a product at the time, workers don't have to be working. This can save the company money
by not having to pay workers for a job not completed or could have them focus on other jobs
around the warehouse that would not necessarily be done on a normal day (Hirano and Makota,
2006 pg 56).
Increased emphasis on supplier relationships. No company wants a break in their inventory
system that would create a shortage of supplies while not having inventory sit on shelves. Having
a trusting supplier relationship means that you can rely on goods being there when you need
them in order to satisfy the company and keep the company name in good standing with the
public (Hirano and Makota, 2006 pg 56).
Supplies continue around the clock keeping workers productive and businesses focused on
turnover. Having management focused on meeting deadlines will make employees work hard to
meet the company goals to see benefits in terms of job satisfaction, promotion or even higher
pay (Hirano and Makota, 2006 pg 56).
As noted by Liker (2003) and Womack and Jones (2003), it would ultimately be desirable to
introduce synchronised flow and linked JIT all the way back through the supply stream. However,
none followed this in detail all the way back through the processes to the raw materials. With
present technology, for example, an ear of corn cannot be grown and delivered to order. The
same is true of most raw materials, which must be discovered and/or grown through natural
processes that require time and must account for natural variability in weather and discovery.
The part of this currently viewed as impossible is the synchronized part of flow and
the linked part of JIT. It is for the reasons stated raw materials companies decouple their supply
chain from their clients' demand by carrying large 'finished goods' stocks. Both flow and JIT can
be implemented in isolated process islands within the raw materials stream. The challenge then
becomes to achieve that isolation by some means other than the huge stocks they carry to
achieve it today.
It is because of this almost all value chains are split into a part which makes-to-forecast and a
part which could, by using JIT, become make-to-order. Often, historically, the make-to-order part
has been within the retailer portion of the value chain. Toyota's revolutionary step has been to
take Piggly Wiggly's supermarket replenishment system and drive it back to at least half way
through their automobile factories. Their challenge today is to drive it all the way back to their
goods-inwards dock. Of course, the mining of iron and making of steel is still not done specifically
because somebody orders a particular car. Recognizing JIT could be driven back up the supply
chain has reaped Toyota huge benefits and a world dominating position in the auto industry.
It should be noted that the advent of the mini mill steelmaking facility is starting to challenge how
far back JIT can be implemented, as the electric arc furnaces at the heart of many mini-mills can
be started and stopped quickly, and steel grades changed rapidly (Goldratt and Fox1986 pp
166).
management function which co-ordinates and controls wide spread quality activities with a view
to achieving the desired quality of the end-product (Levitt, 1965 p 155).
The quality cycle begins and ends with the user. It starts when the user's needs are analyzed to
design a product for its fulfillment. During development and manufacturing of a product, various
departments and sections of the company make their contribution in building quality into it. The
cycle ends with the user because the final proof of product quality comes during its services with
the user, whose satisfaction is the ultimate aim. In this concept, quality is no longer the exclusive
domain of the inspectors. Designers, process planners, production engineers and even sales
personnel have their role to play in the achievement of the primary quality objective, which is
maximum user satisfaction at minimum cost. All in all, quality is never an accident; it is always
the result of an intelligent effort. So there must be the will to produce a superior thing (Levitt,
1965 p 135).
References
Bhote, K. R. (1989). Motorola's long march to the Malcolm Baldrige National Quality
Award, National Productivity Review, 8(4), pp. 365-376.
Box, J. (1983) Extending product lifetime: Prospects and opportunities, European Journal
of Marketing, vol 17, 1983, pp 34-49.
Cooper, M.C., Ellram, L.M. (1993), "Characteristics of supply chain management and the
implications for purchasing and logistics strategy", The International Journal of Logistics
Management, Vol. 4 No.2, pp.13-24.
D'Amours, S., Montreuil, B., Lefrancois, P., Soumis, F. (1999), "Networked manufacturing:
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an invited lecture by Korean Standards Association at Seoul. (She is a senior lecturer at
Motorola University.)
Levitt, T. (1965) Exploit the product life cycle, Harvard Business Review, vol 43,
November-December 1965, pp 81-94.
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