Q1: What is Supply Chain Management, explain briefly?
If the company makes a product from the purchased buyer part, and the product is sold to the customer, then they have a supply chain. Some supply chains are easy, while others are quite complicated. The supply chain complexity will change according to business size and complexity and the number of items generated. Supply Chain Management (SCM) stands for the term “Supply Chain Management”.
Supply Chain Management (SCM) is the management of interconnected business networks that are involved in the final provision of the product and service packs required by the end customer (Harland, 1996). Supply Chain Management covers all movements and storage of raw materials, ongoing inventory work, and finished goods from point of origin to point of use (supply chain).
Supply Chain Management (SCM)
Supply chain management (SCM) is a process used by companies to ensure their supply chain is efficient and cost-effective. The supply chain is the collection of measures taken by the company to transform the raw materials into the final product through internal operation ends with distribution of finished goods.
Supply chain management (SCM) is material, information, and monetary surveillance when they are in the process of suppliers to factories for wholesalers for retailers to consumers. Supply chain management involves coordination and integrating these streams in and between companies. Examples of supply chain activities include agriculture, refining, design, manufacturing, packaging, and transportation.
It covers vendors for raw material distributors, bringing producers to merchandise, retailers of goods, retailers, retailers and retailers to end users. Supply chains outline the value chains, because without any manufacturers they can pay anywhere they want, wherever they want, to the customers they want. Producers compete with each other through their supply chains, and there is no progress at the end of the manufacturer, which can compensate for defects in the supply chain, which will reduce the manufacturer’s capacity.
Supply Chain Management can be divided into 3 basic logistic system which is:-
1. Inbound logistic – Provide manufacturing inputs to the production such as raw materials.
2. In plant logistics – System that responsible of moving materials through production and out to distributions.
3. Outbound logistics – Physical distribution and is the logistics system that moves finish goods to the final customer, and involved parties are wholesalers, retailers and customer.
Q2: Choose one of the 5 available supply chain strategies and explain what are advantages and the disadvantages.
Vertical Integration Strategy, one company operates over a period of supply channel. The distribution channel starts with the manufacturer producing the product. Manufacturers sell their products to wholesale dealers. Total sellers sell to retailers and finally end customers. When a manufacturer directly sells the customer, it uses the vertical integration forward. When wholesale sellers or retailers produce, it uses backward integration as vertical.
Many of the companies improve relations with other parties operating at the different stages of the industry, increasing their profits and increasing commercial competitiveness due to technological developments and complexity of supply chain management over the years.
This phenomenon is defined as “vertical integration”, meaning that two or more tire supply chain lines research and development, production, price policy, packaging, marketing, under two separate product or distribution levels (or both) And distribution, so all the tags Through retail outlets in schools.
However, it is important that you know about the advantages and disadvantages associated with your company prior to using this business strategy, while some editors say that a vertical integration is important for a company’s survival, they say nothing.Here are some recent examples of vertical integration shown Figure 1: Example of Vertical Integration Industry:
? Nov 2015: Apple buys Star Wars motion-capture company Faceshift
? Nov 2015: Ikea Buys Romanian, Baltic Forests to Control Its Raw Materials
? Oct 2015: Dell makes $67bn bet on EMC in tech history’s largest acquisition. US computer giant Dell agrees to buy data storage company EMC
Figure 1: Example of Vertical Integration Industry
In addition to vertical integration, to gain greater control over the functions, enhance profitability, optimize marketing and imagine costs, it definitely provides the following benefits.
1. Advantages against other competitors
The company can achieve considerable advantages to their competitors, which prevent access to markets and resources and purchase specific assets. By following this algorithm, the company can have the same access to low resource resources, so it can be distinguished from its competitors.
By entering the vertical integration, company can override corporate overheads by violating various operations in production and distribution and integrating management. A vertically integrated company is at a low cost. As a result, users will benefit from buying low-cost items.
3.Quality of products
By entering vertical integration, the company can provide high quality products because others at the manufacturing station have a high quality control system.
4. Investment in Special Assets.
Competitions for competitive entrepreneurs are always aimed at what to do. By using this setting for your organization, you can invest and invest in the products you offer. This will help boost your business’s profits and increase market share.
5. Stability is created.
Companies that have vertical integration cannot bear economic changes from companies that do not exist. Stability made through supply chain controls eliminates uncertainty.
The lack of expertise and knowledge at a certain level and the weakness of vertical integrity may exceed its benefits with the need to eliminate the overhead deficit with various state controls in the integrated chain. Therefore, it is necessary to examine fully the evils that arise.
Vertical integration strategy requires a large capital to invest in interested companies to apply for their business, which is the amount of capital required for new operations.
2. Risks and expenses
If a vertical integration enters, the company’s risks and expenses can not be shared with third parties.
3. Flexibility decreases
Vertical integrative companies cannot follow consumer trends because they should take into consideration their established strategies without considering different factors. In addition, these companies have previously been involved in upstream or downstream investments, thus reducing their flexibility.
4. Market entry barrier.
Entry barriers in the market often occur when manufacturers control access to raw materials or control their key elements. With vertical integration, they can control competition and can create a strong market position and allow protection for business user policies. However, regulatory changes may lead to hopelessness when regulator thinks market concentrations are changing.
5. Restrict the problem.
For example, businesses require a serious ability to provide adequate delivery guarantees from underlying operations under any circumstances. Beginner business suppliers may think of revenge.
Q3: Explain what are the driving factors or reasons for making a decision to outsource one or any of the supplies in an organization.
You often asked the word “outsourcing” to be directly related to the termination of your business processes in the 3rd world’s developing countries such as Brazil, India, Brazil and the Philippines. But I must warn you that things are annoying that ‘outsourcing’ is not just about reducing the cost but will help you maintain energy in its core operations. So, before we actually start with the benefits, we need to know exactly what outsourcing. If any I do not know this, you know the basics that the reader may possibly have known, but our readers have taken me who have not been informed of some more columns.
The “outsourcing” term refers to a contract in which two or more parties, the company and outside sellers, or outsourced parties outsourcing parties to sign a contract for a certain period of time out of their operations. However, in the 21st century, Word Outsourcing Outsourcing, Outsourcing Business Process Outsourcing, Multi-Source, Outsourcing, Outsourcing, Outsourcing Business Process Outsourcing, Outsourcing Business Process, etc. Including services that include outsourcing – Includes resources for external companies. Outsourcing includes specific management services that include tax, payroll, bookkeeping, accounting, outsourcing resources, human resources, customer service, knowledge process outsourcing (KPO), data processing outsourcing, and more. Now you are well aware of the time, let’s go for its benefits:
1. Cost Optimization:
One of the most obvious reasons for choosing to outsource companies is cost factors. As a company, spending efficiency is the most important factor in improving the company’s performance. What the company is searching for is “low price, quality products”. According to a recent study conducted by the London School of Economics (LSE), 70% of the company’s outsourcing must be reduced.
2. More open source:
When you are outsourcing your work, you do not have to worry about training and hiring. You have to look at the quality of the companies and the half of your front. During outsourcing, you actually get access to skilled labor at a very low cost.
3. Save time:
Due to high-performance outsourcing programs, down turnover (dot) is very low in a project. Outsourcing has a balance between price and time. Therefore, they have deep expertise before your work is completed before the deadline. One of the main benefits is that outsourcing companies work around the clock to complete your work.
4. Fast and Better Service:
Because they are familiar with a advance technology and recent changes in the DT industry, they are mandatory to provide better service faster than the time required. The company helps the company to get good on the market. You can quickly change your ideas and add your brand value ; identity.
5. Advanced Skill ; Flexibility:
If you look at the desired growth and flexibility in working hours, I always recommend you to outsource your work. The basic reason is that you can enjoy high-quality, experienced project managers focused on each project.
6. Possibility to focus on important activities:
In most cases, people choose outsourcing to pay more attention to their basic functional activities in their business. Extra time for outsourcing helps you to focus more on research. Causes outside why outsourcing is really clear your activities are reducing the workload.
The Global Supply Chain connects the Global Supply Chain with a complete integrated global supply chain with many international product distributions. Successful international supply networks require real resilience in activities and interest with clear understanding of regional control differences.