Introduction

The best companies around the world are discovering a powerful new source of competitive

advantage. It's called supply-chain management and it encompasses all of those integrated

activities that bring product to market and create satisfied customers. The Supply Chain

Management Program integrates topics from manufacturing operations, purchasing,

transportation, and physical distribution into a unified program. Successful supply chain

management, then, coordinates and integrates all of these activities into a seamless process. It

embraces and links all of the partners in the chain. In addition to the departments within the

organization, these partners include vendors, carriers, third party companies, and information

systems providers.

Within the organisation, the supply chain refers to a wide range of functional areas. These

include Supply Chain Management-related activities such as inbound and outbound

transportation, warehousing, and inventory control. Sourcing, procurement, and supply

management fall under the supply-chain umbrella, too. Forecasting, production planning and

scheduling, order processing, and customer service all are part of the process as well.

Importantly, it also embodies the information systems so necessary to monitor all of these

activities.

Simply stated, "The supply chain encompasses all of those activities associated with moving

goods from the raw-materials stage through to the end user." Advocates for this business

process realised that significant productivity increases could only come from managing

relationships, information, and material flow across enterprise borders. One of the best

definitions of supply-chain management offered to date comes from Bernard J. (Bud)

LaLonde, professor emeritus of Supply Chain Management at Ohio State University.

LaLonde defines supply-chain management as follows: "The delivery of enhanced customer

and economic value through synchronised management of the flow of physical goods and

associated information from sourcing to consumption.”As the "from sourcing to

consumption" part of our last definition suggests, though, achieving the real potential of

supply-chain management requires integration--not only of these entities within the

organisation, but also of the external partners. The latter include the suppliers, distributors,

carriers, customers, and even the ultimate consumers. All are central players in what James E.

Morehouse of A.T. Kearney calls the extended supply chain. "The goal of the extended

enterprise is to do a better job of serving the ultimate consumer”, Superior service, he

continues, leads to increased market share. Increased share, in turn, brings with it competitive

advantages such as lower warehousing and transportation costs, reduced inventory levels, less

waste, and lower transaction costs. The customer is the key to both quantifying and

communicating the supply chain's value, confirms Shrawan Singh, vice president of

integrated supply-chain management at Xerox. "If you can start measuring customer

satisfaction associated with what a supply chain can do for a customer and also link customer

satisfaction in terms of profit or revenue growth," Singh explains, "then you can attach

customer values to profit & loss and to the balance sheet."

Task 1: Understand the relationship between supply chain management (SCM) and

organisational business objectives

Task 1.1: Explain the importance of effective supply chain management in achieving

organisational objectives

In the ancient Greek fable about the tortoise and the hare, the speedy and overconfident rabbit

fell asleep on the job, while the "slow and steady" turtle won the race. That may have been

true in Aesop's time, but in today's demanding business environment, "slow and steady" won't

get you out of the starting gate, let alone win any races. Managers these days recognise that

getting products to customers faster than the competition will improve a company's

competitive position. To remain competitive, companies must seek new solutions to

important Supply Chain Management issues such as modal analysis, supply chain

management, load planning, route planning and distribution network design. Companies must

face corporate challenges that impact Supply Chain Management such as reengineering

globalisation and outsourcing. Why is it so important for companies to get products to their

customers quickly? Faster product availability is key to increasing sales, says R. Michael

Donovan of Natick, Mass, a management consultant specialising in manufacturing and

information systems. "There's a substantial profit advantage for the extra time that you are in

the market and your competitor is not," he says. "If you can be there first, you are likely to

get more orders and more market share." The ability to deliver a product faster also can make

or break a sale. "If two alternative products appear to be equal and one is immediately

available and the other will be available in a week, which would you choose? Clearly,

"Supply Chain Management has an important role to play in moving goods more quickly to

their destination."

An example of a Supply Chain Management application:

To Reduce Cycle Time, Kick Those Bad Habits. One of the chief causes of excessive order-

to-delivery cycle times is the existence of longstanding "bad habits" that result when

companies fail to revise internal processes to reflect market changes. The existence of

separate, independent departments tends to perpetuate these inefficient practices. Taking the

supply-chain management view, on the other hand, helps companies identify the cumulative

effects of those individual procedures. Eliminating such bottlenecks improves product

availability and speeds delivery to customers--both of which can increase sales and profits.

The case: Consultant R. Michael Donovan illustrates the point with the tale of a client that

manufactures a made-to-order machine part. Average order-to-delivery time varied between

six and nine weeks. As a result, the manufacturer was losing business to "replicators" that

could produce low-quality "knockoff" versions in just three weeks. Donovan and his

colleagues analyzed the manufacturer's entire supply chain, from order entry and raw-

materials supply all the way to final delivery.

They found problems at every step of the way: Handwritten orders were being rekeyed

into the materials-planning system on weekends, which meant that some orders were sitting

around unprocessed for an entire week. On Monday mornings, production control would be

overwhelmed with a week's worth of orders. It often took them several days to plough

through the backlog and issue manufacturing orders.

Once those orders had been cut, the engineering department required one week to produce

technical drawings. They needed several more days to match up drawings with orders and

other documentation. Those information packets then would go to the manufacturing line,

where the scheduling system allowed three weeks' time for production. "Orders could be

sitting there for almost three weeks before going into production, even though the actual time

required to produce an item ranged from a few hours to one full day," Donovan recalls.

The solution: Supply Chain experts were able to slash order-processing time, including the

generation of engineering drawings, from about two and a half weeks to one day. They made

some alterations to the manufacturing process to speed up production. While they were

cutting waste out of physical processes, the consultants also were finding ways to speed up

the flow of information and to improve the accuracy of production orders. Today, materials

flow is closely correlated with information flow, and lead-times have been cut from an

average of six to nine weeks down to fewer than three weeks.

The payoff: The payoff has been enormous. Instead of steadily losing market share to the

replicators, the manufacturer has doubled sales volumes. It has reaped an added benefit as

well, because quality remains very high, the manufacturer has been able to charge more for

its products, generating even greater profits. Donovan proudly notes that this radical change

was achieved with technologies the manufacturer already had. "We didn't change the

technology, we just changed how it was applied," he says. "The magic is not in the software.

Information technology should not be the driver of re-engineering the order-to-delivery

process," he concludes. "It should enable you to achieve your objectives."

Task 1.2: Explain the link between supply chain management and business functions in

an organisation

SCM and outsourcing have both been given increasing attention since their applications were

recognised by many as significant profit and performance enhancers. Every business is a part

of a big SC and supply network (Handfield and Nichols, 1999). Nevertheless, the

management of a company could choose to either;

a) Implement only SCM, or

b) Implement only outsourcing or

c) Implement both outsourcing and SCM.

The decision to apply either outsourcing or SCM or even both rests on the management’s

readiness to face the consequences each application brings. As outsourcing may increase

organisation’s operating flexibility and allows the transfer of operational risks to another

party, SCM though utilises more resources in a way gives the organisation direct involvement

with each stage of every processes and functions, and thus allowing clearer view and direct

control for improvements. A fine example of situation (a) is a big company which has it all;

from the acquiring of resources from mother earth, manufacturing, processing, delivering and

finally the delivery of the final product to the end customer. It may not reside on one big area

but scattered around, but the asset and management of all processes however trivial are the

company’s own responsibility and done by its own staff. A company may choose not to

embark in the management of SC; the reasons may range from inadequacy of assets or

expertise, to the nature of businesses they are in. It may however at that time outsource a

number of the company’s functions, such as those perceived as non-core activities like

cleaning, maintenance of buildings and so forth. These are the cases where outsourcing

function stands individually to the respected companies, though they may be involved in a SC

managed by another organization.

Increasing number of companies however has adopted a strategy which led to the outsourcing

of more activities to suppliers (McIvor, 2003). This strategy has resulted in the company

becoming a ‘systems integrator’, in which it manages and coordinates a network of best

production and service providers. Such strategy is based on the premise that the company

should outsource those activities (both production and service) where it can develop no

strategic advantage, with the supply base comprising a network of specialist focusing on their

distinct area of competence delivering products and services to the systems integrator.

Therefore, it may be seen that the growing practice of outsourcing by a company could in the

end lead to the implementation of SCM. This could be further encouraged by the intensifying

competition among industry players, and the widening trend of supply network competing

against other supply networks rather than single entity or company against others.

Interestingly, a company which has only been practicing SCM could also in the end exercise

both SCM and outsourcing. In a broad sense, SCM may also simply mean to ‘manage a SC’.

Where this is the condition, an SCM itself can be outsourced by a company to another,

whereby the management of all external processes, information and material flows and so

forth to meet the main company’s needs become the SC manager’s responsibility. The main

company shall then focus on its internal core processes while monitoring the performance of

SC manager, by setting a certain standard in which the service provider will have to meet. In

this situation, the SLA will become vital in the relationship.

Outsourcing may also be one of the important tools for a company practicing SCM to reap as

much benefits as possible. Whether outsourcing opens the door to practicing SCM and/or

plays a beneficial role to make SCM more effective and efficient, or; the other way round,

relies entirely on the practice and perception of a company.

Task 1.3: Discuss the key drivers for achieving an integrated supply chain strategy in an

organisation

There are some key drivers which will help the organization to achieve an integrated supply

chain which are following:

Customer service management process: Customer service management process is concern

with the organization and its customers. Because customer service is the main cause of

customer information.

Customer service management provides the customer through real time information on

arrangement and product accessibility during interfaces with the organization’s manufacture

and distribution operations.

Good organization uses the following steps to build customer relations:

Verify jointly pleasing goals for organization and customers

Set up and preserve customer relationship

Produce optimistic feelings in the organization and the customers

Procurement process: Strategic tactics are drawn up with suppliers to maintain the

manufacturing current management procedure and the growth of new products. In

organization where operations expand internationally, source has to manage on a

international basis. The preferred result is a win-win connection where both parties take

benefit from each other, and a decrease in time which is required for the design series and

product.

Task 2: Be able to use information technology to optimise supplier relationships in an

organisation

Task 2.1: Evaluate the effectiveness of strategies used by an organisation to maintain

supplier relationships

Efficient management of suppliers is the important way for manufacturing companies can

advance their performance. There are many significant aspects of supplier management; they

incorporate sourcing strategies, and the way relationships are managed and the information

exchange policies adopted by manufacturers. Characteristically, it has been discussed in the

original script that close relationships with suppliers should be urbanized, in contrast to the

conventional price-driven transactional relationship. The research found that noteworthy

portion of the companies surveyed had experienced an alteration in their relationship with

suppliers for past few years. even though the companies had urbanized partnerships with

some of their supplier the mainstream of firms sustained to favour a multi-sourcing policy.

The research results have implications for manufacturing companies as they point out the

potential for development from side to side the superior acceptance of best practices in the

area of supply chain management.

Steps assessors must take to better evaluate strategic supplier relationships:

1. Segment the entire supplier base into several strata based on enterprise need, size of

spend, criticality of supply, etc.

2. Develop programs that are appropriate to each of those segments.

3. Apply tools which recognize the importance of the top tier representing the most

strategic set of suppliers to the organization. While smaller in number, this segment

comprises the more complex, higher value suppliers where measurement scorecards

must evaluate the performance, value and risk within these relationships.

Task 2.2: Use information technology to create strategies to develop an organisation’s

relationship with its suppliers

As search costs and other coordination costs turn down, theory predicts that firms should

optimally amplify the customers of the business. Because of decrement in the costs due to IT,

there is little proof of an augment in the existing of suppliers used. This elaborate that other

force must be used for in a more complete replica of buyer supplier relationships. So there are

many technologies which are using by the organization to develop relationship with their

suppliers which are following:

Analyze actual time information about market trends sales and orders.

Predict and respond rapidly to changes in demand.

Develop efficiency with concern to precise information on supply.

E-collaboration with the suppliers, like, using email and giving out spreadsheets, can be

simple, but the most profit approach from sharing information in real time. This approach

requires more refined technology, which are following Forecasting systems or inventory

planning, this means use their inventory records to predict the market demand for their

product.

Online analytical processing systems: This system analyzes the history sales performance

and evaluates the forecasts from different suppliers.

Enterprise resource planning systems: ERP system plan and programmed their entire

business. By connecting their order and purchasing system with that of their suppliers, orders

can frequently be placed and tracked and the supplier can issue the invoice.

These technologies are helping the organization to make good relation with their suppliers.

Task 2.3: Develop systems to maintain an organisation’s relationship with its suppliers

Case Study of a maintaining organization’s relationship with suppliers:

The following case study shows how a supplier development tool is being used to evaluate

the performance & value in the relationships of a global company with a key category of

strategic suppliers: In an effort to increase performance and optimize expenditures,

“Enterprise X” (not their real name) decided to focus its attention specifically on improving

the effectiveness of the bottom 20% of its high value, strategic supplier segment.

To accomplish this task, it turned to a supplier development solution to identify and optimize

the relationships with their strategic suppliers that had critical working relationships with

their various business divisions. The enterprise’s mid-level managers collected feedback

using scorecards for each strategic supplier within their assigned sub-category. The

scorecards included information on each supplier’s ability to meet stated business objectives,

as well as performance & value feedback collected from both business and supplier personnel

regarding the status of their working relationships. The supplier development scorecards

combined raw business data (including sales, supplier financials and business objectives)

with performance and value related information such as:

Rating scores from both internal and supplier employees regarding their perception of

their working relationships.

Those suppliers that had re-engineered their business systems in the past year to meet

the company’s needs and the results that were achieved.

The suppliers that had demonstrated the highest and lowest level of performance

relative to their projects.

Specific contributions made by each supplier in meeting their quality objectives

during the past year.

Financial stewardship, both in optimizing costs and improving efficiencies.

On request, scorecards from each mid-level manager were aggregated into a single sortable

report that provided the executive team with the ability to rank their suppliers. This allowed

their senior management team to determine those that required review, those that required a

concrete action plan to improve their performance and also the high performers that deserved

recognition. The bottom 20% of suppliers (those having the lowest scores), that are unable to

improve their performance scores and incorporate the recommended improvements were

targeted for non-renewal of their contracts.

Concluding summary: The competitive nature of today’s environment requires procurement

executives to reorient their thinking regarding their strategic supplier relationships. A critical

element of supplier assessments involves measuring the way people work with each other,

including their perceptions of the performance & value within the relationship. Without this

information, enterprises cannot conduct complete and accurate assessments of the value that

their strategic suppliers contribute to the business. Unfortunately, traditional supplier contract

management solutions don’t provide the capabilities needed to focus on performance &

value. Businesses must incorporate these new tools to extend the focus from purely

operational data to performance & value-based information in order to improve their

assessment processes and build greater trust and collaboration between clients and suppliers.

Once the new processes are established, enhanced supplier relationships will have a greater

role in reducing costs, improving performance and meeting strategic business objectives.

Task 3: Understand the role of information technology in supply chain management

Task 3.1: Assess how information technology could assist integration of different parts

of the supply chain of an organisation

Tesco uses this web technology to fully integrate the supply chain.

Internet: A revolutionary force: Internet had become a revolutionary force which changed

all the operations of an organization. Which includes supply chain also, the revolutions which

internet brought are:

Internet had become an important distribution channel.

Value chain activities had been made more efficient to perform.

Strengths of competitive forces are altered.

It recreated an new industry

Information technology could assist in the integration of the different parts of the supply

chain management in the organization. In dell the IT assist in the integration of the different

parts of the supply chain. There are different integrated strategies are discussed below

regarding the supply chain management in Dell.

Allocation network strategies: The issues like location of warehouse and their capacities etc

are related to the allocation network strategies. The allocation network strategy maintains the

facility that how should the information is being flowed between the management & supply

chain members i.e warehouse & retailer. It helps provide the reduction in the total holding

and logistics costs. The allocation network strategies are specifically related to the reduction

in the logistic & as well as the holding cost of the organization.

Manufacture source strategy: This strategy is the integration of the logistics and production

costs. It also related with the impact of producing in large volumes to reduce the fixed cost

for the production .but the production in heavy volume may increase the transportation cost

and the logistic cost and production in small batches is related to the high fixed but the

balance between them can be maintained by the manufacture source strategy of the

organization.

Record organizes strategy: This strategy connected with the decisions concerning the

inventory control system of the organization. Inventory control strategy includes economic

order quantity to reduce the holding and ordering costs. It also determines the quantity to be

stored. This very strategy can be used for the avoidance of over stocking and under stocking.

Income managing strategy: In the income managing strategy the price flexibility of demand

is fixed according to the market in order to maximize the revenue from sales.

Technology & choice support system: Technology is deals with each and every part of the

organization whether it is related to the inventory, production, revenue etc. so we can say that

the technology is a choice support system of the organization.

Task 3.2: Evaluate how information technology has contributed to the management of

the supply chain of an organisation

The run of foodstuffs and information between supply chain members' of the organizations is

known as Supply chain management. Information Technology helps a lot in availing the

information in organizational premises very easily. In past before 1980 the information flow

between the organizations to the second part is totally based on the paper. The paper based

method of exchanging the information is very slow. But after some time the information

technology had evolved and provides the easy method for exchanging the information

between the organization and the supply chain member. IT includes: computer,

communication technologies, etc and other hardware and services. Information flows theater

a critical role in strategic planning. Because it helps in:

Rapid procedure to information.

Good customer service.

Reduction in paper work.

Increased productivity.

Improvement in tracing and expediting

Cost efficiency.

Competitive advantage.

Enhanced/Improved billing.

After the study of these points it can easily understood that the IT plays an essential role in

supply chain management and we can also take the example of the dell (Case study of Dells

Transformation Journey through Supply chain). The above mentioned points are also related

with the dell and its supply chain management. After using IT in its supply chain

management the dell got the maximum benefits from it like:

Rapid flow of the information

Great and better customer service

Paper work reduction

Proclivity enhancement

Cost efficiency

Competitive advantage etc.

Web based technologies has a great contribution in the Enterprise Resource Planning. ERP

includes marketing, HT and financials side of the supply chain business. It helps to keep a

record for distribution activities in plants and warehouse. Besides that web based

technologies also provides aid in event management. Web based logistics planning helps in

selecting routes and schedules according to available transportation on a lane, expenditure

and client’s delivery rota. Web based technologies helps in maintaining effective customer

relationship. It involves systems that bring up to date and track customers’ information.

These systems include order tracking and similar back end arrangement to facilitate the

customers and the services advisers who are to assisting them.

So we can say that information technology has contributed to the management of the supply

chain within your organization.

Task 3.3: Assess the effectiveness of information technology in managing the supply

chain of an organisation

There are some vast impact on the organization because of the information technology here

we took the example of DELL. There are certain effectiveness of IT on the DELL that are as

follows:

DELL has successfully developed E-business solutions for improving customer

service.

Enhanced efficiency of DELL allows company personnel's to focus more on the

dangerous business activities.

E-business solutions of DELL support preparation teamwork & better quickness of

the supply chain management.

The use of E-business solutions improves the information quality of DELL. To gain strategic

benefits, the DELL uses of IT to be coupled with process re-designing. SCM & IT are the

prominent part of the DELL. IT has enabled supply chain to flourish the criteria of the supply

chain management of DELL.

Task 4: Understand the role of logistics and procurement in supply chain management

Task 4.1: Explain the role of logistics in supply chain management in an organisation

Logistics is the function responsible for all aspects of the movement and storage of materials

on their journey from original suppliers through to final customers.

Every organisation has to move materials. Manufacturers have factories that collect raw

materials from suppliers and deliver finished goods to customers; retail shops have deliveries

from wholesalers; a television news service collects reports from around the world and

delivers them to viewers. Most of us live in towns and cities and eat food brought in from the

country. When you order books from a website, a courier delivers them to your door, and

when you buy a mobile phone it has probably travelled around the world to reach you. Every

time you buy, rent, lease, hire or borrow anything at all, someone has to collect it and deliver

it to Logistics your door. Logistics is the function responsible for this movement.

On a national scale, logistics needs a huge amount of effort. China has become ‘the factory of

the world’ and exports US $100 billion of goods a month, while the internal trade of goods

within the European Union (EU) is worth more than US $2 trillion a year – and all of this has

to be moved between strings of suppliers and customers. A rule of thumb says that logistics

accounts for 10–20% of gross domestic product (GDP), so the USA’s GDP of US $13

trillion1 might include US $2 trillion for logistics. The 30 members of the Organisation for

Economic Co-operation and Development (OECD) have a combined GDP of US $40

trillion2 and might spend US $6 trillion on logistics. Despite this effort, we hardly notice

logistics as it goes about its business, but sometimes you might notice the lorries driving

down a motorway, visit a shopping mall, drive through a trading estate, see a container ship

unloading, fly from an airport, or have a parcel delivered by a courier service. These are the

visible signs of a huge industry that employs millions of people and costs billions of dollars a

year. In this book, we describe this complex function, seeing exactly what it involves and

how it can be managed. Logistics manages the flow of inputs from suppliers, the movement

of materials through different operations within the organisation, and the flow of materials

out to customers as shown in Figure 2 below:

Figure 2: The flow of materials controlled by logistics

Moving materials into the organisation from suppliers is called inbound or inward logistics;

moving materials out to customers is outbound or outward logistics; moving materials within

the organisation (often described as collecting from internal suppliers and delivering to

internal customers) is materials management.

Logistics in practise in TESCO:

Tesco is one of the world’s leading retailers, with more than 4000 stores and sales of £50

billion a year. They have a long-term strategy of continuing growth, based on their aspiration

to: ‘Strive every day to do the best we can for our customers.’ For this they concentrate on

four areas, growth in the core UK business, strong international expansion, to be as strong in

non-foods as in foods, and to follow customers into new retailing services.

To support its operations it has a huge, efficient logistics network that spans the world. This

continually evolves to meet changing customer demands, ‘Following the customer as

customers’ shopping habits change, we change and respond by providing new products and

services.’ You can see this effect in their UK stores. In the 1970s most of Tesco’s sales were

in fairly small supermarkets in town centres. Over the next 20 years they closed many of

these smaller stores to focus on larger, out-of-town developments. More recently, they added

smaller Express and Metro formats, so by 2008 they had 2.5 million square metres of sales

area with four main formats to meet varying needs:

150 Extras with more than 6000 square metres and selling a complete range of

household products

450 Superstores with 2000–5000 square metres and focusing on food

200 Metro stores with 700–1500 square metres selling a smaller range of food and

ready meals

550 Express stores with up to 300 square metres giving a local service of 7000 lines.

The food range continues to expand, adding own brand, ‘Finest’, ‘organic’, ‘fair trade’,

‘Healthy Living’, ‘Free From’, and so on. Alongside food, the company now sells household

goods and continues its diversification into finance, insurance, telephone and Internet

services, petrol stations, pharmacies, healthcare, and so on. Operations within the stores have

also changed, with the growth of 24-hour opening, self-service checkouts, shelf-ready

packaging, Club card and online shopping. Tesco has moved heavily into e-commerce, which

has transformed many aspects of their logistics, including a web-based home delivery service

with sales of more than a billion pounds a year.

Task 4.2: Evaluate procurement practices in an organisation

Today, purchasing must be the most progressive group in the company. Your systems,

techniques, and operational theories must be flexible and dynamic. The typical philosophy of

“We have done it that way for 20 years, so it must be good” or “We make money in spite of

ourselves” does not apply in modern procurement practices. Worldwide competitive

pressures require greater contribution from the purchasing and supply management functions,

procurement practices and suppliers to improve the organization’s relative position on

quality, price, technology, and responsiveness that doesn’t mean sitting around and waiting

for it to happen.

The procurement policy is based on the Nestle procurement policy: The objective of

NESTLE is to produce and market food products that and that can please customers and

consumer prospect, and to provide enhanced quality food and worth for money.

Milk, coffee& coca are the key raw material of the Nestle in total the raw material turnover of

Nestle is 19.7 bio Swiss Francs. The basic problem is regarding to the procurement of the raw

material so the Nestle opt the two types of strategies that are:

Pre competitive & Competitive

1. Pre-competitive strategy of Nestle: In pre competitive strategies the Nestle wants to

collaborate with the food industry i.e SAI (Sustainable Agriculture. n this strategy the

Nestle provides the support to the agricultural development, trades , preliminary

works regarding the agriculture industry. In this strategy the Nestle try to overcome

the berries of raw material procurement for the Nestle plant.

2. Competitive strategy of Nestle: The competitive strategy deals to encourage the

sustainable agriculture product through the sourcing of its raw materials. This is done

with the help of strategy to the producers and by mounting privileged contractor

contracts. These are the two strategies of procurement of NESTLE by which Nestle

can overcome the hurdle of raw material procurement.

Task 4.3: Discuss the factors that must be considered when improving logistics and

procurement practices in an organisation

Procurement is a key activity in the supply chain. It can significantly influence the overall

success of an emergency response depending on how it is managed. In humanitarian supply

chains, procurement represents a very large proportion of the total spend and should be

managed effectively to achieve optimum value. Procurement works like a pivot in the internal

supply chain process turning around requests into actual products/commodities or services to

fulfil the needs. It serves three levels of users:

1. The internal customer.2. Programs in response to emergencies and ongoing programs.3. Prepositioning of stocks, for both internal customers and program needs.

In collaboration with the warehouse function, products/commodities are mobilized and

delivered.

Task 5: Be able to plan a strategy to improve an organisation’s supply chain

There should be the planned strategy for the improvisation of supply chain management of

Dell. The strategy must include certain points that are as follows:

Reduction in cost: The strategy must be planned with the perspectives of cost reduction in

the supply chain process in the organizations.

Time reduction: The strategy should be formulated in such a way s that the time can be

reduced and the process can complete in the proper time span.

Release value: value of the production must be acquired by the planned strategy.

Appropriate quality: The planned strategy of the supply chain management is to provide the

appropriates quality to the consumers.

Reduction in truncations: the strategy should be formulated in terms of reduction of the

transaction cost of the origination.

Task 5.2: Assess how a supply chain improvement strategy will benefit overall business

performance in an organisation

There are certain points which tell us the benefit of supply chain management on overall

performance on the organization that are as follows:

Reduction on inventories

Information sharing among the partners

Preparation being done in discussion rather than in segregation

The improvements can be reflected in terms of:

Lower costs

Satisfy customer service

proficient manufacturing

Better trust among the partners

Task 5.3: Explain how barriers will be overcome in an organisation when implementing

a supply chain improvement strategy

Supply chain management helps a lot in reducing the barriers in the organizations Tere are

certain methods by which the barriers will be overcome in the organization when

implementing a supply chain management. Here we are giving the example of DELL that

how supply chain management can overcome the barriers in DELL.

Stronger connection to customers: The DELL’s supply chain is completely focused on the

customer satisfaction. And the basic problem of the organization is to satisfy the customers

and with the help of supply chain the customer can get the maximum satisfaction so that the

DELL could get the positive feedback from the customers.

Complexity reduction: The production operations are very important as well as complex.

but the supply chain made this complexity is an easy going manner. All the process related to

the Production will be in a concise way in the supply chain in the Dell.

Improved internal collaboration: Managing and identify practical interdependencies have

ambitious association with the product design, supply chain management, marketing, sales

and finance. Dell is also beginner's communications by global operations,

Cost reduction: With the help of the supply chain there were the cost reduction of $1.5

billion in DELL. This was the major barrier reduction.

Improved forecast accuracy: The supply chain provides results in three terms that are:

augment in predict correctness at the product, platform and configuration levels.

Conclusion

The supply chain managers have a vital role to play in the management of total cost - they are

able to see and influence the whole cost base across the business. Supply chain management

is responsible for bringing a product to market utilising all the resources, internal and

external, available and aligning this activity directly with the organisation's strategies and

objectives. Supply chain management is spreading within the business world as larger

organisations are demanding this approach in order to remain competitive. The effect of this

is that smaller organisations, further down supply chains, are becoming involved with, or

appreciative of, supply chain management. CIPS encourages all purchasing and supply

management professionals to equip themselves with supply chain management skills not least

'hard ' skills such as process and performance management and to move from traditional

procurement, namely managing upstream supply chains into the organisation-wide

application of supply chain management.

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