The Purpose of Supply Chain Management, Essay Example

Supply chain logistics and materials management have many strengths and limitations. Many companies do not consider inbound logistics. Therefore, this is a major weakness of supply chain logistics. In contrast, outbound logistics are commonly customized for each customer. This shows diversity. Supply chain logistics influence all aspects of the business, including profit. However, logistics can be risky due to the necessary diversity. The supply chain has the potential to have unique designs. Despite this, there is also the potential for errors to be made concerning the mechanism utilized in moving materials through the supply chain. Logistics are limited because it is difficult to estimate costs. Furthermore, there are disagreements regarding what to include in these costs.

The purpose of supply chain management involves providing the right service or product to the right customer. The evolutionary point of view considers how technology and knowledge changes a variety of processes. For instance, if a health care technician provides information using pen and paper, then changes to electronic charting, evolution to more sophisticated technology has begun. Using this example, it takes less time to chart information about patients, allowing the health care technician to spend more time with patients. This allows the technician to provide better care and meet the needs of the patients. Furthermore, when information is entered through the computer, such as vital signs, it is simpler for nurses and/or doctors to view the information, allowing for faster service.

Customer service measurements are chosen in a variety of ways. However, it is crucial to be aware that it is measured in order to promote consistency within the company. One of the most effective ways of measuring customer service is through supply and demand. In other words, the measurement is based upon the number of sales the company has. Although effective, it must be recognized that other factors contribute to sales, such as advertisements and economic conditions. A second method of measuring customer service is to ask the customers themselves. This will provide insight on the quality of services and/or products within the company. This also allows for ongoing considerations through mechanisms, such as a survey. By asking the customer, the company is able to determine what customers like/dislike. Therefore, this is the most effective way of measuring customer service.

The predominant inventory for a ski manufacturer is likely to be material for the core component of the ski. This includes materials such as wood and foam. The predominant inventory for a make-to-order tugboat manufacturer is likely to be wood and metal. The predominant inventory for a printer manufacturer is likely to be metal. This is because it takes different types of metal to create the printer. This includes internal components such as screws designed to help create the frame, protecting the internal workings of the printer.

Inventory costs can be difficult to measure. However, inventory shortage is the most difficult for companies to measure. The purpose of this measurement is inventory control, which is designed to minimize the overall cost of inventory. Thus, inventory control, done effectively, leads to increased company profitability. Inventory shortage is often measured through the provision of a particular percentage of demand will be met. This suggests that the company will always maintain a particular level of inventory in order to prevent shortages. Finally, if there are frequent shortages or profitability appears to fall due to inventory control differences, it is crucial that the company becomes more precise in inventory shortage cost estimates.

Currently, there are 16 pairs of socks and 3 suits in my closet. This can be related to the ABC concept. The ABC concept is known as activity-based-costing. It focuses on the costs of particular activities in relation to the resources available for all products, accounting for the actual consumption of resources for each product. Therefore, if the 3 suits in my closet are considered the activity and the 16 pairs of socks the individual resources, there is an excess of resources. Thus, the activity will depreciate in value before the resources. In other words, my suits will become frayed and old before my socks do, assuming I wear all items on a daily and rotating basis.

The purpose of the MPC system is to assist with all aspects of the manufacturing process. This includes controlling and planning the process. For instance, the MPC system links the customer and supplier. Thus, it is based on sales and operations planning. It is known as front-end. The engine is the planning facility. In this engine, the material and capacity is planned between the customer and supplier. The back-end is based on priorities. Thus, utilizing the plans, the back-end prioritizes activities based on needs.

JIT is more effective than MPC. This is because JIT focuses on minimizing waste. This includes waste in materials, time, energy, and through errors. Ultimately, this waste influences profit. Furthermore, JIT focuses on maintaining level production schedules and favors production rate goals, rather than creating batches of product. Ultimately, JIT allows for increased market demand response.

An approach to provide short lead times to customers is quick response manufacturing. It focuses on reducing lead times, both internally and externally. This approach utilizes MCT to determine the successfulness of the method. Another method is the portfolio approach. This approach considers ROA, ROI, ROIC, and/or EP. With this information, management can ascertain what the inventory return rate is, allowing for better planning of resources.