The Evolution of Supply Chain Management Operations Management Assignment Help

The Evolution of Supply Chain Management

Supply chain management is a relatively new concept in business. Previously, management theory suggested that the overall efficiency of etechnical core or production function could be significantly improved if the core could be isolated or-buffered to the greatest extent possible from an often erratic and uncertain external environment. In order to isolate the technical core from suppliers (and also customers), companies established significant inventories of raw material and finished goods, as shown in  Exhibit 13.2A. While this approach produced highly efficient operations, it simultaneously  are the careless responsive to changes in the marketplace. This inability to react quickly to changes in customer demand, preferences, and so forth was caused primarily by the significant amounts of raw material and finished goods inventories that were maintained, and that first had to be depleted before the firm could begin supplying customers with new product. Within this type of operating environment, companies very often had an antagonistic relationship with their suppliers. Every item that was purchased had several vendors.  here
vendors were played off against each other in order to obtain the lowest possible price, which was the primary criterion for being awarded a contract. Suppliers, recognizing that this relationship could very likely be terminated with the next contract, invested minimal time and money to address the specific needs of individual customers. Because of this short-term perspective. very little information was shared between these firms. Under such conditions the purchasing function within a manufacturing company often reported to the operations manager, and its primary objective was to purchase raw material and components at the lowest possible cost. Today, companies are working more closely  with their suppliers so that they can be more responsive to the changing needs of their customers. In so doing, they are significantly reducing, and in some cases eliminating. these previously established buffer inventories, as

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