Distribution management free essay sample

The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to Japanese management practices. For the integration era, This era of supply chain management studies was highlighted with the development of electronic data interchange (ED) systems in the 1960s, and developed through the 1990s by the introduction of enterprise resource planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of Internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value added and cost reductions through integration. A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 1- type supply chain, systems such as production, storage, distribution, and material control are not linked and are independent of each other. In a stage 2 supply chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain is one that achieves vertical integration with upstream suppliers and downstream customers. An example of this kind of supply chain is Tesco. The third movement of supply chain management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. Although the use of global sources in organizations supply chains can be traced back several decades like in the oil industry, it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. This era is characterized by the globalization of supply chain management in rganizations with the goal of increasing their competitive advantage, adding value, and reducing costs through global sourcing. Specialization era (phase l): outsourced manufacturing and distribution In the 1990s, companies began to focus on core competencies and specialization. They abandoned vertical integration, sold off non- core operations, and outsourced those functions to other companies. This changed management requirements, by extending the supply chain beyond the company walls and distributing management across specialized supply chain partnerships. This transition also refocused the fundamental perspectives of each organization. Original equipment manufacturers became brand owners that required visibility deep into their supply base. They had to control the entire supply chain from above, instead of from within. Contract manufacturers had to manage bills of material with different part-numbering schemes from multiple Original equipment manufacturers and support customer requests tor work-in-process visibility and vendor-managed inventory. The specialization model creates manufacturing and distribution networks omposed of several individual supply chains specific to producers, suppliers, and customers that work together to design, manufacture, distribute, market, sell, and service a product. This set of partners may change according to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands. Specialization era (phase II): supply chain management as a service, specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non-asset-based carriers, and has matured beyond transportation nd logistics into aspects of supply planning, collaboration, execution, and performance management. Market forces sometimes demand rapid changes from suppliers, logistics providers, locations, or customers in their role as components of supply chain networks. This variability has significant effects on supply chain infrastructure, from the foundation layers of establishing and managing electronic communication between trading partners, to more complex requirements such as the confguration of processes and work flows that are essential to the management of the network itself. Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is a leading reason why supply chain specialization is gaining popularity. Outsourced echnology hosting for supply chain solutions debuted in the late 1990s and has taken root primarily in transportation and collaboration categories. This has progressed from the application service provider model from roughly 1998 through 2003, to the on-demand model from approximately 2003 through 2006, to the software as a service model currently in focus today. Building on globalization and specialization, the term SCM 2. 0 (Supply chain management 2. ) has been coined to describe both changes within supply chains themselves as well as the evolution of processes, methods, and tools to manage them in this new era. The growing popularity of collaborative platforms is highlighted by the rise of TradeCards supply chain collaboration platform, which connects multiple buyers and suppliers with financial institutions, enabling them to conduct automated supply-chain finance transactions. SCM 2. 0 leverages solutions designed to rapidly deliver results with the agility to quickly manage future change for continuous flexibility, value, and success. This is delivered through competency networks composed of best-of-breed supply chain expertise to understand which elements, both operationally and rganizationally, deliver results, as well as through intimate understanding of how to manage these elements to achieve the desired results. The solutions are delivered in a variety of options, such as no-touch via business process outsourcing, mid-touch via managed services and software as a service, or high-touch in the traditional software deployment model. 4. 0. Dimension of supply chain There are 10 dimensions ot supply chain that can bring excellence to companies or industry especially food industry. 1 . Alignment: It is clear that the best supply chains are characterized by having the tightest alignment between the overall usiness strategies and supply chain strategy and execution. Achieving the alignment is the objective of Sales Operations planning, but it can go much further, such as the service-level agreements Nick LaHowchic u sed to use when he ran the Limited Brands logistics services group with each of the companys different business units. It is clear the supply chain supports the business. Those supply chains that best synchronize that support with the strategies and objectives of the business are at the top of the performance heap recognizing that the business itself may not execute well, or have the wrong strategy. . Strategic Depth: Great supply chains are characterized by detailed and living strategies that are directly connected to the support of the business. What is a supply chain strategy? More on that soon, but at its core, a strategy is a multi-year plan that details the what, why, how of the supply chain and more. Many companies have no real supply chain strategy. The strength of the strategy, and how well that strategy turns into what the supply chain actually does, are critical elements of supply chain excellence. This also includes such core decisions around what to do internally and what to outsource. . Customer Satisfaction with Supply Chain Performance: this dimension like where the rubber hits the road, the supply chain has to deliver in the eyes of the customer this is the real lens through which supply chain performance should first be measured. The nice aspect of this dimensions is that it takes into account the companys overall value proposition or unique value props to different markets the supply chain expectations from customers should be different depending on that for example efficiency versus service. 4. Supply Chain Network Design: Hardly anyone mentions this as a core aspect of upply chain excellence, but it is at the heart of it. Network design is tied at the hip with supply chain strategy. It is the crucible in which the trade-offs between cost, service, flexibility and more must be managed, either explicitly or implicitly. Additionally, experts say network design determines some 80% of total supply chain costs. Supply chain excellence is clearly driven in large part by the quality of the network it operates in. 5. Macro Agility: One of the few true sources of overall corporate competitive advantage is the ability to respond consistently faster to opportunities and changing trategies than the other guys do. There are two components to this agility, as I have written about before a more strategic, longer term view, and a more real-time, right now view. This is the strategic component.