Supply chain management Essay Example | Topics and Well Written Essays - 1500 words - 1

Supply chain management - Essay Example Earlier, companies were individual entities that gained profit for itself and were based on specified strategy of their production programs, which was not necessarily connected to the external world. However, in the future, companies will either be trading partners where the companies are linked to selected partners through exchange program, or the companies will have integrated supply chain management, which can build relationship with customers and suppliers. Christopher (1998) found competition is not within firms but between the supply chains. The main difficulty is to develop SCM, which not only creates effective relationship with supplier and customers but also is transparent, definable, demonstrable, tangible and communicable for the involved parties. Organizations have been making use of collection of methods, tools, techniques and programs for SCM. Fisher (1997) found two distinctive approaches in supply chain - efficient supply chain and responsive supply chain. The applica tion of SCM improves efficiency of industries and the target is to improve competiveness and profitability (Ellram 1991; Cooper et al. 1997; Persson 1997; Christopher 1998; Mentzer 2001). 2. Supplier Partnerships Working with suppliers provides an opportunity to acquire high quality products and services. Additionally, long term loyalty can be developed. The concept of JIT becomes significant in this regard where the raw materials are delivered on need and not before. Deming (1986) claimed building long-term relationship with suppliers can ensure improved products delivery. For long term commitment, the organization needs to be involved and each party has to contribute to the process of production and manufacturing. The supplier and buyer both need to understand that ultimately the goal is to satisfy the customers and hence, the decision should be made as a team. Various types of sourcing are used for supplier partnership such as single sourcing and multiple sourcing. In case of mul tiple sourcing, the products are delivered through competition. Further, it also reduces the disruption of work. Dr. Kaoru Ishikawa’s (1980) ten principles on supplier and buyer relationship include: 1. Customer and supplier are responsible for quality control. 2. Customer and supplier should respect the independence of other. 3. Supplier is entitled to get complete information from the customer. 4. The contract should be based on quality, price, quantity, method of delivery and payment terms. 5. Supplier should provide the quality desired by the customer to ensure satisfaction. 6. The quality should be determined through mutual consent. 7. The settlement of disputes should be made through agreement. 8. Frequent exchange of information should be promoted to improve the service or product quality. 9. The partner should be involved in procurement, inventory planning and production. 10. The interest of end users should be considered above all. In the case - NOSC has a proposal t o enter into ULV’s partnering agreement for office supplies; offering discounts between 50% and 70% will help to reduce total costs of acquisition of supplies. Additionally, it would provide daily deliveries of supplies to users. In return, ULV will use NOSC exclusively for the purchase of office supplies. It can be concluded the partnership is beneficial for both the parties. 3. Supplier Partnership