Learning objectives of this chapter include: List and describe the components of a typical supply chain, define the relationship between decision making and supply chain management, describe the four changes resulting from advances in IT that are driving supply chains, summarize the best practices for implementing a successful supply chain management system. | CHAPTER 10 Extending the Organization—Supply Chain Management LEARNING OUTCOMES List and describe the components of a typical supply chain Define the relationship between decision making and supply chain management Describe the four changes resulting from advances in IT that are driving supply chains Summarize the best practices for implementing a successful supply chain management system SUPPLY CHAIN MANAGEMENT The average company spends nearly half of every dollar that it earns on production In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains BASICS OF SUPPLY CHAIN The supply chain has three main links: Materials flow from suppliers and their “upstream” suppliers at all levels Transformation of materials into semifinished and finished products through the organization’s own production process Distribution of products to customers and their “downstream” customers at all levels BASICS . | CHAPTER 10 Extending the Organization—Supply Chain Management LEARNING OUTCOMES List and describe the components of a typical supply chain Define the relationship between decision making and supply chain management Describe the four changes resulting from advances in IT that are driving supply chains Summarize the best practices for implementing a successful supply chain management system SUPPLY CHAIN MANAGEMENT The average company spends nearly half of every dollar that it earns on production In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains BASICS OF SUPPLY CHAIN The supply chain has three main links: Materials flow from suppliers and their “upstream” suppliers at all levels Transformation of materials into semifinished and finished products through the organization’s own production process Distribution of products to customers and their “downstream” customers at all levels BASICS OF SUPPLY CHAIN Organizations must embrace technologies that can effectively manage supply chains BASICS OF SUPPLY CHAIN INFORMATION TECHNOLOGY’S ROLE IN THE SUPPLY CHAIN IT’s primary role is to create integrations or tight process and information linkages between functions within a firm INFORMATION TECHNOLOGY’S ROLE IN THE SUPPLY CHAIN Factors Driving SCM Visibility Supply chain visibility – the ability to view all areas up and down the supply chain Bullwhip effect – occurs when distorted product demand information passes from one entity to the next throughout the supply chain Consumer Behavior Companies can respond faster and more effectively to consumer demands through supply chain enhances Demand planning software – generates demand forecasts using statistical tools and forecasting techniques Competition Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain Supply chain execution .
