...Integrated Supply Chain Management for Competitive Advantage CREDITS This statement was approved for issuance as a Statement on Management Accounting by the Management Accounting Committee (MAC) of the Institute of Management Accountants (IMA® IMA ). appreciates the collaborative efforts of the Finance Business Solutions Group at Arthur Andersen LLP and the work of Dr. C.J. McNair, CMA, of Babson College, who drafted the manuscript. Published by Institute of Management Accountants 10 Paragon Drive Montvale, NJ 07645 www.imanet.org All rights reserved IMA Publication Number 00352 ISBN 0-86641-282-4 Special thanks go to Randolf Holst, CMA (Canadian), Manager of Knowledge Creation at Arthur Andersen, for his continuing oversight during the development of the Statement. IMA thanks the Consortium for Advanced Manufacturing-International (CAM-I) for their support in the development of this SMA. IMA is also grateful to the members of the Management Accounting Committee for their contributions to this effort. Copyright © 1999 in the United States of America by Institute of Management Accountants and Arthur Andersen LLP Statements on Management Accounting BUSINESS PERFORMANCE MANAGEMENT Implementing Integrated Supply Chain Management for Competitive Advantage TABLE OF CONTENTS I. Rationale . . . . . . . . . . . . . . . . . . . . . . . 1 II. Scope . . . . . . . . . . . . . . . . . . . . . . . . . 1 III. Defining Integrated Supply Chain ...
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...ADVANTAGE TECHNOLOGY NETWORKS PRACTICE PROCESS BALANCE PERFORMANCE SUPPLY CHAIN SUPPLY CHAIN THE &THE VS. HYPE REALITY 46 SUPPLY CHAIN MANAGEMENT REVIEW · SEPTEMBER/OCTOBER 2001 www.scmr.com The conventional wisdom is that competition in the future will not be company vs. company but supply chain vs. supply chain. But the reality is that instances of head-to-head supply chain competition will be limited. The more likely scenario will find companies competing— and winning—based on the capabilities they can assemble across their supply networks. By James B. Rice, Jr. and Richard M. Hoppe A n increasingly vocal and popular sentiment holds that the nature of competition in the future will not be between companies but rather between supply chains. If this does, in fact, represent the future, how will these chains actually compete against each other? And what can practitioners do now in anticipation of this future? In contemplating the much-ballyhooed supply chain vs. supply chain (SC vs. SC) proposition, we first sought examples of this competition in action. Yet for as many examples of SC vs. SC competition that we found, there were at least as many places where the model didn’t fit. On the one hand, we saw vivid examples where one company or a series of companies had designed supply networks to act with singular focus against other unique companies or groups of companies—for example, Brax, Perdue Farms, and Tyson Foods. Yet more...
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...views on global supply chain management and how you plan to be a part of the field. In today’s global economy companies can no longer compete if they don’t establish collaborative relationships that expand beyond their own organization. In my opinion, Global Supply Chain Management has become increasingly important as companies look for growth opportunities in other countries as a way of increasing their global presence. It is my understanding that in order for countries to do global trade, they need to have attractive fiscal and monetary policy in order to attract foreign direct investment. Most developing countries have recovered from the economic crisis and are growing at the fastest pace they can sustain without increasing inflation. Foreign governments have a big responsibility if they want to create business opportunities for multinational companies. It is their duty to give a lot of thought to how they would respond to global tightening. That’s why I think that by improving the long-term trade outlook and coming up with acceptable reform agendas can certainly go a long way when the emerging economies are trying to boost investor and market confidence. Companies such as Boeing, Pepsi, and Oracle are a few companies who are utilizing a vertical integration approach when trying to manage materials, manufacturing, and distribution. One way to view this opinion is whenever a company deals with a supplier that helps provide the next phase of the supply chain, both benefit from...
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...Is supply chain management for real or is it just another fad? Does the answer to this question depend on how a company pursues SCM? Supply chain management (SCM) is the economic theory of comparative advantage applied at the company level. Supply chain management is the activities to maximize customer value and achieve a sustainable competitive advantage. Supply chain management represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production, to product development, to the information systems needed to direct these undertakings. Based on this question supply chain management is for real. That is because supply chain management is frequently used by the management to manage the company. Supply chain management is closely related to the advanced in technology, supplier management, logistics and transportation and customer relationship management. Nowadays, most of the companies apply supply chain management and most material managers very familiar with the supply chain management. Even fewer have thoroughly mapped out their supply chains so that they know who their suppliers’ suppliers or customers’ customers really are. Supply chain management has a unique skill that is suitable to apply by Don Kagey because this supply chain system can help their company in effective managing and contacting with their distribution channel. There are some benefits if used supply chain...
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...In today’s business, supply chain is greatly recognized as one of the most important thing in order to effectively satisfy customers’ needs. Supply chain management is managing the flow of information and materials from the first supplier to the end customer (Fawcett et al, 2007). But Akkermans (1999) said that in reality is that companies do not engage in such extensive supply chain integration. Supply chain management is important to be established for all firms without exception in order to meet the customers’ needs and it is consist of all parties involved in fulfilling the needs (Chopra and Meindl, 2007). Supply chain management is equally important for firms other than manufacturing firms because all firms has the common objective which is to create great value of goods or services to customer with lowest price possible. Not only critical for manufacturing firms like automotive firms, but for other firms as well, for example supermarket or restaurant. Manufacturing firms and other firms are actually similar; they have suppliers and customers. For every business, it is important to make a strategic decision and supply chain management helps them to make it. Supply chain can help a company to determine their selling product and match with the strategy they have to do to create competitive advantages. For firms like Wal-Mart, it is important to apply supply chain management since they have to source the products from the supplier and provide service to sell the products...
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...A systems perspective on supply chain measurements Stefan Holmberg The Authors | Stefan Holmberg, Division of Logistics, Lund University, Sweden Abstract | Both practitioners and research scientists have noted a number of problems regarding measurement activities during the past decade. The problems reported suggest that measurement activities are fragmented both within and across organizations. Expands on a systems perspective on supply chain measurements and describes how problems can be communicated, understood and managed by developing methods and tools for describing interrelationships within supply chains. Empirical evidence from a case study of a Swedish home furnishing business supply chain provides data suggesting that firms within a supply chain cannot simply be categorized as either having adopted systems thinking or not. Rather, both structured models indicating a high degree of systems thinking, and problems showing fragmentation, are present. A performance model, which is used to reflect the systemic structure of an underlying supply chain and a potential integrator, is introduced and suggested as the focus of future research initiatives within supply chain measurements. Article type: case study. Keywords: Supply chain, Measurement, Systems integration, Performance measurement. Content Indicators: Research Implications** Practice Implications** Originality** Readability** International Journal of Physical Distribution & Logistics Management Volume...
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...A global company has decided to use India as its manufacturing base for the supply of printers to the European markets. The company offers three types of printers: high-end, standard and low-end. All three types of printers offered by the firm are similar in size and shape. The only differences are in the software and the chip used in the printers. The three models of the printers cost Rs.20,000 , 15,000 and 10,000 per unit, respectively. If the firm decides to use air as the mode of transport, it can fly the goods in smaller lots of 100 units, while shipping via sea requires a minimum shipment size of 400 units. The demand in Europe is stable at 100 units per week for each of the three types of printers. Transportation and customs clearance take one week if air is used as the mode of transport; the same will take four weeks if sea is used as the medium of transport. Freight by air will be Rs360 per unit while freight by sea will be Rs.90 per unit. The annual inventory-carrying cost for the firm is 20 per cent of the cost of the item. The firm wants to decide on the optimum mode of transport. The relevant calculations for high end products are shown below. Product Mode of Transport Cycle stock (units) Pipeline inventory (units) Average inventory Inventory carrying cost (thousand rupees) 2,400 600 1,800 450 1,200 300 Transportation Total cost costs per (thousand annum rupees) (thousand rupees) 468 2,868 1,872 2,472 468 2,268 1,872 2,322 468 1,668 1,872 2,172 High end Standard...
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...global economy. Choosing new suppliers to develop long term and strategic relationships with is an essential skill that companies must master in order to remain competitive in the marketplace. New supplier development helps companies enlarge their supply base, lower product cost and service time, and optimize value. For example, some companies have products that are high mix and low volume with hundreds or even thousands of different items on the bill of material. The demand may be uncertain but each item sold has a large influence on the company’s profit. According to Michael Porter’s Five Forces, powerful suppliers capture more of the value for themselves by charging higher prices, limiting quality or services, or shifting costs to industry participants. Powerful suppliers can squeeze profitability out of an industry that is unable to pass on cost increases in its own prices. 1) Once the company is not able to leverage a competitive advantage against its current suppliers, it will attempt to switch to a new supplier which may be extremely difficult. It is essential for companies to evaluate the pros and cons before developing a relationship with a new supplier. Some companies are obsessed with trying to grow a large supply base while other companies work with incumbent suppliers to leverage long term partnerships and reduce cost. Understanding how to effectively work with suppliers to form long term partnerships can be very challenging especially since most organizations...
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...INTEGRATED SUPPLY CHAIN MANAGEMENT IN THE GOVERNMENT ENVIRONMENT R.K. Gupta* and Pravin Chandra** ABSTRACT With the fall of East European Socialist-Bloc and opening up of the Asian markets, the trade barriers began falling during the 1980’s and continued throughout the 1990’s. This development lead to organizations having a supply chain, that criss-crossed the whole globe. The proliferation of trade agreements has thus changed the global business scenarios. The Integrated Supply Chain Management (ISCM) is now not only a problem of integrated logistics (as a process) but also demands that the supply chain management (SCM) must look into the ramifications of these arrangements on the cost of transportation (including tariffs or duties) of products within a trade zone and outside it, besides, developing logistics strategies. The field has thus developed in the last few years for bridging the gap between demand and supply vis-à-vis efficiency and cost trade-offs. The SCM now not only involves the “management of logistic function”, as was done in the past (to achieve internal efficiency of operations) but, includes the management and co-ordination of activities, upstream and downstream linkage(s) in the supply chain. The integrated supply chain management, in particular include : Planning and Managing supply and demand; Warehouse Management; Optimal Inventory control; Transportation and Distribution, Delivery and customer’s delight following the basic principles of supply chain management...
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...Q1-1. I agree with the statement that supply chain integration can be readily attained by merging suppliers and industrial customers to form a larger conglomerate. Different parts in supply chain including raw materials, manufacturing and transporting should share information and work closely together to increase the efficiency. For example, with the use of share management information systems (MIS), suppliers and contributors can know the changes in demand and provide timely replenishment. This can prevent late delivery problems and some other unpredictable situations in the supply chain management. With the vertical integration, companies can work closely with suppliers and industrial customers to ensure a dedicated supply of the components. Vertical integration can also help companies to reduce costs and improve efficiency by decreasing lead time and transportation costs. Furthermore, build positive relationship among suppliers can help the company to build positive culture and working environment for employees. Q1-2. The emergence of the Internet/World-wide web in the mid-1990s contributed to the advancement of supply chain management by gathering information, distributing system and improve supply chain operations. “Since the mid-1990s, several firms such as Cisco and Seven Eleven Japan have entered into the business of virtual supply chain management, made possible largely by the commercial use of the internet” (Weil & Vitale,2001). The e-business strategy provides...
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...suppliers help to drive cooperation as well as trust and value throughout the supply chain. Top management recognize the importance of developing and maintaining world class supply chains that gives them the competitive advantage that is needed to get ahead of the competition in the market. The factors that are important in maintaining a great relationship with suppliers is to know the history of the supplier and the suppliers environment. For example, the company’s expectations of quality, on time delivery, the competition that they have, and the effectiveness of their delivery techniques. With Riordan manufacturing the goods based on customer order the supplier has to be one that is trustworthy with the reputation to get the product to the customer in a timely manner. Riordan uses large suppliers like UPS, Federal Express, and DHL. These are some of the largest suppliers in the business with a good reputation of getting the products to the customer in tip top shape and on time. In order to respond effectively to demand Riordan realizes that exports of goods are a good option for maintaining flexibility in response, even though dealing with companies from overseas could cause some uncertainties in the relationship. According to Supply performance, “using custom built reports and dashboards, supplier relationships can be maintained and nurtured to ensure your supply chain can be world class. Global supply chains are complex, high number of in putters, long distance and language barriers...
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...4 Comparative performance analysis among six distribution networks 7 Response time 7 Product variety 8 Product availability 8 Customer experience 9 Order visibility 9 Returnability 10 Inventories 10 Transportation 11 Facilities and handling 11 Information 12 Conclusion 13 References 14 Introduction Distribution refers to the steps taken to move and store a product from supplier stage to a customer stage in the supply chain. Distribution is the key driver of the overall profitability of a firm because it affects both the supply chain cost and the customer experience directly. To meet the customer need properly every supply chain manager should have deep knowledge about supply chain distribution network. Supply chain manager should know the strength and weakness of all distribution networks to achieve strategic and increase supply chain profit. The report entitled “Comparative Performance analysis of Delivery Network Designs” originated from the partial fulfillment of the supply chain management course. The main purpose of the preparation of the report is due to the partial fulfillment of the course of the EMBA Program conducted by the Faculty of Business Studies, Dhaka University. During the course, I was under the supervision and guidance of Md. Anwar Hossain, lecturer, Department of Marketing, Faculty of Business studies, Dhaka University. Objectives of the report The purpose of the report is to develop our skills in marketing...
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...CURRENT CHALLENGES OF SUPPLY CHAIN MANAGEMENT Acknowledgement It is only because of the grace and mercy of great Almighty ALLAH that we are able to complete our report. Without His help, in no way we could complete it. We are highly indebted to honor Sir Shoaib Ishtiaq (Bahria University) for assigning us such an important and interesting report and for his valuable guidance in carrying out this research study which benefited during our course work in the university. We would also like to extend our gratitude towards the internet & books which helped us greatly. And on the other hand all those people who were directly and indirectly involved in the completion of this project. ABSTRACT Purpose : As the business environment becomes increasingly competitive, companies continuously look for ways to distinguish themselves from their competitors. Companies adapt different Supply Chain Management practices and philosophies to help them become competitive. However, they may face challenges that hinder attainment of the results sought. Here is the study of few challenges that supply chain management are facing in today’s world and some strategies propose to cope up with those challenges. Methods : Firstly the major challenges were search and then some strategies were purpose to cope up with those challenges of supply chain management by giving the examples of case study than how in past companies have faced those challenges and they were not able to handle...
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...· Location of Business · Suppliers and Supply Chain · Shipping & Storage of Inventory · Equipment Needed How will you acquire, process store and distribute all the necessary materials? Why did you choose a specific supplier? Location The TJX's Corporate Headquarters are located in Framingham, Massachusetts. The proposed business location for the Cartsaurus will be in Boston. This is an excellent location to serve our target market. Because we are first focusing on selling our product to TJX Companies and it’s easier for us to communicate issues about business. The company will be located on high traffic commuter routes. Locating a facility with easy access to natural resources or suppliers helps we keep transportation costs low. Suppliers Cartsaurus is currently in trial run and we planned to make 1000 shopping carts as variability test in 50 TJMaxx and Marshalls stores. Company is in negotiations with two Kansas manufacturers to supply shopping carts. It will establish a relationship with a reputable shipping company and a freight agent to aid in the smooth transition of product from the manufacturer to our distribution center. Cartsaurus wishes to establish long-term loyal relationships with its suppliers. Factors such as history, reliability, reputation, delivery system, service, product guarantees and liability issues will be crucial in the final decision. Due to the company's expansion plans in years two and three, it is important...
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...1. What are the advantages of each of Darden’s four supply chains? The advantages: a) First supply chain- smallware: Linens, dishes, table and kitchenware, and silverware are purchased with Darden taking title as they are received at the Darden Direct Distribution (DDD) warehouse in Orlando, Florida. Darden buys in economical bulk quantities and cut down the shipping price on all the small items such as napkins. It manages the warehouse as well as others might. From this single warehouse, smallware items are shipped via common carrier (trucking companies) to individual restaurants. So, Daren’s restaurants will have the uniform smallware and customer will enjoy the consistent quality from all the Darden’s restaurant. Everything being in this one location makes it easy to manage, lowers cost, and easy to inventory. b) Second supply chain- Darden’s 11 distribution center Darden’s 11 distribution center is managed by major U.S food distributors. Frozen, dry and canned food products are handled economically by these strategically located professional distributors. It provide the quickest delivery to each of Darden’s unique restaurants. The 11 distribution centers allow Darden to have a quick response time to customer’s needs. The eleven distribution centers also makes inventory management more effective. * c) Third supply chain- fresh food supply chain Darden independent supply chain is where they get their fresh vegetables and dairy products.Restaurant managers...
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