6-2 Short Paper Supply Chain Management

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Southern New Hampshire University *

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415

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Business

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Apr 3, 2024

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QSO-415 Trends in Operations Management 6-2 Short Paper: Supply Chain Management April 9, 2023 Leif Dyer

Supply chain management is the management of material and information flow in a supply chain to provide the highest degree of customer satisfaction at the lowest possible cost. Supply chain management requires the commitment of supply chain partners to work closely to coordinate order generation, order taking, and order fulfillment. They thereby create an extended enterprise spreading far beyond the producer's location ( Salini, 2019). A collaborative effort between businesses, suppliers, and customers is what makes supply chains effective. Supply chains can be very complex and include a multitude of partners. This aspect can complicate the level of control and effectiveness of the supply chain. In its early stages, supply chain management played a role in manufacturing firms that directly controlled most if not all stages of production. Vertical integration strategies gave organizations more control over processes but required optimal performance and synchronization. Advances in technology and transportation (trucking) continued to evolve supply chain management making the movement of goods faster and more convenient for end users while expanding market reach. In the 1960s, the compartmentalization of various aspects of supply chain management created functional silos which ignored the inter-organizational component that makes supply chains effective. Recognizing the benefits of connecting these functions led to grouping inbound and outbound functions into materials management and physical distribution . Integrating materials management and distribution led to a greater focus on communication and interaction with suppliers and customers. Recognizing the need to focus on optimizing efficiency at all stages in the supply chain for the sake of customer satisfaction led to supply chain management as we identify it today. Providing the highest degree of service to customers at the lowest costs implies that the management of inventory is a crucial component of effective supply chain management. As a

cost component to organizations, inventory is a major contributor, so whether raw materials or finished goods, reducing inventory to only what is needed is key in reducing costs. It is the inter- organizational aspect of supply chain management that makes it effective. Integration is facilitated by communication, information sharing, and alignment in decision-making to benefit all partners in the supply chain. One example of supply chain management’s impact on inventory is minimizing the bullwhip effect. The bullwhip effect is a phenomenon that amplifies variability in demand as orders move upstream in the supply chain. Insight into ordering behavior at the retail level, ordering behavior based on demand, consistent pricing, and sensitivity to supplier capacity all work to minimize this phenomenon. Effective supply chain management also heightens control and process alignment, enhancing organizational performance. There are several benefits to effective supply chain management which include: optimizing inventory levels, increasing productivity, reducing lead time, increasing revenue, and improving the customer experience. The benefits are measurable and help to identify key performance indicators which are mainly focused on inventory, time, and working capital (Windmill, 2022). These benefits and correlating performance metrics are important to senior management because effective supply chain management can provide a long-term competitive advantage. The strategies formulated by management executives must address the demanding lead-time requirements of customers, and their desire for product customization and availability (Drake, 2012). Supply chain management provides organizations with the tools needed to meet these ever-evolving customer demands.

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Drake, M. (2012, January 30). Global Supply Chain Management . https://ebookcentral-proquest- com.ezproxy.snhu.edu/lib/snhu-ebooks/reader.action?docID=876642&ppg=14 Salini, S. (2019, October 6). Supply Chain Management: Introduction, Meaning, Implementation, Process . Essays, Research Papers and Articles on Business Management. https://www.businessmanagementideas.com/marketing/supply-chain- management/20461#:~:text=Supply%20chain%20management%20refers%20to%20the %20management%20of windmill. (2022, October 1). Measuring Supply Chain Performance: 3 Core Metrics and 10 Soft Metrics . GlobalTranz. https://www.globaltranz.com/resource-hub/measuring-supply- chain-performance/

6-2 Short Paper Supply Chain Management

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