supply chain management (SCM), as defined by Tom McGuffog is "to maximize the added value and lower total cost across the whole by focusing on the speed the trading process and certainty to respond to the market. " Because of globalization and information technology and communications, SCM has become a tool for companies to compete effectively, both locally and globally. SCM has become a special need for the industry when it comes to offering products at a competitive cost and higher quality than its competitors. Here are some of the reason became SCM's important to manufacturing today: -
a competitive advantage through its core competencies
today's business climate has changed rapidly and become more competitive than ever before in nature. Now companies not only need to run at a lower cost to compete, it must also develop its own core competencies to differentiate itself from competitors, and stand out in the market. In creating a competitive advantage, companies need to convert its resources to focus on what they do best and outsource the process and the task is not as important to the overall objective of the company. The Supreme Council has allowed the company to the judges to reconsider the entire restructuring process so that they can concentrate on their core competencies and outsourcing operations that are not within the company's core competencies sources. This is due to the current competitive market, and this is the only way for the company to survive. The strategy on the application of SCM affect not only the market situation, but also a strategic decision to choose the right partners and resources and manpower. By focusing on the core competencies it will also allow the company to create outlets and specialization in key areas. As it stated in the Blue Ocean Strategy set by Chan Kim, in order to create a favorable environment of competitive advantage that, companies must look at the larger process of the whole picture, and figuring out what the process can be a limit, and the judiciary, and to raise and create.
As an example, said Chan Kim, Japanese auto industries to take advantage of their resources to build a small, efficient cars. Japanese automakers gain a competitive advantage by leveraging the supply chain to maximize the core competencies and consolidate its position in a niche market. The strategy is working, and now Toyota Motor Corporation, a Japanese company, and is considered to be the number of cars and one car maker in the world, beating Ford and General Motors in the United States.
value feature
The SCM business allowed for the time being is not just to have a productive and feature alone, but also on the value of an advantage. Christopher and Martin in his book, logistics and supply chain management: strategies to reduce costs and improve service, "states' feature productivity gives a glimpse less expensive and feature value gives the product or differential to provide 'as well as' on competitive bidding." By maximizing the value-added and also reduce the cost at the same time, you can add more innovation in product and process. Overall manufacturing productivity feature offers but through the effective management of the supply chain, mass customization can be achieved. With mass customization, customers are given a value advantage through flexible and adaptive manufacturing on demand. Also we can improve the product life cycle through the effective use of SCM. Value is also an advantage to the rule change traditional offers that are "one size fits all from." Through the Supreme Council of the Magistracy, the more accepted by the industry offers to consumers are a variety of products to meet different market segments and customer preferences.
As an example, Toyota practiced in the Toyota Production System, and assesses the supply chain and determine what is the value-added activities and what is not value-added activities. Activities of non-value-added is considered to be the "Moda" or waste, and therefore must be eliminated. This non-value added activities are the overproduction, waiting, transportation is necessary, the processing, and increased inventory, the movement is unnecessary, defects and unused employee creativity. Steps taken to eliminate waste is through kaizen, kanban, just in time, as well as push-pull output to meet the actual customer's requirements. Toyota Production System revolution in supply chain management in order to become leaner supply chain that is more fluid and flexible in order to meet the demands of end users system.
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