Jan 25, 2019 a healthy backlog which may seem stressful is actually a good thing. The guidelines presented herein are a compendium of supply chain management scm business descriptions, requirements, minimum standards, and best practices intended to aid an organizations management and staff in the development andor enhancement of their scm policies, procedures, and practices. The few case studies investigating the application of cost management along the supply chain have largely. These concepts show that traditional cost management ignores the needs of the supply chain cost management. Supply chain organizations use logistical methods that manage the entire process. Cost management involves a proactive management of costs by influencing cost structures and cost behavior, and it covers the assessment, planning, controlling. The five basic components of supply chain management are discussed below. Apr 20, 2012 1 variability in demand 2 consumption rate 3 life cycle stage 4 product variety 5 criticality of item 6 quality no. Sample mba sop for supply chain management or operations. Yet, while this proves the importance of these issues, it. Managing cost is always a sensitive issue with suppliers. Li ebusiness division, management school, university of liverpool, uk abstract e supply chain management in a manufacturing context, is a series of internetenabled valueadding activities to guarantee products created by a manufacturing process can eventually meet customer requirements and realize returns on. The mostsought and most common result of applying supply chain management is reduced costs in the supply chain.
One of the interviewees talked about supply chain being in the middle when a difficult situation or crisis arises. Improve the quality of personnel throughout the logistics industry in the context of chinese logistics cost management companies, the companys team members who are adapted to couple and training can better achieve the supply chain logistics cost management. Chandrasekaran, supply chain management, oxford university press, 2010 satish k. Wielandwallenburg, 2011 supply chain management scm is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain.
Supply chain management is the integration of key business processes from end user through. The manufacturer lacked the internal resources and supply chain knowledge to efficiently and costeffectively handle the demand variability and production inefficiencies it faced. Aug 06, 2017 supply chain management is composed of three main areas, i. However, very little research using case studies has been done to demonstrate how cost management is implemented along supply chains.
Supply chain management and cost management are important. Tous les grands groupes industriels ont mis en place une fonction supply chain management. Supply chain management is a conscious effort to run supply chains in the most efficient and effective way possible. At long last a book on supply chain cost management that makes sense and a process that can be implemented by anyone. Supply chain management is concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed. Structural cost management employs tools of organizational design, product design, and process design to create a supply chain cost structure that is coherent. Guideline 2008, managing the total costs of global supply chains, and.
Mar 06, 2014 one of the biggest challenges that companies are facing is how to reduce their supply chain cost. Pdf cost management in supply chains different research. Sc1x supply chain and logistics fundamentals lesson. Such strategies include product development, sourcing, production and. Right from the planning tools, company environment, communication tools, supply chain relationships, manufacturing, supply chain management p. Pdf supply chain management and cost management are among the top issues on the agenda of business practitioners and academic researchers.
In 2005, the products labor cost in a typical chinese factory would have been 61 percent lower than in the u. Reduced inventories, increased production, lower cost bases and best practices have all been derived from the assumption that your suppliers are committed to consistently. Scm according to the council of supply chain management professionals. Cost management scm supply chain resource cooperative scrc. Starting as management trainee, i have optimized various supply chain and processing activities resulting in greater workforce motivation and record cost efficiencies.
Supply chain management are important because of the following points. The organizational structure of the supply chain management systems determine how they accomplish these goals. Supply chain management scm managing flow of information through supply. In addition, limited research has focused on supply chain relationships in developing countries. Strategic cost management in supply chains, part 1. A cost that exists throughout most supply chains and therefore is often the target of supply chain management is the cost of inventory, managing it and carrying it. In cost management, an approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to or absorbed into each unit of production. By 2015, higher chinese wages will have shrunk that total cost advantage to per cent. Its when deadlines, as in the example above, are missed that the backlog turns into back orders. However, cscmp also state the supply chain management scm profession has continued to change and evolve to fit the needs of the growing global supply chain. Martin christopher is professor of marketing and logistics at cranfield school of management where he chairs the centre for logistics and supply chain. In the right quantities to the right locations at the right time in order to minimize total system cost. Supply chain management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. Supply chain efficiency is the cost of making and delivering a product to the customer costresponsiveness efficient frontier is the curve showing the lowest possible cost for a given level of responsiveness shows the costresponsiveness performance of the best supply chain.
But one of the big challenges with supply chains is that things are often interconnected, so making a change in one area to lower costs can cause a change somewhere else that actually increases the cost. Designing the supply chain nsupply chainetwork3936. Best practices in green supply chain management final. Strategic cost management in the supply chain procurement. Logistics cost management from the supply chain perspective. Structural cost management strategic cost management is the deliberate alignment of a firms resources and associated cost. Cost management along the supply chain methodological. A supply chain is the collection of steps that a company takes to transform raw materials into a final product. It can be an issue with a supplier, an issue with the production process, or customers, the participant said. Stanford supply chain forum call it distribution or logistics or supply chain management.
Supply chain management is primarily concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed in the right quantities, to the right locations and at the right time, and so as to minimize total system cost subject to satisfying. We recommend the definition of supply chain management developed and used by the global supply chain forum. The few case studies investigating the application of cost management along the supply chain have largely focused on single cases where supply chain participants have a dyadic relationship. Evidently, strict supervision, power reduction, overtime work and quality compromise are practical ways to achieve this. The role of management accounting for supply chain management is to provide managers with relevant information of total supply chain activity costs direct. Ppt supply chain management powerpoint presentation free. In order to satisfy customers price expectations, companies have opted to relocate manufacturing to low cost countries around the world in an effort to reduce direct and indirect costs and to minimize taxes. Cooper 2000 issues in supply chain management, industrial marketing. This process is not just for the big companies out there but for small and medium companies as well. Find materials for this course in the pages linked along the left.
Principalagentrelationships are important in the application of cost management in a supply chain. Practitioners and educators need a common definition of supply chain management, and a shared understanding of the processes. Supply chain management and cost management are among the top issues on the agenda of business practitioners and academic researchers. What are the five most important factors of supply chain. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs. So its important to keep on top of those deadlines. Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse. An important element of the concept of cost management in the supply. Most supply chain managers spend a lot of their time looking for ways to reduce costs.
Cost management has a functional and an institutional dimension. A supply chain involves the process of moving goods from the providers of raw materials all the way through to finished products for the end customers. Nevertheless, cost management in and of itself is not enough to. Transport and supply chain management bridging one year compulsory classes in johannesburg, durban and cape town examination in 3 examination centres please refer to the transport and supply chain management bridging prospectus for the credits allocated to each programme diploma in transportation management or diploma in. I enjoyed the authors free flowing style, the examples and clear logic. Supply chain management is a process used by companies to ensure that their supply chain is efficient and cost effective. Executional cost management employs measure ment and analysis tools e. John proverbs, senior director, supply chain, klatencor formerly with ibm and hewlett. A wakeup call the disaster in japan has once again brought to light the need for every organization to conduct a comprehensive analysis of its supply chain. In essence, supply chain management integrates supply and demand management within and across companies. I currently lead a handpicked, hierarchical 10member team.
Realizing that the most strategic option was to outsource its supply chain management forward and reverse logistics. The supply chain network, in terms of responsibility and risk, is in the middle. Lecture notes logistics and supply chain management. Request pdf strategic cost management in supply chains, part 1. Strategic cost management in supply chains, part 2 american. Issues in supply chain strategy pdf courtesy of don rosenfield.
Supply chain management supply chain management managing complex and dynamic supply and demand networks. On safeguards logistics companies supply chain cost control programs implemented 5. Environmental supply chain management, carter and narasimhan, caps research, 1998 identify the waste streams. Designing the supply chain nsupply chainetwork3936 free download as powerpoint presentation.
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