Supply
chain management plays an important role in the success of all Multinational
Enterprise. It comes along with certain challenges which also have to be
overcome. However before going in any detail it is essential to understand what
supply chain management is. Supply chain management is simply the system
undertaken by companies to make sure that their materials, information and
finances moving from the supplier and then moving to the manufacturer and then
to other intermediaries which is the
wholesaler to finally the retailer and then finally to the consumer with utmost
efficiency and cost effectively. There are many steps involved that are
involved in transforming raw materials into the final finished product. A
typical chain comprises of certain stages which are: plan, develop, make,
deliver and return.
The
first stage in supply chain is known as a plan which is important because only
a well planned strategy will be able to achieve and produce a healthy supply
chain. The developing part involves creating a healthy relationship with
suppliers of raw materials. Then comes the stage which is of making the product
where it is put to test and manufactured, tested, packaged and ready to be
delivered which brings to the fourth stage which is delivering. The last and
final stage is return where customers return their defective products (supply chain management (SCM)).
Another
approach or a way to understand the supply chain management is when a company
divides all management activities into three groups that are namely strategic,
tactical and operational. In this case strategic group is responsible for
handling relations with customers as well as the suppliers and integrating
information technology. The role of tactical group is to understand its
competitors and make decisions in respect to production and delivery. And
finally the operational department is responsible for the day to day management
of supply chain along with the production schedules.
However
it all comes down to one purpose of an effective chain supply which is to
reduce inventory or keep appropriate inventory so there is no waste and the
stock is efficiently used.
The Supply Chain management flow
in the modern years has changed a little and now consists of 3 flows that are
the product, information and the finance flow. The product flow consists of
movement of goods produced starting from the supplier ending with the customer
along with catering to all of the customer needs and returns and inquiries
regarding the service. The information flow is involved in sending orders and
updating and informing the status of delivery. Last but not at all the least is
the financial flow which contains all the payments timetable and schedules. It
also includes credit terms and most importantly it is the title or name of the
ownership and its arrangements.
In
today’s highly competitive business environment, supply chain management plays
a significant role in multinational organizations because supply chain
management gives a superior edge to the organization over their competitors.
Through supply chain management organizations around the globe can improve
their export specialization, employment options, prices, wages, and productivity
and also improve their terms of trade.
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