Apparel Industry Management

Apparel Industry Management 3(3+0)

Lesson 16 : Supply Chain Management

Supply Chain Management

Supply chain management consists of a total systems approach to managing the entire flow of information, material and services from raw material suppliers through manufacturing firms and warehouses to the end customers.

Supply chain management has become a strong competitive advantage for manufacturers enabling them to get right products to the right market place at the right time. Today, competition has a new dimension, which is the delivery speed or on-time delivery in addition to appropriate quality and price to the customer. Supply chain management enables competitors to gain an edge through their ability to deliver the RIGHT STUFF IN RIGHT QUANTITY AT THE RIGHT TIME TO THE RIGHT CUSTOMER. All the TQM, JIT production and JIT procurement, re-engineering and team work depends on the relationship of the manufacturing firm with its suppliers and distributors, which can be achieved only through efficient and effective supply chain management.
Supply chain management has the following objectives:

1. To maximize the overall value generated.
2. To achieve maximum supply chain profitability
3. To reduce the supply-chain costs to the minimum possible level.

Activities involved in supply chain management are:

1. Purchasing
2. Purchasing cycle,
3. Outsourcing
4. Vendor analysis and vendor evaluation
5. Supplier auditing
6. Supplier certification
7. Supplier partnerships
8. Logistics management
9. Warehousing
10. Distribution requirements planning.

Supply chain strategies involve:

1. Multiple suppliers
2. Few suppliers
3. Vertical integration
4. Keiretsu networks
5. Virtual companies.

Some of the opportunities for enhancing value in the supply chain are:

1. Postponement of customization of the product to the extent possible in the production process
2. Channel assembly individual parts or subassemblies are sent to the distributor who assembles, tests and ships the product to the customers,
3. Invoiceless purchasing,
4. Electronic ordering and funds transfer
5. Stockless purchasing
6. Standardisation.

Process tools for supply chain management are:

1. Make or buy analysis,
2. Supplier scheduling
3. Value analysis
4. Supplier certification/evaluation

Supply chain dynamics has three key prints. They are :

1. Supply chain is a highly interactive system,
2. There is an accelerator effect of demand changes and
3. The best way to improve the supply chain is to reduce the total replenishment time and to feedback actual demand information to all levels.
   

The coordination in supply chain can be increased through cross-functional teams, partnerships with customer and supplier, better information systems, a flatter organizational structure and so on. Supply chain performance can be measured through factors such as delivery time (on-time delivery), quality (customer satisfaction and customer loyalty), replenishment time and cost.

Supply chain management can be improved considerably through structural improvement (i.e. by changing the structure or infrastructure of supply chain) and improvement in infrastructure.
This is done by:

1. Cross sectional teams,
2. Partnerships
3. Set-up time reduction,
4. Information systems and
5. Cross-docking.