Importance of Supply Chain Management in modern enterprises
Supply Chain Management (SCM), as defined by Tom McGuffog is "maximize the value and reducing total cost across the entire business process with emphasis on speed and certainty of response to the market." Because of globalization and ICT, SCM has become a tool for companies to compete effectively, or in a local or global. SCM has become a necessity especially for manufacturing industry, where s' acts to provide products at a competitive cost and superiorquality than their competitors. Some reason SCM has become important for the manufacturing industry of today: —
Competitive Edge through Core Competencies
Today's business environment has changed rapidly and become more competitive than ever in nature. Society now needs only to operate at a lower cost than the competition, but must also develop their own basic skills to differentiate themselves from their competitors and stand out on the market. Creating a competitive advantage, companiesneed to redirect their resources to focus on what they do best and outsource the process and the task that is irrelevant to the overall objective of the company. SCM has led the company to rethink and restructure their operations so they can focus on their core competencies and outsource processes that are not core competencies of the company. Since the market is competitive, is the only way for a company to survive. The strategy for the implementation of SCM is not only the impacttheir market position, but is also a strategic decision in choosing the right partners, resources and personnel. Focusing on basic skills will also enable the company to create niches and specialization of the central areas. As stated in Blue Ocean Strategy by Chan Kim described to create a niche for competitive advantage, companies must look at the overall picture of the whole process, and understand the processes that reduce, eliminate, raise and create.
For example, saidChan Kim, Japanese manufacturers of automobiles, to capitalize on its resources to build small cars and efficient. Japanese auto gain competitive advantage through their supply chains to improve their basic skills and to position itself in a niche market. As the strategy and now Toyota Motor Corporation, a Japanese company, is considered the number one car in the automotive world beating Ford and General Motors of the United States.
Value Advantage
SCM hashave allowed companies nowadays do not have the benefit of productivity alone, but also the advantage of value. As in his book, Martin Christopher, Logistics and Supply Chain Management: Strategies for reducing costs and improving the benefit of the State Department ',' productivity to be a low profile, cost and value advantage gives the product or the availability of a plus "compared to competitive offerings. Thanks to maximize value and reduce costs at the same time, more innovation can beadded to the product and process. Mass production has the advantage of productivity, but through efficient management of supply chains, mass customization can be achieved. With mass customization, customers benefit from the value of flexible production and a custom fit. The life cycle of the product can also be improved by effective use of the GCA. Benefit value also changes the type of offering classic, which is "One-size-fits-all". With SCM, the most reliableJobs by industry to consumers would be a variety of products to meet different market segments and customer preferences.
For example, the Toyota Production System practiced at Toyota estimates its supply chain and determine what is the value added activities and not a value added. Value-added activities are not considered "Muda" or waste and must be removed. This value has not added areas are overproduction, waiting, unnecessarytransportation, processing, excess inventory, unnecessary movement, defects and creativity of employees not being used. The measures taken to eliminate waste through Kaizen, Kanban, Just-in-time push-pull output to meet actual customer's demand. The Toyota Production System revolutionize the supply chain management to become more subtle, as the system of supply chain more agile and flexible to meet the needs of end users.
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