Supply Chain Management Essay Example | Topics and Well Written Essays - 2750 words

Supply Chain Management - Essay Example Thus, supply network necessitates several levels of integration with the first being the integration of separate components in organizational structures to create individual networks and secondly, integrating the networks. The first level integration results in manufacturing and distribution networks, because individual networks link to a central warehouse that receives stocks from plants when products are manufactured and distributes them to customers through field warehouses. Thus, two networks with the possible routes for manufacturing and distribution form the supply chain network that involve planning, execution and control of components. Managing flow time is crucial in providing effective customer service in the supply chain; therefore, integration is the basis of supply chain management strategy  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Development of efficient MPC system is crucial to the success of all companies that produce goods; since it coordi nates supply chain efforts across company boundaries (Jacobs 1). Inventory is a valuable asset in companies; however, benchmark results indicate that most organizations fail to manage inventory efficiently. Many manufacturers and distributors depend on overly localized inventory policies; thus, companies tie working capital which can result in hurting shareholders. Properly managed inventory acts as a lifeline for supply chain since it propels revenue and competence in companies. In IBM, supply chain inventory practices involve managing flow and positioning of inventory across different stages within the supply chain even in suppliers and downstream partners. The company adopts the opportunity of combining proven supply chain inventory practices, which reduce inventory levels across the organization while improving service levels as well as productivity. The company is does not push back inventory to its suppliers; however, IBM helps its suppliers to reduce their inventory.  Ã‚  Ã ‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Rather than monitor and manage inventory at local level, IBM is increasingly adopting supply chain-wide inventory practices. Companies attempt to decrease amount of inventory in their supply chain management, which in turn reduces inventory carrying costs. The company aims at being responsive and reliable to customers, since it is crucial for the company to increase service levels without increasing inventory investment. Since inventory necessary to attain service levels relates to lead time, reducing lead time as well as supply chain unpredictability is crucial to the company. Moreover, IBM aims at improving financial performance, because it is crucial for the company inventory management success to maximize profit contribution and net margin; thus, reducing distribution and manufacturing costs is essential. In some cases the company institutes lean processes for low inventory; however, it is not too low to drain fina ncial performance of the company, which increases manufacturing re-scheduling and lost sales from uncompetitive flow times. Best companies attain high improvement rate from better inventory management practices, which are augmented when they apply technology to practices like supplier collaboration technology. IBM