Professional Supply Chain Management System:
Supply Chain Management (SCM) is defined as "Maximizing added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market." Due to globalization and Supply Chain Management has become a tool for companies to compete effectively either at a local level or at a global scale. SCM has become a necessity especially for manufacturing industry when it comes to deliver products at a competitive cost and at a higher quality than their competitors. Here is some of the reason SCM has become important to today's manufacturing industry.
Competitive Edge through Core Competencies::
Today's business climate has rapidly changed and has become more competitive as ever in the nature. Businesses now not only need to operate at a lower cost to compete, it must also develop its own core competencies to distinguish itself from competitors and stand out in the market. In creating the competitive edge, companies need to divert its resources to focus on what they do best and outsource the process and task that is not important to the overall objective of the company. SCM has allowed company to rethink their entire operation and restructure it so that they can focus on its core competencies and outsource processes that are not within the core competencies of the company. Due to the current competitive market, it is the only way for a company to survive.
Value Advantage: :
SCM has allowed business nowadays to not just have productivity advantage alone but also on value advantage. Strategies for Reducing Cost and Improving Service states: Productivity advantage gives a lower cost profile and the value advantage gives the product or offering a differential 'plus' over competitive offerings. Through maximizing added value and also reduce the cost in the same time, more innovation can be added to the product and process. Mass manufacturing offers productivity advantage but through effective supply chain management. Product life cycles also can be improved through effective use of SCM. Value advantage also changes the norm of traditional offerings that is 'one-size-fits-all.' Through SCM, the more accepted offerings by the industry to the consumers would be a variety of products catered to different market segments and customers preferences.
SCM software encompasses all other software and individual modules of purchasing, shipping, logistics and inventory management. The high costs involved in the implementation of this software prohibit small and medium enterprises from installing it. As with any other software, implementation will not alone save costs. The attitudinal change of the end users and the top management commitment is required for successful results.
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