Essay about Supply Chain Management

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When you look at the effectiveness and ability to modify your supply, you must first look at the integration of several factors with the chain. You must look at maintaining a higher level of integration between suppliers and customers within the supply chain. Supply chain operations in today market is the ability to integrate management and business process, the ability to adapt, change and deliver across the supply from design to delivery or suppliers to customers. In each roll, companies must be flexible with the indicators they use in their supply chains. High speed and low cost supply chains have been important drivers for companies. Depending on the market the firm is in, these supply chains work perfectly in steady conditions since the entire supply chain is focused on economies of scale, delivering quick supply for the least amount of money. Current market conditions require supply chains that are capable of dealing with sudden changes of demand and strategies instead of a cost and/or speed oriented view solely. Changing market demand, differing supplier lead time, product quality and information delay are sources of uncertainty that create a need for building ‘flexible’- supply chains that can deal with these changes and preferably in a better way than their rivals. The ability of a business process to effectively manage or react to changes in the market with little penalty in time, cost, quality or performance as, is explained as the flexible ability of a company in terms of three distinctive components. These components the fill rate, forecasting, and cycle time are general characteristics of flexible supply chains since it is not described how these components influence the functional operations in the supply chain.
Toyota is one of the leaders in the automotive industry; supply chains are extensive and include elements of producing based on several forecasting techniques. Large and fixed amount of money is invested. Key trend in the automotive industry is the increase of the variant numbers on individual models and standardization of components in the supply chain. This means that models can be adjusted to the individual tastes of customers and new models are developed and produced continuously in order to meet the changing market demand. The uncertainty in the market place is translated into mix flexibility and volume flexibility in order to be competitive in the market place. There is a difference between mass production supply chains and ‘lean’ supply chains. Toyota can be considered as the first automobile brand that introduced a clear need for flexibility in its entire business system. Toyota’s ‘lean philosophy’ is not only restricted to its manufacturing system: it describes a philosophy that incorporates a collection of tools and techniques into the business processes to optimize time, human resources, assets, and productivity while improving the quality level of products and services to their customers. Currently, several automobile brands clearly recognize the strength of ‘lean thinking’ in relation to increase flexibility in their supply chain activities. In the dyadic relationship between a buyer and supplier, emphasis is put on how the work can be done smoothly in order to improve quality and reduce costs. Best value procurement becomes more important instead of merely a cost-oriented approach that ensures a close relationship with suppliers. First tier suppliers are incorporated into the production development program. These suppliers have their own 2nd tier suppliers under it who supply parts for these components. This ensures that the exchange of information is
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