Adil
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Tech Terms
Business Plan: Org goals of sale, reasons to attain and plan E.g. Unilever
Introduction
Supply chain management now part of the business vocabularies of CEOs, CFOs,
COOs, and CIOs during the 1990s. Impact of global marketplace drastically changed
the landscape of business.
Change was rapid and continuous in the 1990s. Basic role of internet create rapid
change.
Doing business in the comfort zone was no longer synonymous with success.
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The large retailers are accorded special consideration from consumer product
companies. For example, customized distribution services are provided such
as scheduled deliveries, advance shipment notices so forth. These services
allow retailers to operate more efficiently and often more effectively. The
scale of the retailers can also provide scale economies (read cost savings) to
the producers of the products. It can be a win-win arrangement for both
sides, with savings passed on to the ultimate customerthe consumer.
In addition to customization, the retailer may be provided value-added
services such as vendor-managed inventory (VMI).
Finally, more collaboration is being practiced between organizations in the
supply chains to gain mutual cost savings and improved customer service.
For example, sharing point-of-sale data is a powerful collaborative tool for
mitigating the so-called bullwhip effect in the supply chain, which has
multiple benefits to supply chain collaborators.
Deregulation
The various levels of government (federal, state, and local) that establish
and administer policies, regulations, and taxes that impact individual
businesses and their supply chains. The usually regulate sectors include 4
Pillars, transportation, communications, financial institutions, and utilities,
which are cornerstones of the infrastructure for most organizations.
Deregulation is the removal of constraints. And results in
Completion increase
Prices decrease
Open market
Consumer empowered
Changes in transportation -fewer or no economic controls over rates and
services.
Change in financial institutions blurred traditional differences and
increased competition.
Change in the communications industry also resulted in more competition
Changes in the utility industry allows more competition
Globalization
Globalization has led to a more competitively intense economic and
geopolitical environment. This environment manifests itself in
opportunities and threats both
economic and political. Some individuals have implied that there is
nogeographyin
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Technology
Technology has had a major impact on supply chains as a facilitator of
change as
Companies have transformed their processes. Technology includes Internet,
Software etc.
Individuals and organizations are connected 24/7and have access to
information on the same basis via the Internet. Search engines such as
Google have made it possible to gather timely information quickly. It has
been argued that technology has allowed individuals and smaller
organizations to connect to the worlds knowledge pools to create an
unbelievable set of opportunities for collaboration in supply chains.
The type of product, volume of movement, ship distances, and other factors
influence which mode would have the lower total system cost. (This concept
will be discussed more in Chapter 2.)The initial focus on physical distribution
or outbound logistics was logical since finished goods were usually higher in
value, which meant that their inventory, warehousing, materials-handling,
and packaging costs were relatively higher than their raw materials inputs.
The impact of transportation selection was, therefore, usually more
significant.
Managers in certain industries such as consumer packaged and grocery
products, high-tech companies, and other consumer product companiesas
well as some academiciansbecame very interested in physical distribution
management. A national organization, the National Council of Physical
Distribution Management (NCPDM), was organized to foster leadership,
education, research, and interest in this area. The 1980s, as noted earlier,
was a decade of change with the deregulation of transportation and financial
institutions. The technology revolution was also well under way.
During the 1980s, the logistics orintegrated logistics management concept
developed
in a growing number of organizations. Logistics, in its basic form, added
inbound logistics to the outbound logistics of physical distribution (see
Figures 1.1 and 1.2). This was
a very logical addition since deregulation of transportation provided an
opportunity to
coordinate inbound and outbound transportation movements of large
shippers, which
Figure 1-2
Integrated Logistics Management
Figure 1-3
Generic Value Chain
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Figure 1-4
Logistics Supply Chain
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Revenue %
At this point, a more detailed analysis and discussion of the supply chain is
appropri-ate. Figure 1.7 presents a simplified, linear example of a
hypothetical supply chain.
Real-world supply chains are usually more complex than this example
because they
may be nonlinear or have more supply chain participants. Also, this supply
chain
does not adequately portray the importance of transportation in the supply
chain.
In addition, some companies may be part of several supply chains. For
example,
chemical companies provide the ingredients for many different products
manufactured
by different companies.
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