: Supply Chain Management Is Primarily of Interest to Manufacturing Firms

1013 Words Apr 11th, 2013 5 Pages
Overview
Supply chains are networks of organisations, information, technologies, activities and resources involved in the movement and conversion of physical goods or services from suppliers to end consumers. These different organisations are interlinked by physical, information and monetary flows. Organisations create value by transforming raw products into finished goods or repositioning of resources thru space and time, which is based on networks of supply chains. Both ways, it involves the movement and conversion of physical goods and information throughout supply chains across the world. Therefore organisations and supply chains are closely interlinked in the creation of value for its customers. Manufacturing firms produce goods for
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Transportation systems as part of the supply chain plays an equally important role for manufacturing firm’s success. To reduce inventory holding levels many manufacturing firms are running on a lean basis where they practice Just-In-Time delivery to meet production schedules. Transportation networks to customers have to be equally efficient to reduce lead time in accordance to lean manufacturing.

Many manufacturing firms leverage supply chains to achieve competitive advantages in their markets. the case study on Procter & Gamble (Bozarth & Handfield, 2006: Pg 91-92) is a good example of how a manufacturing firm leverages on their supply chain to improve on their effectiveness and lowering cost. Procter & Gamble used to operate under five different business sectors according to different product lines such as paper goods and healthcare products in the mid 1990s. Originally this makes good sense to Procter & Gamble to better manage its’ diverse business. However for the retailers and customers of Procter & Gamble who is purchasing with all the different five entities, it also meant different order processing, invoicing and deliveries when at the core the five entities are all under the same company. For Procter & Gamble it also a logistical nightmare as they faced issues with high volume of orders which resulted in errors, inefficient

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