Supply Chain Improvement Essay

Increasingly important in supply chain practice are attempts to improve supply chain performance. These are usually attempts to understand the complexity of supply chain processes; others focus on coordinating activities throughout the chain. •The SCOR model The Supply Chain Operations Reference model (SCOR) is a broad, but highly structured and systematic, framework to supply chain improvement that has been developed by the Supply Chain Council (SCC), a global non-profit consortium.

The framework uses a methodology, diagnostic and benchmarking tools that are increasingly widely accepted for evaluating and comparing supply chain activities and their performance. Just as important, the SCOR model allows its users to improve, and communicate supply chain management practices within and between all interested parties in their supply chain by using a standard language and a set of structured definitions. The SCC also provides a benchmarking database by which many companies can compare their supply chain performance to others in their industries and training classes. The effects of e-business on supply chain management practice New information technology applications combined with internet-based e-business have transformed supply chain management practice. Largely, this is because they provide better and faster information to all stages in the supply chain. Information is the lifeblood of supply chain management. Without appropriate information, supply chain managers cannot make the decisions that coordinate activities and flows through the chain. Without appropriate information, each stage in the supply chain has relatively few cues to tell them what is happening elsewhere in the chain.

To some extent, they are ‘driving blind’ and having to rely on the most obvious of mismatches between the activities of different stages in the chain to inform their decisions. •Information-sharing If information had been available and shared throughout the chain, it is unlikely that such wild fluctuations would have occurred. It is sensible therefore to try to transmit information throughout the chain so that all the operations can monitor true demand, free of these distortions. An obvious improvement is to make information on end-customer demand available to upstream operations.

Electronic point-of-sale (EPOS) systems used by many retailers attempt to do this. Sales data from checkouts or cash registers are consolidated and transmitted to the warehouses, transportation companies and supplier manufacturing operations that form their supply chain. Similarly, electronic data interchange (EDI) helps to share information. •Channel alignment Channel alignment means the adjustment of scheduling, material movements, stock levels, pricing and other sales strategies so as to bring all the operations in the chain into line with each other.

This goes beyond the provision of information. It means that the systems and methods of planning and control decision-making are harmonized through the chain. For example, even when using the same information, differences in forecasting methods or purchasing practices can lead to fluctuations in orders between operations in the chain. One way of avoiding this is to allow an upstream supplier to manage the inventories of its downstream customer. This is known as vendor-managed inventory (VMI).