Information Sharing in Supply Chain Management Essay Example

and delivery of products to improve the business processes.

Let’s view some of the definitions given by the experts in this area; “The delivery of enhanced customer and economic value through synchronized management of the flow of physical goods and associated information from sourcing through consumption. ”(La Londe, B. , 1998).

Johnston (1995) offered: “The process of strategically managing the movement and storage of materials, parts and finished inventory from suppliers, through the firm and to customers. ” Whatever be the definition, the essence in effectively coordinating all the transactions which take place in the supply chain process.

The components of Supply Chain The SCM first starts with a strategic planning for managing the resources which are required to meet the customer demand. A set of objectives and metrics are set to monitor the supply chain. The second stage is sourcing where the SCM managers set prices, delivery and payment methods.

Here, they should try to improve their relationships with their suppliers.

The third step is making of a product where the production managers in a company schedule the activities in order to manufacture the product. The next step is delivery where a firm takes orders from customers and pick the carrier to make the final delivery of the product. The last stage is return when sometimes customers are left with defective products. Here, the supply chain partners need to plan and coordinate among themselves and have a supportive attitude to help the customer genuinely.

Lean SCM and the necessary attributes As defined by Ventana Research a lean supply chain is defined as a set of processes and organizations which includes continuous flow of products

and services, finance as well as information in a collaborative manner so that there is minimum waste of resources and cost reduction. The necessary attributes of a lean supply chain include demand management, process standardization, product standardization, industry standardization, collaboration and cultural change.

The first and the foremost criteria of a lean SCM is the demand for a product.

If there is no demand for a product which enters the supply chain, there would definitely be a waste of material and waste of time as well as labour hours. This demand for product requires that it should come directly from the customer and not from some other sources like the intermediaries or the channel partners of the manufacturer who would just stock the product in the future anticipation of demand. The existing demand by the end customer becomes then essential in order to sell in the current period.

And, this demand component can be assessed to varying degrees from high to low. In case of low demand too, there will be significant negative effect on the profits made out of the sale. The magnitude of demand needs to be assessed and evaluated very carefully. An underlying fringe benefit of the above demand estimation is that the sales forecasting and the forecasting related to purchase of raw materials and inventory control becomes much easier. Another important aspect of supply chain is process standardization which enables continuous flow in a company.

In a company, where there are different product lines and the processes are identical to all the products, the company has significant advantages.

The primary benefit of process standardization enables a company to produce whichever product

is currently in demand. And, the second most important benefit is the company can shift it’s production from one supply partner to other. Both these benefits enable a smooth supply chain process and because of which there is also a standardization of information regarding the production, purchase or supply of a product.