Term Paper on "Logistics Supply Chain Management (Scm)"

Term Paper 12 pages (4395 words) Sources: 1+

[EXCERPT] . . . .

Logistics

Supply Chain Management (SCM):

Supply Chain Management -- SCM enables businesses to have an enhanced understanding of the activities that offer component level materials for their end product. Through proper focus on SCM, companies can immensely enhance operational efficiency. SCM seeks to help businesses to curb costs by revealing the problems in their important relationships with the internal suppliers and external vendors. Thus the basic concern is the urgency to realize customer demand and align with the supply side of the business. In achieving this, organizations are able to cut costs or also to eliminate costly overruns and ensure proper management of the inventory of the products so that there is no shortage of products or excess of it either. To help accomplish this, SCM software helps in several ways through different implementations.

Fundamentally, SCM connects suppliers to databases which are able to display forecasts, shipping, current inventory or logistics timeframes inside the customer organization. Through allowing the suppliers such access, they are able to meet the demands of the customers in a better manner. To take an example, the supplier will be able to make amendments to his shipping schedules to make sure that their customers possess the inventory needed to meet the requirement of the customers. Suppliers will be able to download forecasts into their own production systems to automate their internal processes also. In case of a normal retail/supplier relationship, the retailer has traditionally been responsible for inventory management inclusive of monitoring customer demand, inventory, and placing orders to the suppliers. Allowing the suppliers access to the retailer's inventory and sales activities helps the supplier to efficiently manage its product manufacturing and monitor its supply chain in a better manner. (Enterprise Applications: A conceptual Look at ERP, CRM and SCM)

Warehousing and modern SCM:

In the past, warehouses catered primarily as storage facilities. Raw materials arrived or finished products departed from warehouses, and companies made improvements in the event only when problems happened or the space became restricted. Presently the role of warehouses transcend beyond just storing materials, merchandise or finished goods; they have come to be an important piece of supply chain that is inclusive of such value-added services like packaging, kitting or light assembly. Warehouses are also crucial in terms of customer service and satisfaction. An effective warehouse continually gives the right product to the right place on time that can offer a competitive edge. Adept operations are also able to minimize operating costs and offer improvement to profits. The ideal strategy for improvement the warehouse environment begins with undertaking a holistic viewpoint. (Taking a Lean Approach to Warehousing)

The present era calls for following the lean approach initiated by the legendry Henry Ford and further refined by the Toyota Production System the characteristic of which is the persistent elimination of waste and a culture devoted to constant improvement. It has been acknowledged that lean is a culture and not just a particular process or plan wherein a culture of continuous progress has to be the objective. In order to change over to lean, warehousing needs crucial change in the warehousing operations along with a commitment at every level of the organization to look for means to perform all activities in an improved, faster, with less of errors and with less waste. Executing a lean approach at the warehouse level often needs gathering data, analyzing it and making crucial changes- at least in the early stages. The present warehouse operations are so entwined that it is almost impossible to change one process without impacting the others. Due to this the Supply Chain managers are taking a holistic view appreciating that all the pieces should fit together without any problems. Nevertheless, these experts also realize that they should improve upon the individual processes with a view to integrating them into the redesigned system in order to make the warehouse more lean and effective-oriented. (Taking a Lean Approach to Warehousing)

Modifications in the supply chain, expectations of the customer, and marketing conditions are putting considerable pressure on warehousing. In the modern era, warehousing needs are presently assessed on a total supply chain basis. The conventional roles of warehousing that include transportation management; inventory management, storage, and customization imply that warehousing have a significant place within the supply chain. There are at least four promising responsibilities for the warehouses in the supply chain. The first of these roles is that warehouses function as flexibility provider. Both the users as also suppliers of warehousing agree that warehousing constitute a basic source of supply chain flexibility. Flexibility normally needs space and labor, as also information. The warehouse is sometimes a low-cost base of all of these resources. Besides, the warehouse can function as an important source of knowledge for the supply chain. Information on customization, inventory, receiving, and accurate delivery stipulations is important for seamless operation of the supply chain, and the warehouse personnel's knowledge of customers, carriers, and geography are capable of affecting product and marketing strategy as the warehouses are the final stop in front of the customer. (News: The Evolution of Warehousing)

This means that maximum knowledge is present which normally nobody has. The warehouse might also serve as the supply chain coordinator. The warehouse organization is uniquely built-in to a broad supply chain role due to its position inside the supply chain. This is due to the fact that a warehouse generally involves more than one or two members of the supply chain consisting of inbound as well as outbound carriers, the owner of the goods, the owner's customer, and the information providers. It might also possess several contacts with the partner of the supply chain. This apart, the warehouse is progressing in the sphere of marketing also. Warehouse is being positioned to play three crucial support roles as regards logistics, capabilities, and credibility. Marketing depends in the warehouses to supply customer and market feedback and also utilizes it as proof of company capability and reputability in the view of third-party logistics firms. (News: The Evolution of Warehousing)

Use of latest technology in Supply Chain for Warehouse management:

Radio Frequency Identification -- RFID is fast gaining an important footing in certain areas of the supply chain like that of warehouse management and inventory control. Several technologists and business leaders across supply chain enterprises acknowledge that RFID is the next breakthrough technology in the Supply Chain space. However, some skeptics argue that their short-term return on investment -- ROI is unable to justify the start-up costs of adoption, process re-engineering, re-tooling and integration of RFID. Regardless, of these concerns, analysts have prophesized that major growth in RFID is in store for RFID supply chain management during the forthcoming years. For instance, Venture Development Corporation anticipates the global delivery of RFID systems in areas of manufacturing, logistics, and retail markets to attain $4 billion during the year 2007, a rise from $1.25 billion in the year 2004. (Emerging Trends in RFID: Business Process Innovations)

Role and trends of Packaging in SCM (Case Study of Nestle)

Nestle is wholeheartedly dedicated to continue progress in pursuit of packaging solutions that will contribute to a better environment. Package is definitely essential from the point-of-view of both Nestle and that of the consumer as well. It guarantees the safety and quality of products right from the stage of manufacture to that of storage, distribution and also it pertains to consumption. Apart from that packaging contributes to improving the product appeal, offers convenience, communicates information relating to nutrition and providing of instructions, and might also include characteristics relating to tamper-evidence. Packaging can also assist in preventing or reduction of product waste. Nestle uses a large variety of packaging materials to ensure that their products would be able to reach their consumers in the same manner they left the factory. The various materials used for packaging are cartons, paper sacks, corrugated fiberboard boxes, rigid plastic packaging, metal cans, plastic laminates, and glass packaging. Nestle sources its materials for packaging from a wide variety of packaging suppliers both at the local level as also from other countries of the world. (Nestle Australia Ltd.: National Packaging Covenant)

Overall, over more than 200 companies are being involved in the Nestle packaging supply chain, with major suppliers inclusive of signatories to the Covenant like Visy, Amcor and Carter Holt Harvey. Nestle communicated to their packaging suppliers during the year 2002 and also in the year 2003 sharing with them the environmental commitments in relation to Nestle, and the Advanced Manufacturing Centre's "Purchasing Guidelines for the Environment" as being developed by the Food Industry Waste Minimization Program of which Nestle was a participant as well as that of the NPC Action Plan. Nestle asked its suppliers to join them in supporting the Covenant and the requirement of Nestle that it wants the suppliers to be signatories to the National Packaging Covenant. In keeping with the Nestle Policy on the Environment, the company supports an integrated approach in relation to packaging waste minimization which supports the level of reduction… READ MORE

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