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Article Review

Group 1G:
Akash Sangwan (2016PGP005)
Alok Kumar Singh (2016PGP008)
Md Bilal Shakir (2016PGP033)
Sayantan Sarkar (2016PGP050)
Tarun Arora (2016PGP054)
Vineela Yegireddi (2016PGP059)

Introduction to Supply Chain Management


This article introduces supply chain management. The article examines
the fundamentals of supply chain management and provides a framework
for choosing the right supply chain to fit the product a company is making
and the environment it is in. Using examples such as P&G, Dell, Zara,
Seven Eleven Japan (SEJ) the article describes how a successful supply
chain strategy can provide companies with increased market share,
reduced costs, and improved customer service.

The article talks about the importance of a well-orchestrated supply chain


in enhancing the competitiveness of a company. Taking the example of
Dell, it is able to extract more information about its customers by exerting
more control over its supply chain and this helps in modifying strategies
as per consumer needs. This gives Dell a competitive edge over its
competitors.

Two key issues for the success of the supply chain are highlighted in the
article. First is co-ordination and collaboration and second is the value of
information sharing. Co-ordination and collaboration refers to the entire
supply chain working as a single entity. It helps in seeing the bigger
picture and focussing more on the goals of the whole entity instead of
seeking individual benefits. Information sharing includes recognizing the
data and using it to the fullest. It helps in capacity planning, production
schedules, promotion plans, demand forecast etc. But it requires deep
trust as the information shared could also be misused to harm the
company.

Next, it goes on to define the supply chain management. It is the effective


control of the flows of material, information and finance in a network
consisting of suppliers, manufacturers, distributors, and customers.
Companys supply chain strategy should be coordinated with the product
characteristics. Supply chain strategy not matching with the product
strategy is one of the key reasons for failure. For example, a supply chain
aimed at reducing cost can be ineffective in case of high end products.

One of the major factors in the development of supply chain is forecasting


demand with high accuracy. There is always some uncertainty associated
with the demand. The uncertainty associated with demand is usually
divided in two categories Functional and Innovative. Functional products
having a long product life cycle thus have a highly stable demand whereas
Innovative products on the other hand have short product life cycle and
hence its demand experiences high volatility.

Similarly, from the supply side also there are two types of uncertainty.
First is the stable supply in which manufacturing process and underlying
technology is mature, while 2nd is the evolving supply in which the process
as well as the technology is under development and constantly changing.

Next it talks about the 4 supply chain strategies. These are:

i) Efficient supply chains Focusses on increasing the cost


efficiencies of the supply chain
ii) Risk hedging supply chains It focusses on pooling and sharing
resources in a supply chain to hedge against the risk
iii) Responsive supply chains It is reactive to the changing
customers needs and is useful when the demand is highly
unpredictable
iv) Agile supply chains It is a mixture of risk hedging and
responsive supply chains, i.e. it reacts to changing consumers
needs while hedging against the risk