Advantages of Supply chain management Essay

Explain the advantages and disadvantages of implementing a Supply Chain Management ( SCM ) system.

The advantages and disadvantages of Nike implementing a supply concatenation direction system include cost of purchasing and managing stock list, treating orders, and information systems support.

Advantages of implementing a ( SCM ) by Nike

By implementing the procedure of supply concatenation direction, Nike will be able to put up webs and installations that transforms natural stuff into merchandises that will be delivered to clients. This will give Nike a immense advantage over their rivals by assisting them use information more expeditiously along the full concatenation which can ensue in important cost nest eggs, it besides helps modulate the motion of stock list coming in and traveling out of the organisation, orders will be process much faster than formal times, and predictable bringing with updated information system. The webs in each degree must handshake or interact to assist link providers to the Manufacturer, to the retail merchant so the finished merchandise is bringing to the client in just-in-time ( JIT ) .

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Implementing supply concatenation direction will enable Nike to be more effectual and efficiency besides transit costs will be reduced, cost of stock lists will be just and cheap, increase figure of capable providers, it maximizes the agencies of conveying messages and information efficaciously within the organisation and it will assist Nike accommodate to engineering alterations more rapidly than earlier. SCM will besides assist Nike derive the buy-in of all cardinal markets, increase supply concatenation velocity and the bullwhip consequence.


Implementing Supply ironss direction in Nike had proven to be really hard in the yesteryear, this is due to the job cause by the I2 package which required important customization to do compatible with Nike ‘s bequest systems. Other ruins of implementing supply concatenation direction system is that it can go extremely complex and dynamic in the short-run, exchanging cost are comparatively high, increasing uncertainness, high competitory force per unit area impulses, addition execution costs. Developing a planning system that efficaciously coordinates information engineering and people is a considerable challenge, altering market conditions, negociating footings and conditions required immense sum of hazard and prediction.

Describe the options for geting a SCM system with the advantages and disadvantages of each option.

The first option for geting a SCM system is implementing an ERP Enterprise Recourse Planning System utilizing the SAP package ; ERP system can ease SCM Needed production planning and buying systems already in topographic point. ERP integrates gross revenues, order, stock list, maker, and client service activities. One advantage is that it allows sharing production programs along the supply concatenation to happen in existent clip and helps them find whether to purchase regionally, set up a collaborative squad or name a planetary lead purchaser. Other advantages of ERP include efficient concern procedures, stock list decrease, lead-time decrease, improved client service, improved determination devising, real-time penetration into organisation and higher profitableness. The disadvantages are the combination of the people, process, hardware, package and informations in the organisation or job in the operational, managerial, and strategic degree of the organisation. Inadequate or inconsistent informations, errors in client ID Numberss, and bad client service.

The 2nd option is implementing a Customer Relationship Management Systems. CRM supports the concern procedure of pulling, merchandising, managing, delivering, and back uping clients. CRM addresses all activities and events related to clients in a individual depository informations about all client interaction. CRM besides shops all client informations in one topographic point and do it possible to entree all informations about the client. CRM will let Nike to be more flexible, productive and efficient in managing client ‘s private information. Flexibility ensures them to acknowledge fabrication issues, to response to plan alterations requested by the market place. Nike will besides be able to response to unexpected or uncertainness the company has and will provides the agencies to set to the effects of inevitable hazards, and cut down entire costs. However, flexibleness is dearly-won, unsure environments companies with extremely flexible supply ironss perform better than companies with less flexible supply ironss while in certain environments the opposite holds. The disadvantages or implementing CRM include system overload, turnover, inconsistence informations, people and hardware and package.

Outline the natural stuff stock list buying procedure from the designation of the demand for an point to the provider payment.

To optimising and recover control over control over production planning Nike must use the attack of natural stuff stock list buying procedure to assist increase efficiency, addition lead times and to assist increase the rate in which merchandise is being delivered to the client. When a client demands for a merchandise or point, the primary retail merchants sends an order for the merchandise to the major natural stuff provider which sends the natural stuff needed for the production of the merchandise to the maker, so the maker outs all the constituents of the merchandise together and sends it the distributer. The distributer in bend purchase the require points from the makers, and so distributes the merchandises to the retail merchant which so delivers the merchandise to the terminal consumer. From the distributer point all the manner back up the supply concatenation to the natural stuff providers there is no farther injection of hard currency. The money you spend on the merchandise or equipment is passed back up to the supply concatenation as payments for Gods or natural stuff. Customer is the lone beginning of gross. By cut downing Numberss of providers and increasing efficiencies in the full distribution concatenation, makers are able to cut down natural stuffs stock list. Bennett, R.. ( 2009 ) . Trade Usage and Disclaiming Consequential Damages: The Deductions for Just-in-Time Purchasing.American Business Law Journal,46 ( 1 ) ,179. Retrieved April 21, 2010, from ABI/INFORM Global. ( Document ID:1665640451 ) .

Describe the possible booby traps that may be encountered in implementing a SCM system.

Along with the great advantages that come with exchanging to a supply concatenation direction system there are some possible booby traps that can do money loss or confusion within the system. The system will be set up with a great trade of rigidness but must besides go forth room for some exclusions because things do non ever run every bit smooth as they were planned out. The supply concatenation may non hold the same information systems so integrating the different systems and acquiring them to work together without confusion may be a difficult thing to put up and do orders to be messed up. The companies within the supply concatenation may besides hold different ends which could do the companies ideals to collide doing different undertakings to be taken with more urgency so others. The bringing day of the months may besides non fit from the provider to the retail merchants doing incorrect bringing day of the months being told to the client. Customer service outlooks may be different from company to company along the concatenation every bit good, doing different ends in quality and client support for the merchandise. Some companies will non hold a sufficient information system to have the information and relay back, which can do more confusion in the system. Making certain that everyone along the manner in the system is trained good plenty to cover with any jobs that may originate is a large aid.

Assuming a SCM system is purchased and customized ; explicate the major undertakings that need to be completed in order to implement this system. The undertakings should be presented in chronological order.

If Nike were to present the SCM system they would necessitate to get down out with puting up a scheme that the companies can hold with to maintain the system working smooth. Geting all the companies on the same page is the important first measure to puting up a SCM system and will assist the companies work together easy. Configuring the system to work with all the companies is the following measure, acquiring compatible information systems or a manner to come in the information into each information system is a key in maintaining the companies joined in the system. Making certain the restraints of the systems and demands are right for the usage each company needs them for. Calculating out the locations for all the pieces of the system is the following measure doing certain they will work together to profit the company and non do more costs to the companies. Planing the beginning of resources and the resource demands to put up and do the system functional is the following measure in the procedure of puting up. Besides doing certain that sufficient adult male power to do the system work decently is in topographic point is really of import to holding a strong SCM system. Puting up the supply concatenation controls is the following measure, and this consists of make up one’s minding which information to maintain a ticker on and the measurings needed to command the system. The public presentation of the system needs to be maintained and watched over so these ratings of the system are of import to maintaining the system good. The last measure would be developing the internal and external relationships, maintaining them working together. Identifying the systems needed to maintain the information passed to each company is really of import so the information does n’t acquire misinterpreted and orders get messed up. The key to smooth running SCM is communicating between the different sectors of the system, if they all receive the right info and can answer back easy so everyone is kept up to day of the month on the clip periods.


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