Free Other, Supply Chain Management Term Paper Sample
A purchase order is usually created for one-time purchase of several items. The details of the services and goods, their cost and delivery schedules are known therefore the purchase order can be encumbered as well upon need. In case of blanket purchase orders, the details of the services and goods are known but those of delivery schedules aren’t. The range of services is defined narrowly and may not be used for appliances or equipment purchase. Both types of orders have the maximum duration of one year and regardless of the initiation time they expire when the fiscal year ends.
Since blanket purchase orders do not seek bids, they can save time for not just the suppliers but buyers as well. This type of order also allows the customer to negotiate for each item before the actual purchase is done.
Customer satisfaction must be the foremost, prime and principle objective of any company which seeks to be successful. The supply chain management of the automotive manufacturer company that strives to be number one in customer satisfaction must work for these goals in order to meet its corporate objective.
It must struggle to efficiently match supply and demand with the help of cross chain resources. It also has to effectively coordinate with the supply chain partners for timely and efficacious management. This would hence facilitate the financial success of the automotive manufacturer as well.
The management must focus on the value creation for its customers and generating the need for a supply chain by improving the performance . This consistent objective must revolve around exceeding or at least meeting the customer requirements.
In the current business environment, a number of forces shape and modify the ways through which a business could operate and survive. The chain management should be responsive to subtle change and build network resiliency to handle sudden and unexpected supply chain disruptions.
Uncertainties are an integral part of business and extremely challenging to handle. Effective strategies and appropriate measures must be taken to reduce or at least manage them for success. Product quality is greatly influenced by the supply and purchasing management .
Two basic strategies could be used for reducing uncertainties associated with supplier quality and achieving better supply chain flexibility. They have been classified in to proactive and reactive techniques. Both of them focus on the redesigning and buffering respectively with an objective of producing the products acceptable to the clients.
Uncertainty in supplier delivery is usually caused by some sources involved in the supply process. They might include emergency in supply process, characteristics of the component’s production, disruption in supplier production and constraints regarding supplier’s capacity. They might affect the regular production and hence supplier delivery. The overall process must be improved by purchasing and strictly controlled with the strategies already defined for handling the above mentioned factors.
If the purchaser tries to get in to the global competition, long order cycle times can consequently be reduced. A part from this, the incorporation of effective management, total cost management and integrated logistics could also be helpful.
Inaccurate demand forecasts often take place when the new components are incorporated in to the existing products. This can be reduced significantly by using material requirement planning which is an automated ordering system. When the material request is directly forwarded to the suppliers, the demand patterns can accurately be forecasted.
Timing is extremely crucial in all sorts of fruit businesses. The major uncertainties associated with the food processing companies often revolve around the seasonal climatic variation. This, in most cases, can’t be predicted accurately. This is then directly linked to the transport infrastructure of the area and extent of willingness of foreign airlines for routing the airplanes for carriage and transportation in flexible time frames. A part from this, inherent political risks e.g. government stability, changes in law pertaining especially to transportation, storage and cost effectiveness are among the main sources of uncertainties for such a business. The long term and short term financing particularly about speed of planning permission and development costs also act as major element in this regard. Several companies also go for supplier diversity programs based on social considerations. The uncertainties could be handled if these food manufactures collaborate with such programs.
The integrated approaches are the best solutions . In the black box approach, the supplier provides a design which is purely of its own and made without any involvement of buyer party. The supplier has the empowerment to design the given component according to the performance specifications of the buyer. This can’t be done without the element of trust between both parties. Buyer particularly relies on supplier for the manufacturing of subassembly which would accurately compliment the new service. On the other hand, gray box approach is a comparatively formal. Several activities occur directly between the buyers which include joint design, testing and prototype manufacture etc. and the supplier isn’t empowered to design anything without the mutual consent and approval of the buyer.
In the business of the smart phones, the buyer already has an idea about the key features of the gadget he is going to buy. The supplier hence can design the given component based on the buyer’s requirement without his much involvement. But this depends on the kind of the component being designed. In the same case, the buyer might want to indulge in the designing process and suggest at various stages regarding improvements or modifications. Therefore, in such a business, both the approaches could be used depending upon the desired component.
The models in the businesses have been evolved and improved according to the contemporary needs. The pitch of a traditional model needed to cover maximum benefits a product could offer, including the features because the salesman had no idea about it. It was generic with almost no followed up after the completion of the transaction. Such a model is based on a short term relationship between buyer and seller which isn’t durable. Moreover, its focus is probably short sighted or replaced. Contrary to that, the collaborative model is based on long term commitment between buyer and seller and focuses on their durable collaborative relationship. It is favorable in this particular instance because it involves direct and frequent interaction between buyer and seller. Sustaining resources, values, ethics and strategic alliances are the key features of this relationship. Unlike traditional models, it emphasizes on the sales professionally focusing on the target and effective collaboration. Such a model is most successful one in the current market because customers seek reliable resources for long term relationships. These features are, however absent in the structure of traditional models.
Monczka R., Handfield R., Giunipero, L., and Patterson, J. (2015). Purchasing and Supply Chain Management (6th edition). Southwestern, Cengage Learning.ISBN-13: 9781285869681 | ISBN-10: 1285869680
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