After reviewing the video, please do a comparative analysis of what you learned in the textbook reading assignment and video. Describe the pros and cons of the supply chain management process.
Comment on at least two posts below. Require to comment at least 300-400 words with reference
Supply chain management is extremely important in every industry out there – not just in aviation, and not just in companies that deliver tangible products. Everything we as end-user consumers receive, whether it is a tangible product or an intangible service, has been a part of a supply chain at some point. Like the person in the video mentioned, nothing in manufacturing is free. A water bottle is a pretty good example of a tangible product, and hotels are great examples of manufacturers of experiences vs. things that the consumer can take home with them. It is important for managers in manufacturing both tangible products and intangible services to understand that everything comes at a cost, and that nothing is really free. This is why, to bring in a profit, it’s important to ensure that operations are streamlined and extraneous expenditures are minimized where possible.
One of the most obvious advantages of supply chain management is that it gives managers a quite detailed look into the manufacturing processes in their specific organizations, and allows them to gauge the likelihood of future supplier relationships that will reduce outright expenditures. By working with a supplier that understands the needs of the manufacturing business and ensures that whatever they supply toward the end result will positively impact the product, the business will be able to better achieve its goals. Communication and collaboration between managers in different organizations is essential to ensuring efficient product manufacturing and deliveries that meet established quotas and deadlines. Another advantage of SCM is that it allows management to make changes to production where necessary. If managers determine that a supplied material is not holding its own or is not positively contributing to the end result, they can choose another product or supplier that will better address their business needs and goals for the future. This might take some time as most manufacturing partnerships are bound by contracts, but once a contract is up neither side is under any obligation to renew it. Because of this, competition between suppliers for new contracts and renewals is fierce.
One of the biggest disadvantages of SCM is that if issues come up, the production process could slow down or come to a halt. A notable instance of this in recent news is the availability of Apple’s new iPhone X – a lot of people want it, but Apple can’t keep up with the demand because they can’t find a supplier that can manufacture as many OLED screens as will meet demand (Duggan). Also, manufacturers may find down the line that supplied products or materials do not meet the needs or specifications of the final product – and this could cause potential safety issues if good risk assessment procedures are not leveraged in SCM. As we all know, safety issues can bring considerable exposure for companies when they go public – which could be a death sentence for many organizations. A good example of this was the Firestone/Ford Explorer tire fiasco that happened back in the 90’s. Firestone supplied OEM tires for new Ford Explorer SUVs, and many of these tires failed and caused fatal rollover accidents (Greenwald). Firestone and Ford got into a very public argument over who was at fault and Firestone’s reputation tanked considerably because they were found to be chiefly at fault by NHTSA. To this day, Ford and Firestone still refuse to do business with each other.
Duggan, W. (2017, December 4). Unclear iPhone X Demand Limits Apple Suppliers. Retrieved December 7, 2017, from https://money.usnews.com/investing/stock-market-news/articles/2017-12-04/apple-inc-aapl-stock-iphone
Greenwald, J. (2001, May 29). Inside the Ford/Firestone Fight. Retrieved December 07, 2017, from https://content.time.com/time/business/article/0,8599,128198,00.html
The video was very informative in a casual way and dealt with mainly the cost of Supply Chain Management (SCM). The text was much more detailed and describes the different components that make up the supply chain.
Proper Supply Chain Management (SCM) is imperative to maintaining a company’s’ viability. On page 181 our text brings up one of the cons of SCM, how to manage supply chains as companies merge. As smaller companies who may not have had the exposure to “Lean Manufacturing” and “On-Time Delivery” are purchased and absorbed by larger companies proper implementation of these these and other concepts of SCM can make or break a successful merger.
As a person who worked at a small family run business, that over the years has been purchased by an investment group, who left the family in charge, then another larger investment group, who brought in a couple new managers, then purchased by Sikorsky, then by United Technologies, then sold to Lockheed Martin, I have seen plenty of Supply Chain Management Styles. The same SCM system does not work the same for everyone. Part of SCM is the proper introduction of the lean process. When companies policies and process are dumped down stream consideration needs to take into account how those downstream operate. What works at Lockheed Martin building F-35’s and at Sikorsky building S-92’s and S-76’s doing the same repetitive manufacturing process, may not work for a small group making one of a kind custom cabinetry. Having a six month supply of raw material may be able to be reduced to three months if there is a repetitive and high demand of Widget-X. If a lower production rate only uses one Widget-X every nine months, but every six months with out usage the system deletes that Widget-X from inventory and there is a three month lead time to get Widget-X from the manufacturer, there is a problem with SCM.
In a nutshell SCM must be tailored to fit the requirements of the situation. Yes SCM is about reducing cost while adding benefit to the whatever goods or services are being produced, it is not one size fits all. Learning what works requires and open mind, flexibility, and communication up and down the chain.