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Supply Chain Management Essay

3396 words - 14 pages

A. A supply chain strategy appears in many different forms and varieties; picking the right strategy is the hard part. When deciding on a strategy, the goal is to pick the correct one that will benefit your specific organization and area. There are six different strategy associated with supply chain management: Many supplier, few suppliers, vertical integration, a combination of the two referred to as a joint venture, Keiretsu, and a virtual company (Hiezer). The first couple of the strategies have a company rely heavily on external suppliers for their goods and service. Not necessarily working in conjunction with the organization business strategy, but aggressively compete with other ...view middle of the document...

The final strategy relies on several business relationships to meet the company’s demands; virtual companies allow boundaries to be flexible and to respond quickly to a changing market demand. Virtual company’s alliances can vary from a relatively formal relationship, to a casual one where the relationship is completely based on one specific proposal.
In the ever advancing fast pace world of technology, costs can be astronomical for a new company just starting up. Applying the right supply chain strategy is crucial to the power tools organizations future success, knowing that they can count on others for information and quality is essential. The Keiretsu strategy, if done vertically, could benefit the power tool company by entering into these strong partnerships with organizations with the same production and distribution lines. It’s vital for the power tool company to enter into these joint ventures with organization that share similar goals. The purpose of supply chain management is the movement of inventory in an efficient manner, while improving trust and collaboration among selected partners. The Keiretsu system helps alleviate possible issues by ensuring the continued business relationship in the long run by working together to maximizing profits for both organizations. This strategy reduces the potential risk of failure, based on the trust relationships built within the coalition. “A great supply chain strategy, linked with operational excellence, can provide success for not only the company in question but also its partners and customers” (Happek, March 2005). Of course every decision comes with it criticism or disadvantages, it not any different for the Keiretsu strategy. This system could be seen as old school, even possibly be viewed as monopolistic and limiting on competitive markets. For this reason I was reluctant to recommend this system, however, it benefits for future success based on the aligning partnerships far outweigh their disadvantages.

B. In supply chain management, it’s very important to measure performance strategies, if there was no way to measure than how would it be possible to improve a company’s bottom line. There are different metric that help executives measure how well or efficient a manufacturing facility is running. The process is developed to improve quality and in the end customer satisfaction. There are several different metrics that can be looked at to identify and quantify the impact of changes. With increased competition, improving performances throughout an organization is become ever so important. The metrics we will analysis will be inventory both levels and turnovers, weeks of supply, quality in percent of rejects, and delivery and lead time.
Inventory turnover ratio in the most commonly used ratio in a supply chain strategy, it looks at the amount of times that the inventory cycles per year. It is calculated by taking the annual cost of goods sold and dividing by the...

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