Discuss this statement true or false? What are some problems affecting supply ch

Question

Discuss this statement true or false?

What are some problems affecting supply chain management success?

There are many variables that can negatively impact supply chain.

Excessive inventory

Logistic expenses

Reduction in labor availability

Energy costs

Natural disasters (hurricane, floods, fires)

Discuss two examples of effective supply chain strategies used by a company to positively impact org-effectiveness and yield results.

Adopting a demand-driven planning system based on real-time analytics can show demand growing and shrinking.   With good-data the purchasing cycles are easily identified. While no one can factor in natural calamities like suppliers going out of business, force of nature disruptions (fires, hurricanes) having price and promotions strategies that further expand and leverage high-demand products , especially those products that experience “scarcity” (such as computer graphics cards) can lead to substantial bottom-line growth.

The agility to react to demand changes, and fine-tune inventory levels of product is crucial to meet changing demand. The old model of waiting to the end-of-month or quarter to analyze supply-chain numbers is obsolete.   The new way of doing things is more dynamic, it can react to small changes in market conditions very quickly. This affects all areas of the supply chain – supply, manufacturing, transportation, warehouse, and distribution. In essence, the new normal is “market reactive.”

References

Http://blogs.oracle.com/scm/5-strategies-for-better-supply-chain-management-in-the-current-economy.

Explanation / Answer

a)

The various issues which impact the success of a supply chain are as follows:

So the statement mentioning the problems which may impact the supply chain is TRUE.

b)

The best example of effective supply chain strategies is the Toyota production system. The salient strategies used in this system are:

The Just In Time is a demand driven supply chain model which uses pull mechanism to ensure only required amount is produced and no excess inventory is carried or generated. It uses an integrated data driven system to have visibility across the supply chain and is highly reactive to market demands. This is unlike the production oriented “push” methods that is not agile and not customer focused.

This has helped Toyota to gain significant competitive advantage.

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