Advantages of supply chain management Essay

One is cost advantage. Companies that have implemented supply chain management have a 45% supply chain cost advantage over their competitors. [1] Price of raw materials and end product are optimized due to collaboration between two parties. The sharing of vital information in the early stage of development, and the effective communication of methods and requirements allows parties within the supply chain to effectively benefit each other in terms of cost. Another is faster time to market. Companies met their promised delivery dates 17% faster than their competition. [2] Through early information and forecast, suppliers can also efficiently design their production and implementation process through collaboration. This allows supplier to reduce the lead time to produce their products within the supply chain. Disadvantages of supply chain management over traditional competitive procurement processes. First is the difficulty of maintaining supply chain relationship. Supply chain relationships are probably the most fragile and the most susceptible to breaking down. [3] This is because a poor relationship at any part of the supply chain can cause major problems to the entire supply chain. In today’s global market, the customers have the power over the suppliers. Everyone else in the supply chain must quickly satisfy the demands or else face the possibility of loosing them. Another disadvantage is the need to share vital information for collaboration purposes which leaves a company vulnerable to illegal copying of ideas or methods. Although these can be safeguarded by proper agreement between parties, but the forces of market competition may compel violations of agreement intentionally or unintentionally.   If supply chain management is actually a superior way of managing procurement and production, how (if at all) does that modify any of the economic `big ideas` we examined in Module 1?   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Supply Chain Management plays a major role in the concept of supply and demand. With parties closely related through collaboration, the identification of demand which is needed by the suppliers to support the collaborative company is easy, allowing suppliers to maximize profit given the level of demand. On the side of the collaborative company, the control of supply of raw materials is easy, which again would allow them to optimize profit. References: Ferguson, B. (2000). Implementing Supply Chain Management. Retrieved December 3, 2006 from http://www.apsreview.com/archive/spring2004/images/APICS.pdf    [1] See Implementing Supply Chain Management at http://www.apsreview.com/archive/spring2004/images/APICS.pdf    [2] See Implementing Supply Chain Management at http://www.apsreview.com/archive/spring2004/images/APICS.pdf    [3] See Implementing Supply Chain Management at http://www.apsreview.com/archive/spring2004/images/APICS.pdf