Introduction

The best companies around the world are discovering a powerful new source of competitive
advantage. It's called supply-chain management and it encompasses all of those integrated
activities that bring product to market and create satisfied customers. The Supply Chain
Management Program integrates topics from manufacturing operations, purchasing,
transportation, and physical distribution into a unified program. Successful supply chain
management, then, coordinates and integrates all of these activities into a seamless process. It
embraces and links all of the partners in the chain. In addition to the departments within the
organization, these partners include vendors, carriers, third party companies, and information
systems providers.

Within the organisation, the supply chain refers to a wide range of functional areas. These
include Supply Chain Management-related activities such as inbound and outbound
transportation, warehousing, and inventory control. Sourcing, procurement, and supply
management fall under the supply-chain umbrella, too. Forecasting, production planning and
scheduling, order processing, and customer service all are part of the process as well.
Importantly, it also embodies the information systems so necessary to monitor all of these
activities.

Simply stated, "The supply chain encompasses all of those activities associated with moving
goods from the raw-materials stage through to the end user." Advocates for this business
process realised that significant productivity increases could only come from managing
relationships, information, and material flow across enterprise borders. One of the best
definitions of supply-chain management offered to date comes from Bernard J. (Bud)
LaLonde, professor emeritus of Supply Chain Management at Ohio State University.
LaLonde defines supply-chain management as follows: "The delivery of enhanced customer
and economic value through synchronised management of the flow of physical goods and
associated information from sourcing to consumption.”As the "from sourcing to
consumption" part of our last definition suggests, though, achieving the real potential of
supply-chain management requires integration--not only of these entities within the
organisation, but also of the external partners. The latter include the suppliers, distributors,
carriers, customers, and even the ultimate consumers. All are central players in what James E.
Morehouse of A.T. Kearney calls the extended supply chain. "The goal of the extended
enterprise is to do a better job of serving the ultimate consumer”, Superior service, he
continues, leads to increased market share. Increased share, in turn, brings with it competitive
advantages such as lower warehousing and transportation costs, reduced inventory levels, less
waste, and lower transaction costs. The customer is the key to both quantifying and
communicating the supply chain's value, confirms Shrawan Singh, vice president of
integrated supply-chain management at Xerox. "If you can start measuring customer
satisfaction associated with what a supply chain can do for a customer and also link customer
satisfaction in terms of profit or revenue growth," Singh explains, "then you can attach
customer values to profit & loss and to the balance sheet."
Task 1: Understand the relationship between supply chain management (SCM) and
organisational business objectives

Task 1.1: Explain the importance of effective supply chain management in achieving
organisational objectives

In the ancient Greek fable about the tortoise and the hare, the speedy and overconfident rabbit
fell asleep on the job, while the "slow and steady" turtle won the race. That may have been
true in Aesop's time, but in today's demanding business environment, "slow and steady" won't
get you out of the starting gate, let alone win any races. Managers these days recognise that
getting products to customers faster than the competition will improve a company's
competitive position. To remain competitive, companies must seek new solutions to
important Supply Chain Management issues such as modal analysis, supply chain
management, load planning, route planning and distribution network design. Companies must
face corporate challenges that impact Supply Chain Management such as reengineering
globalisation and outsourcing. Why is it so important for companies to get products to their
customers quickly? Faster product availability is key to increasing sales, says R. Michael
Donovan of Natick, Mass, a management consultant specialising in manufacturing and
information systems. "There's a substantial profit advantage for the extra time that you are in
the market and your competitor is not," he says. "If you can be there first, you are likely to
get more orders and more market share." The ability to deliver a product faster also can make
or break a sale. "If two alternative products appear to be equal and one is immediately
available and the other will be available in a week, which would you choose? Clearly,
"Supply Chain Management has an important role to play in moving goods more quickly to
their destination."

An example of a Supply Chain Management application:

To Reduce Cycle Time, Kick Those Bad Habits. One of the chief causes of excessive order-
to-delivery cycle times is the existence of longstanding "bad habits" that result when
companies fail to revise internal processes to reflect market changes. The existence of
separate, independent departments tends to perpetuate these inefficient practices. Taking the
supply-chain management view, on the other hand, helps companies identify the cumulative
effects of those individual procedures. Eliminating such bottlenecks improves product
availability and speeds delivery to customers--both of which can increase sales and profits.
The case: Consultant R. Michael Donovan illustrates the point with the tale of a client that
manufactures a made-to-order machine part. Average order-to-delivery time varied between
six and nine weeks. As a result, the manufacturer was losing business to "replicators" that
could produce low-quality "knockoff" versions in just three weeks. Donovan and his
colleagues analyzed the manufacturer's entire supply chain, from order entry and raw-
materials supply all the way to final delivery.

They found problems at every step of the way: Handwritten orders were being rekeyed
into the materials-planning system on weekends, which meant that some orders were sitting
around unprocessed for an entire week. On Monday mornings, production control would be
overwhelmed with a week's worth of orders. It often took them several days to plough
through the backlog and issue manufacturing orders.

Once those orders had been cut, the engineering department required one week to produce
technical drawings. They needed several more days to match up drawings with orders and
other documentation. Those information packets then would go to the manufacturing line,
where the scheduling system allowed three weeks' time for production. "Orders could be
sitting there for almost three weeks before going into production, even though the actual time
required to produce an item ranged from a few hours to one full day," Donovan recalls.

The solution: Supply Chain experts were able to slash order-processing time, including the
generation of engineering drawings, from about two and a half weeks to one day. They made
some alterations to the manufacturing process to speed up production. While they were
cutting waste out of physical processes, the consultants also were finding ways to speed up
the flow of information and to improve the accuracy of production orders. Today, materials
flow is closely correlated with information flow, and lead-times have been cut from an
average of six to nine weeks down to fewer than three weeks.

The payoff: The payoff has been enormous. Instead of steadily losing market share to the
replicators, the manufacturer has doubled sales volumes. It has reaped an added benefit as
well, because quality remains very high, the manufacturer has been able to charge more for
its products, generating even greater profits. Donovan proudly notes that this radical change
was achieved with technologies the manufacturer already had. "We didn't change the
technology, we just changed how it was applied," he says. "The magic is not in the software.
Information technology should not be the driver of re-engineering the order-to-delivery
process," he concludes. "It should enable you to achieve your objectives."

Task 1.2: Explain the link between supply chain management and business functions in
an organisation

SCM and outsourcing have both been given increasing attention since their applications were
recognised by many as significant profit and performance enhancers. Every business is a part
of a big SC and supply network (Handfield and Nichols, 1999). Nevertheless, the
management of a company could choose to either;

a) Implement only SCM, or

b) Implement only outsourcing or
c) Implement both outsourcing and SCM.

The decision to apply either outsourcing or SCM or even both rests on the management’s
readiness to face the consequences each application brings. As outsourcing may increase
organisation’s operating flexibility and allows the transfer of operational risks to another
party, SCM though utilises more resources in a way gives the organisation direct involvement
with each stage of every processes and functions, and thus allowing clearer view and direct
control for improvements. A fine example of situation (a) is a big company which has it all;
from the acquiring of resources from mother earth, manufacturing, processing, delivering and
finally the delivery of the final product to the end customer. It may not reside on one big area
but scattered around, but the asset and management of all processes however trivial are the
company’s own responsibility and done by its own staff. A company may choose not to
embark in the management of SC; the reasons may range from inadequacy of assets or
expertise, to the nature of businesses they are in. It may however at that time outsource a
number of the company’s functions, such as those perceived as non-core activities like
cleaning, maintenance of buildings and so forth. These are the cases where outsourcing
function stands individually to the respected companies, though they may be involved in a SC
managed by another organization.

Increasing number of companies however has adopted a strategy which led to the outsourcing
of more activities to suppliers (McIvor, 2003). This strategy has resulted in the company
becoming a ‘systems integrator’, in which it manages and coordinates a network of best
production and service providers. Such strategy is based on the premise that the company
should outsource those activities (both production and service) where it can develop no
strategic advantage, with the supply base comprising a network of specialist focusing on their
distinct area of competence delivering products and services to the systems integrator.
Therefore, it may be seen that the growing practice of outsourcing by a company could in the
end lead to the implementation of SCM. This could be further encouraged by the intensifying
competition among industry players, and the widening trend of supply network competing
against other supply networks rather than single entity or company against others.

Interestingly, a company which has only been practicing SCM could also in the end exercise
both SCM and outsourcing. In a broad sense, SCM may also simply mean to ‘manage a SC’.
Where this is the condition, an SCM itself can be outsourced by a company to another,
whereby the management of all external processes, information and material flows and so
forth to meet the main company’s needs become the SC manager’s responsibility. The main
company shall then focus on its internal core processes while monitoring the performance of
SC manager, by setting a certain standard in which the service provider will have to meet. In
this situation, the SLA will become vital in the relationship.

Outsourcing may also be one of the important tools for a company practicing SCM to reap as
much benefits as possible. Whether outsourcing opens the door to practicing SCM and/or
plays a beneficial role to make SCM more effective and efficient, or; the other way round,
relies entirely on the practice and perception of a company.

Task 1.3: Discuss the key drivers for achieving an integrated supply chain strategy in an
organisation

There are some key drivers which will help the organization to achieve an integrated supply
chain which are following:

Customer service management process: Customer service management process is concern

with the organization and its customers. Because customer service is the main cause of
customer information.
Customer service management provides the customer through real time information on
arrangement and product accessibility during interfaces with the organization’s manufacture
and distribution operations.

Good organization uses the following steps to build customer relations:

 Verify jointly pleasing goals for organization and customers

 Set up and preserve customer relationship
 Produce optimistic feelings in the organization and the customers

Procurement process: Strategic tactics are drawn up with suppliers to maintain the
manufacturing current management procedure and the growth of new products. In
organization where operations expand internationally, source has to manage on a
international basis. The preferred result is a win-win connection where both parties take
benefit from each other, and a decrease in time which is required for the design series and
product.
Task 2: Be able to use information technology to optimise supplier relationships in an
organisation

Task 2.1: Evaluate the effectiveness of strategies used by an organisation to maintain

supplier relationships

Efficient management of suppliers is the important way for manufacturing companies can
advance their performance. There are many significant aspects of supplier management; they
incorporate sourcing strategies, and the way relationships are managed and the information
exchange policies adopted by manufacturers. Characteristically, it has been discussed in the
original script that close relationships with suppliers should be urbanized, in contrast to the
conventional price-driven transactional relationship. The research found that noteworthy
portion of the companies surveyed had experienced an alteration in their relationship with
suppliers for past few years. even though the companies had urbanized partnerships with
some of their supplier the mainstream of firms sustained to favour a multi-sourcing policy.
The research results have implications for manufacturing companies as they point out the
potential for development from side to side the superior acceptance of best practices in the
area of supply chain management.

Steps assessors must take to better evaluate strategic supplier relationships:

1. Segment the entire supplier base into several strata based on enterprise need, size of
spend, criticality of supply, etc.
2. Develop programs that are appropriate to each of those segments.
3. Apply tools which recognize the importance of the top tier representing the most
strategic set of suppliers to the organization. While smaller in number, this segment
comprises the more complex, higher value suppliers where measurement scorecards
must evaluate the performance, value and risk within these relationships.

Task 2.2: Use information technology to create strategies to develop an organisation’s

relationship with its suppliers

As search costs and other coordination costs turn down, theory predicts that firms should
optimally amplify the customers of the business. Because of decrement in the costs due to IT,
there is little proof of an augment in the existing of suppliers used. This elaborate that other
force must be used for in a more complete replica of buyer supplier relationships. So there are
many technologies which are using by the organization to develop relationship with their
suppliers which are following:

 Analyze actual time information about market trends sales and orders.
 Predict and respond rapidly to changes in demand.
 Develop efficiency with concern to precise information on supply.

E-collaboration with the suppliers, like, using email and giving out spreadsheets, can be
simple, but the most profit approach from sharing information in real time. This approach
requires more refined technology, which are following Forecasting systems or inventory
planning, this means use their inventory records to predict the market demand for their
product.

Online analytical processing systems: This system analyzes the history sales performance
and evaluates the forecasts from different suppliers.

Enterprise resource planning systems: ERP system plan and programmed their entire
business. By connecting their order and purchasing system with that of their suppliers, orders
can frequently be placed and tracked and the supplier can issue the invoice.

These technologies are helping the organization to make good relation with their suppliers.

Task 2.3: Develop systems to maintain an organisation’s relationship with its suppliers

Case Study of a maintaining organization’s relationship with suppliers:

The following case study shows how a supplier development tool is being used to evaluate
the performance & value in the relationships of a global company with a key category of
strategic suppliers: In an effort to increase performance and optimize expenditures,
“Enterprise X” (not their real name) decided to focus its attention specifically on improving
the effectiveness of the bottom 20% of its high value, strategic supplier segment.

To accomplish this task, it turned to a supplier development solution to identify and optimize
the relationships with their strategic suppliers that had critical working relationships with
their various business divisions. The enterprise’s mid-level managers collected feedback
using scorecards for each strategic supplier within their assigned sub-category. The
scorecards included information on each supplier’s ability to meet stated business objectives,
as well as performance & value feedback collected from both business and supplier personnel
regarding the status of their working relationships. The supplier development scorecards
combined raw business data (including sales, supplier financials and business objectives)
with performance and value related information such as:

 Rating scores from both internal and supplier employees regarding their perception of
their working relationships.
 Those suppliers that had re-engineered their business systems in the past year to meet
the company’s needs and the results that were achieved.
 The suppliers that had demonstrated the highest and lowest level of performance
relative to their projects.
 Specific contributions made by each supplier in meeting their quality objectives
during the past year.
 Financial stewardship, both in optimizing costs and improving efficiencies.

On request, scorecards from each mid-level manager were aggregated into a single sortable
report that provided the executive team with the ability to rank their suppliers. This allowed
their senior management team to determine those that required review, those that required a
concrete action plan to improve their performance and also the high performers that deserved
recognition. The bottom 20% of suppliers (those having the lowest scores), that are unable to
improve their performance scores and incorporate the recommended improvements were
targeted for non-renewal of their contracts.

Concluding summary: The competitive nature of today’s environment requires procurement

executives to reorient their thinking regarding their strategic supplier relationships. A critical
element of supplier assessments involves measuring the way people work with each other,
including their perceptions of the performance & value within the relationship. Without this
information, enterprises cannot conduct complete and accurate assessments of the value that
their strategic suppliers contribute to the business. Unfortunately, traditional supplier contract
management solutions don’t provide the capabilities needed to focus on performance &
value. Businesses must incorporate these new tools to extend the focus from purely
operational data to performance & value-based information in order to improve their
assessment processes and build greater trust and collaboration between clients and suppliers.
Once the new processes are established, enhanced supplier relationships will have a greater
role in reducing costs, improving performance and meeting strategic business objectives.
Task 3: Understand the role of information technology in supply chain management

Task 3.1: Assess how information technology could assist integration of different parts
of the supply chain of an organisation

Tesco uses this web technology to fully integrate the supply chain.

Internet: A revolutionary force: Internet had become a revolutionary force which changed
all the operations of an organization. Which includes supply chain also, the revolutions which
internet brought are:

 Internet had become an important distribution channel.

 Value chain activities had been made more efficient to perform.
 Strengths of competitive forces are altered.
 It recreated an new industry

Information technology could assist in the integration of the different parts of the supply
chain management in the organization. In dell the IT assist in the integration of the different
parts of the supply chain. There are different integrated strategies are discussed below
regarding the supply chain management in Dell.

Allocation network strategies: The issues like location of warehouse and their capacities etc
are related to the allocation network strategies. The allocation network strategy maintains the
facility that how should the information is being flowed between the management & supply
chain members i.e warehouse & retailer. It helps provide the reduction in the total holding
and logistics costs. The allocation network strategies are specifically related to the reduction
in the logistic & as well as the holding cost of the organization.

Manufacture source strategy: This strategy is the integration of the logistics and production
costs. It also related with the impact of producing in large volumes to reduce the fixed cost
for the production .but the production in heavy volume may increase the transportation cost
and the logistic cost and production in small batches is related to the high fixed but the
balance between them can be maintained by the manufacture source strategy of the
organization.
Record organizes strategy: This strategy connected with the decisions concerning the
inventory control system of the organization. Inventory control strategy includes economic
order quantity to reduce the holding and ordering costs. It also determines the quantity to be
stored. This very strategy can be used for the avoidance of over stocking and under stocking.

Income managing strategy: In the income managing strategy the price flexibility of demand
is fixed according to the market in order to maximize the revenue from sales.

Technology & choice support system: Technology is deals with each and every part of the
organization whether it is related to the inventory, production, revenue etc. so we can say that
the technology is a choice support system of the organization.

Task 3.2: Evaluate how information technology has contributed to the management of
the supply chain of an organisation

The run of foodstuffs and information between supply chain members' of the organizations is
known as Supply chain management. Information Technology helps a lot in availing the
information in organizational premises very easily. In past before 1980 the information flow
between the organizations to the second part is totally based on the paper. The paper based
method of exchanging the information is very slow. But after some time the information
technology had evolved and provides the easy method for exchanging the information
between the organization and the supply chain member. IT includes: computer,
communication technologies, etc and other hardware and services. Information flows theater
a critical role in strategic planning. Because it helps in:

 Rapid procedure to information.

 Good customer service.
 Reduction in paper work.
 Increased productivity.
 Improvement in tracing and expediting
 Cost efficiency.
 Competitive advantage.
 Enhanced/Improved billing.
After the study of these points it can easily understood that the IT plays an essential role in
supply chain management and we can also take the example of the dell (Case study of Dells
Transformation Journey through Supply chain). The above mentioned points are also related
with the dell and its supply chain management. After using IT in its supply chain
management the dell got the maximum benefits from it like:

 Rapid flow of the information

 Great and better customer service
 Paper work reduction
 Proclivity enhancement
 Cost efficiency
 Competitive advantage etc.

Web based technologies has a great contribution in the Enterprise Resource Planning. ERP
includes marketing, HT and financials side of the supply chain business. It helps to keep a
record for distribution activities in plants and warehouse. Besides that web based
technologies also provides aid in event management. Web based logistics planning helps in
selecting routes and schedules according to available transportation on a lane, expenditure
and client’s delivery rota. Web based technologies helps in maintaining effective customer
relationship. It involves systems that bring up to date and track customers’ information.
These systems include order tracking and similar back end arrangement to facilitate the
customers and the services advisers who are to assisting them.

So we can say that information technology has contributed to the management of the supply
chain within your organization.

Task 3.3: Assess the effectiveness of information technology in managing the supply
chain of an organisation

There are some vast impact on the organization because of the information technology here
we took the example of DELL. There are certain effectiveness of IT on the DELL that are as
follows:

 DELL has successfully developed E-business solutions for improving customer

service.
  Enhanced efficiency of DELL allows company personnel's to focus more on the
dangerous business activities.
 E-business solutions of DELL support preparation teamwork & better quickness of
the supply chain management.

The use of E-business solutions improves the information quality of DELL. To gain strategic
benefits, the DELL uses of IT to be coupled with process re-designing. SCM & IT are the
prominent part of the DELL. IT has enabled supply chain to flourish the criteria of the supply
chain management of DELL.
Task 4: Understand the role of logistics and procurement in supply chain management

Task 4.1: Explain the role of logistics in supply chain management in an organisation

Logistics is the function responsible for all aspects of the movement and storage of materials
on their journey from original suppliers through to final customers.

Every organisation has to move materials. Manufacturers have factories that collect raw
materials from suppliers and deliver finished goods to customers; retail shops have deliveries
from wholesalers; a television news service collects reports from around the world and
delivers them to viewers. Most of us live in towns and cities and eat food brought in from the
country. When you order books from a website, a courier delivers them to your door, and
when you buy a mobile phone it has probably travelled around the world to reach you. Every
time you buy, rent, lease, hire or borrow anything at all, someone has to collect it and deliver
it to Logistics your door. Logistics is the function responsible for this movement.

On a national scale, logistics needs a huge amount of effort. China has become ‘the factory of
the world’ and exports US $100 billion of goods a month, while the internal trade of goods
within the European Union (EU) is worth more than US $2 trillion a year – and all of this has
to be moved between strings of suppliers and customers. A rule of thumb says that logistics
accounts for 10–20% of gross domestic product (GDP), so the USA’s GDP of US $13
trillion1 might include US $2 trillion for logistics. The 30 members of the Organisation for
Economic Co-operation and Development (OECD) have a combined GDP of US $40
trillion2 and might spend US $6 trillion on logistics. Despite this effort, we hardly notice
logistics as it goes about its business, but sometimes you might notice the lorries driving
down a motorway, visit a shopping mall, drive through a trading estate, see a container ship
unloading, fly from an airport, or have a parcel delivered by a courier service. These are the
visible signs of a huge industry that employs millions of people and costs billions of dollars a
year. In this book, we describe this complex function, seeing exactly what it involves and
how it can be managed. Logistics manages the flow of inputs from suppliers, the movement
of materials through different operations within the organisation, and the flow of materials
out to customers as shown in Figure 2 below:
 Figure 2: The flow of materials controlled by logistics

Moving materials into the organisation from suppliers is called inbound or inward logistics;
moving materials out to customers is outbound or outward logistics; moving materials within
the organisation (often described as collecting from internal suppliers and delivering to
internal customers) is materials management.

Logistics in practise in TESCO:

Tesco is one of the world’s leading retailers, with more than 4000 stores and sales of £50
billion a year. They have a long-term strategy of continuing growth, based on their aspiration
to: ‘Strive every day to do the best we can for our customers.’ For this they concentrate on
four areas, growth in the core UK business, strong international expansion, to be as strong in
non-foods as in foods, and to follow customers into new retailing services.

To support its operations it has a huge, efficient logistics network that spans the world. This
continually evolves to meet changing customer demands, ‘Following the customer as
customers’ shopping habits change, we change and respond by providing new products and
services.’ You can see this effect in their UK stores. In the 1970s most of Tesco’s sales were
in fairly small supermarkets in town centres. Over the next 20 years they closed many of
these smaller stores to focus on larger, out-of-town developments. More recently, they added
smaller Express and Metro formats, so by 2008 they had 2.5 million square metres of sales
area with four main formats to meet varying needs:
  150 Extras with more than 6000 square metres and selling a complete range of
household products
 450 Superstores with 2000–5000 square metres and focusing on food
 200 Metro stores with 700–1500 square metres selling a smaller range of food and
ready meals
 550 Express stores with up to 300 square metres giving a local service of 7000 lines.

The food range continues to expand, adding own brand, ‘Finest’, ‘organic’, ‘fair trade’,
‘Healthy Living’, ‘Free From’, and so on. Alongside food, the company now sells household
goods and continues its diversification into finance, insurance, telephone and Internet
services, petrol stations, pharmacies, healthcare, and so on. Operations within the stores have
also changed, with the growth of 24-hour opening, self-service checkouts, shelf-ready
packaging, Club card and online shopping. Tesco has moved heavily into e-commerce, which
has transformed many aspects of their logistics, including a web-based home delivery service
with sales of more than a billion pounds a year.

Task 4.2: Evaluate procurement practices in an organisation

Today, purchasing must be the most progressive group in the company. Your systems,
techniques, and operational theories must be flexible and dynamic. The typical philosophy of
“We have done it that way for 20 years, so it must be good” or “We make money in spite of
ourselves” does not apply in modern procurement practices. Worldwide competitive
pressures require greater contribution from the purchasing and supply management functions,
procurement practices and suppliers to improve the organization’s relative position on
quality, price, technology, and responsiveness that doesn’t mean sitting around and waiting
for it to happen.

The procurement policy is based on the Nestle procurement policy: The objective of
NESTLE is to produce and market food products that and that can please customers and
consumer prospect, and to provide enhanced quality food and worth for money.

Milk, coffee& coca are the key raw material of the Nestle in total the raw material turnover of
Nestle is 19.7 bio Swiss Francs. The basic problem is regarding to the procurement of the raw
material so the Nestle opt the two types of strategies that are:
Pre competitive & Competitive

1. Pre-competitive strategy of Nestle: In pre competitive strategies the Nestle wants to

collaborate with the food industry i.e SAI (Sustainable Agriculture. n this strategy the
Nestle provides the support to the agricultural development, trades , preliminary
works regarding the agriculture industry. In this strategy the Nestle try to overcome
the berries of raw material procurement for the Nestle plant.
2. Competitive strategy of Nestle: The competitive strategy deals to encourage the
sustainable agriculture product through the sourcing of its raw materials. This is done
with the help of strategy to the producers and by mounting privileged contractor
contracts. These are the two strategies of procurement of NESTLE by which Nestle
can overcome the hurdle of raw material procurement.

Task 4.3: Discuss the factors that must be considered when improving logistics and
procurement practices in an organisation

Procurement is a key activity in the supply chain. It can significantly influence the overall
success of an emergency response depending on how it is managed. In humanitarian supply
chains, procurement represents a very large proportion of the total spend and should be
managed effectively to achieve optimum value. Procurement works like a pivot in the internal
supply chain process turning around requests into actual products/commodities or services to
fulfil the needs. It serves three levels of users:

1. The internal customer.

2. Programs in response to emergencies and ongoing programs.

3. Prepositioning of stocks, for both internal customers and program needs.

In collaboration with the warehouse function, products/commodities are mobilized and

delivered.
Task 5: Be able to plan a strategy to improve an organisation’s supply chain

There should be the planned strategy for the improvisation of supply chain management of
Dell. The strategy must include certain points that are as follows:

Reduction in cost: The strategy must be planned with the perspectives of cost reduction in
the supply chain process in the organizations.

Time reduction: The strategy should be formulated in such a way s that the time can be
reduced and the process can complete in the proper time span.

Release value: value of the production must be acquired by the planned strategy.

Appropriate quality: The planned strategy of the supply chain management is to provide the
appropriates quality to the consumers.

Reduction in truncations: the strategy should be formulated in terms of reduction of the

transaction cost of the origination.

Task 5.2: Assess how a supply chain improvement strategy will benefit overall business
performance in an organisation

There are certain points which tell us the benefit of supply chain management on overall
performance on the organization that are as follows:

 Reduction on inventories
 Information sharing among the partners
 Preparation being done in discussion rather than in segregation
 The improvements can be reflected in terms of:
 Lower costs
 Satisfy customer service
 proficient manufacturing
 Better trust among the partners

Task 5.3: Explain how barriers will be overcome in an organisation when implementing
a supply chain improvement strategy
Supply chain management helps a lot in reducing the barriers in the organizations Tere are
certain methods by which the barriers will be overcome in the organization when
implementing a supply chain management. Here we are giving the example of DELL that
how supply chain management can overcome the barriers in DELL.

Stronger connection to customers: The DELL’s supply chain is completely focused on the
customer satisfaction. And the basic problem of the organization is to satisfy the customers
and with the help of supply chain the customer can get the maximum satisfaction so that the
DELL could get the positive feedback from the customers.

Complexity reduction: The production operations are very important as well as complex.
but the supply chain made this complexity is an easy going manner. All the process related to
the Production will be in a concise way in the supply chain in the Dell.

Improved internal collaboration: Managing and identify practical interdependencies have

ambitious association with the product design, supply chain management, marketing, sales
and finance. Dell is also beginner's communications by global operations,

Cost reduction: With the help of the supply chain there were the cost reduction of $1.5
billion in DELL. This was the major barrier reduction.

Improved forecast accuracy: The supply chain provides results in three terms that are:
augment in predict correctness at the product, platform and configuration levels.

Conclusion

The supply chain managers have a vital role to play in the management of total cost - they are
able to see and influence the whole cost base across the business. Supply chain management
is responsible for bringing a product to market utilising all the resources, internal and
external, available and aligning this activity directly with the organisation's strategies and
objectives. Supply chain management is spreading within the business world as larger
organisations are demanding this approach in order to remain competitive. The effect of this
is that smaller organisations, further down supply chains, are becoming involved with, or
appreciative of, supply chain management. CIPS encourages all purchasing and supply
management professionals to equip themselves with supply chain management skills not least
'hard ' skills such as process and performance management and to move from traditional
procurement, namely managing upstream supply chains into the organisation-wide
application of supply chain management.
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