Supply Chain and Operations Management - Essay Example

Few businesses understood the entire chain of activities but where inadequately managed which ultimately delivered products to the final customers. Although the activities were brought to fulfilment, often the supply chains were ineffectively led. Supply chain management can thus be explained as the active management of activities related to supply chain in order maximise the value of the customer, thereby achieving a sustainable competitive advantage. Supply chain activities range from product development, production, sourcing to logistics (Ketchen and Giunpero, 2004).

The organizations that form the supply chain are closely linked together through information flows and physical flows. Physical flow is characterized by the movement, storage and transformation of materials and goods. Information flows allow the various supply chain associates to coordinate their long term plans as well as control their daily flow of materials and goods up and down the supply chain. However, simple as it may seem, supply chain management is associated with a certain degree of complexity and with complexity comes the risk factor (Halley and Beaulieu, 2009).

This topic forms the basis for this research. The following sections will involve a thorough analysis of the main characteristics of material requirements planning (MRP) and Just-in-time (JIT). Advantages and disadvantages of JIT and MRP will be stated and a detailed comparison will be done. Thereafter, the risks associated with the supply chain management will be discussed in details, followed by the ways that can be implemented in order to mitigate such risks. Finally, an overall conclusion will be provided.

Discussion Supply Chain Management in Toyota Supply chain management at Toyota Motor Corporation is a constituent of the company’s operations strategy which is systematically based on the Toyota Production Systems (TPS). The supply chain management framework was developed in the 1940s by Taiichi Ohno and Shigeo Shingo. With the company’s success becoming attaining a worldwide coverage, the Toyota Production System was followed by other companies with keen interest. The principle idea that was followed in the company’s production system is expressed by the term ‘lean manufacturing’.

The components of Toyota’s supplier partnering hierarchy are interlocking structures, mutual understanding and trust, control systems, information sharing, compatible capabilities, kaizen and learning and joint improvement activities. The Toyota production system thoroughly impotents implements the Just in Time Strategy (JIT) which is a system that arranges the resources, information flows and decision rules in such a way that it enables a firm to realise the benefits of implementing such a system.

JIT is a business viewpoint for maintaining a competitive advantage which is based on the idea of incessant development and eradication of waste. This system helps to carry out work through various operations by signals (called Kanban). The components of just in time system are very proactive as far as exposing problems within a company’s supply chain management framework is concerned. The components play a crucial role in reducing the problems thereby formulating an even sound supply chain management strategy.

The components are based on the principles of pull production which based in Kanban, total quality management, reducing inventory by involving the suppliers in the planning process, elimination of waste, continuous