Supply Chain Management and Marketing Strategy - Coursework Example

1 Introduction Multinational Companies have evolved the supply chain system and they prefer to source their requirements form the most suitable area for a particular product manufactured in a specific country. While the preference is to source from the local vendor for price and delivery benefits, there may be occasions where special items may have to be bought from a vendor in another country involving legal and financial concerns. In such cases having multiple purchase options is a possibility; thereby adding to the complexity of the whole transactions.

Use of Supply Chain software is necessary in such cases to keep track of materials 2 Suppliers as Partners Another important feature in Global operations is the emergence of partner programmes where the vendor becomes a part of the supply chain process and has contract to supply materials to several locations. In such cases there is more collaboration than ordering between the purchase department and the vendor and the traditional relationship converts to a partnership. 3 Creation of Orders Under modern SCM the supplier is linked directly sales.

Under this linkage he is aware of the movement of final products from the shelf and replenishment of supplies is triggered after reaching a certain predetermined level. This generates automatic orders on which he commences working without receiving formal orders. This saves time and ensures regular deliveries to production. However this requires careful planning and is applicable to regularly moving common items that do not require changes in form or content. This is applicable in order to make situations where products are rolled off from assembly lines continuously, like Coke.

In cases where production planning is on made to order basis, the supplier is linked to production and their need or inventory level triggers the placement of order for the supplier to act upon. 4 Purchase Procedures When organizations operate worldwide the Purchasing may be done either centrally or powers may be given to regional offices to procure requirements locally. Global purchasing involves understanding of different cultures and financial requirements. There are also different legal and regulatory requirements that are to be met.

The Purchase department has to have a thorough knowledge of these as they will impact the price as well as the delivery times. Since most of these matters are technical in nature, the legal and finance departments are more actively involved in purchase decisions. Agreements have to be vetted by the legal division and all clauses have to be understood in depth. The exchange regulations, customs and duty involvement and other formalities like shipment modes and insurance coverage make the whole process rather complex.

In companies that depend on a Global Supply Chain system an important factor is the Logistic Management. This means movement of goods, whether raw materials or finished goods must be continuously monitored through a tracking system to know exactly where the item is within the supply chain. This helps in controlling and managing roadblocks and assists crisis management. This ability is of paramount importance as it could effect supplied and actually stop production. 5 Logistics Third Party Logistics (3PL) is a combination of services provided by a logistics company to its customer to package and moves its goods from point to point and also warehouse it in between if so required.

Such destinations are often pre-determined and the frequencies worked out to manage a movement within set time frames at agreed costs. Typical services that are outsourced are Inbound or Outbound Freight, Custom & Freight consolidations, Ware Housing, Delivery to customers, Distribution Management and Order Fulfillment. Sometimes value added services offered or demanded like repackaging or return logistic management. 3PL becomes Integrated Logistics when all the above services are offered by a single firm to the company.

This involves a deep understanding and close working between both parties and common understanding of problems and events. Efficient handling a turnaround are the keystones of successes for these operations. Advance planning and close monitoring are needed as well as tracking facilities must be in place to track every single item from its origin to destination. All these form part of Integrated Logistics. These are the ingredients of the modern Supply Chain Management requirements.