Business Requirement and Guiding Philosophies

1.6 Essay Question

Exhibit 6 displays four enablers serves as a support for many firms to development of progressive strategies and approaches. It also serves as a support to attain supply chain, purchasing, and organizational objectives. These four pillars also connects with the organization’s requirements and philosophy. Exhibit 1.6 contains 3 sections;

        Part 1. Business Requirements and Guiding Philosophies

        Part 2. Four Pillars

        Part 3 Proative Purchasing and Supply Chain Management Strategies

Business Requirement and Guiding Philosophies

There are four parts in enables model: Human resource, Organizational Design, Information Technology, and Measurement. However, before start this model, a company has to build its foundation first. Company need to be sure about their business requirements and Guiding Philosophies, like innovative products, Revenue Growth, Customer Service, etc. These requirements and Philosophies can be related to many areas, like supply chain Integration, globalization, customer responsiveness. For example, if a company go globalization, what should they be prepare and what kind of standards or requirements should be fulfill. Once company built its foundation, this foundation can help company be more effective and efficiency in supply chain. However, these four enables models is not only fit for these requirements and philosophies (foundation), it's also can be fit in areas like Purchasing, supply chain, and organizational objective and strategies.

The Four Pillars

1. Human Resource

One key component for company success is its employees. Employees can be seeing as a company’s root, which means employee’s quality, can determine company’s quality in many ways. However, what makes an employee valuable to company? And what kind of employee is company needed? In exhibit 1.6, there are few area should be include for supply chain management. First is the ability to view the supply chain holistically, which means a supply chain management should view the whole supply chain as one part not view it as sum of multiple parts. Only when we view it as a whole part, problems and how it flows can be clearer, and make our supply chain more effective and efficiency. Second ability is to manage critical relationships. When we talk about supply chain relationship, it can be refer to multiple relationships, like relationship with customer, supplier, even internal relationships with other department in company. The reason for this is because problem will always occur no matter how perfect our contract with customer/supplier is, or how perfect our company’s system is. In most of time a good relationship can make those problem easier. Third ability is that analyze competitive market. The philosophy of ‘keep your friend close’, but your enemies closer.  To understand our competitor strategy, can give us a better solution to face the challenge. Fourth ability is the ability to make decision based on the company’s situation, for example, if a company has some technology issue on their system; meantime, they also have trouble on cash flow, it's clearly impossible ask them to change a whole new system.  Fifth ability is advanced cost management, as a supply chain management, In order to help company make profit, we should be sensitive about our budget, and we should be able to forecast what future cost will occur. As now system like SAP, EPR is been used widely in our supply chain; the ability to adapt to those technologies is become necessary for supply chain management. In another word, all your suppliers/ customers use e-business system, why don’t you? Data analyze is also an ability that supply chain management should be familiar with, only when we understand our data, like our demand forecasting, and cost estimate, we can make the decision is best for our company. Last ability is utilize mobile devices, in now days, mobile is became a essential for most of people, unlike years ago, people who is not at same place need to wait days or even years to hear from one another. In now, people talk to each other can be one click on their phone. Therefore how to make value form it is an ability that supply chain management should be understand. Overall, we can see that when company have supply chain employee with those ability or they hire supply chain people with those ability is actually a strategies to bring a company to success.