Supply Chain

Supply chain is becoming more important in the business world. Thus, to increase the organizational efficiency, the integration of the supply chain activities is necessary. In this article, it has mentioned six main drivers to impact organizational performance, including facilities, inventory, transportation, information, sourcing and pricing. The better the company manages these factors, the better performance the company has.

Firstly - facilities. It is interesting that it mentioned that ‘in facilities management a company proved to be more responsive or more efficient but not at same.' It used an auto company as example; the warehouse is near customer, to provide quick and better access for customers. It showed responsiveness of distributor but the efficiency is low since we need to pay high cost of the warehouse. In any business decision, we always face these kinds of trade off. But this example reminds me the auto industry of Chongqing , most of the manufacture are near the city, so that to provide quick service to customers. At 2011, Chongqing auto output up to about 2.6 million which is near 15% of sales in China. Therefore, location is very important for a manufacture.

Secondly- Inventory. This article spends more time in discussing how to manage the perishable inventory of supply chain. An interesting point is that they use the HR point of view. It suggests that we should hire the experienced staff and give them training; it is because that they play a vital role in efficient personnel.HR decision also important in controlling the quality. The total quality management (TQM) also mentioned the training and development help to improve the quality. The better experience personal we have the better output in relation to inventory management. Of course, there also many points which are important in Inventory, like define target stock level and order patterns ,organize and transparency of inventory and simple inventory procedures.

Thirdly- transportation. Fast transportation service can increase responsiveness but efficiency becomes low because of high cost of fast transportation and more chances of damage. The choice and the planning of transportation play an important role in this part. As this article is focus on manufacture, so the best approach they have suggested is the joint route planning. This can be achieved through horizontal cooperation or outsourcing distribution. I would like to add more point in outsourcing part. It is because that it is an emerged trend in supply