A proper integration of functional and cross functional activities on the basis of product flow is also required to further the supply chain efficiency. The answers to the following questions elaborate on these aspects of supply chain management.
In the present day business environment firms can enhance their competitive strength by efficiently managing their supply chain. The typical supply chain in any manufacturing firm consists of various firms and agencies taking part in the purchasing, production and distribution functions of the firm. The objective of an effective supply chain management is to ensure that the costs involved in procuring the materials and components, cost of carrying the inventory of various materials and the cost of distributing the products to the end customers are reduced to the maximum extent possible so that the profitability of the company can be improved. In the process of improving the efficiency of the production process techniques like 'just-in-time' manufacturing system helps the firms to achieve the objective of cost reduction and minimization of production time. It is also important that there is an effective information flow between various supply chain partners. With the advanced information and communication technology existing today it becomes easier for the firm to communicate with each other efficiently. This paper discusses some of the relevant aspects of an efficient supply chain management.
1. Critical Evaluation of the Contribution of Just-in-time (JIT)
The JIT philosophy advocates the elimination of waste through the process of simplifying the production processes and elimination of piling up of inventories. Also known as 'lean production' JIT is a 'demand-pull' manufacturing system. Under this system each component in a production line is produced immediately as needed by the next step in the production line. In a typical JIT production line manufacturing activity at any particular workstation is prompted by the need for that station's output at the following workstation. In the JIT system demand triggers each step of the production process starting with the customer demand for the finished product at the end of the process and working all the way back to the demand for direct materials at the beginning of the process. In this way the demand pulls an order through the production line. The demand-pull feature of JIT production system achieves close coordination among workstations. The objectives of JIT are to (i) meet customer demand in a timely way, (ii) with high-quality products and (iii) at the lowest possible total cost.