Internal supply chains functional

For many companies like Motorola, supply chain improvement must begin inside company walls. This chapter is the first of four that address our second supply chain task, Implementing Collaborative Relationships. The task of building internal collaboration encompasses the roles of players within the organization in improving supply chain functions. A subsequent group of chapters (Chapters 17 through 21) describes... 

Figure 5.1 shows a generalised domestic and international supply chain model with information, material and financial flows. In this figure, each box with a black border represents supply chain members, and the uncertainty reasons (taken from interview data) are represented by the boxes with white borders. There are three types of flows information (line with square dot), material (solid line) and financial (long dash line) in the model. All information flow related uncertainties are represented by time uncertainties. All material flow related uncertainties are represented by quantity uncertainties. The financial flow related uncertainties are considered in the first objective function (cost). The activities in the early description can be categorised and consolidated into four sub-models that are represented in the SC simulation program. 

Hakansson and Snehota (1995) stress that the structure of activities within and between companies is a critical cornerstone of creating unique and superior supply chain performance. Executives in leading companies believe that competitiveness and profitability can increase if internal key activities and business processes are linked and managed across multiple companies. Thus, successful supply chain management requires a change from managing individual functions to integrating activities into key supply chain business processes (Lambert et al. 1997). 

A prerequisite for successful SCM is to coordinate activities within the firm. One way to do this is to identify the key business processes and manage them using cross-functional teams. In some cases the internal business processes have been extended to suppliers and managed to some extent between the two firms involved. This may imply that when a leadership role is taken, a firm s internal business processes can become the supply chain business processes. The obvious advantage when this is possible is that each member of the band is playing the same tune. 

A small manufacturer of a little-known brand may find it difiScult to attract supply chain members for its existing or new product offerings. Such a manufacturer lacks market power when entering supply chain negotiations. Also, since financial resources determine a manufacturer s ability to perform marketing functions internally, small manufacturers usually cannot afford to distribute directly to retailers or geographically dispersed industrial customers and must rely on wholesalers. Furthermore, in some locations acceptable middlemen may not be available in every line of trade. Firms in this situation include some manufacturers of electrical supplies and small hand tools. 

Next, management must analyze supply chain structure to determine whether the corporate strategy has been successfully implemented. Measures of structure efficiency include member turnover, competitive strength, and related issues. When management evaluates supply chain structure, it must compare the firm s ability to perform the functions/activities internally with another member s ability to perform these functions/activities. 

The logistic function runs the supply chain in terms of customer service objectives under the best economic conditions. This is an exercise calling on planning, coordination and management capabilities. It requires also educative and mediation abilities so as to get all internal and external players singing from the same hymn sheet despite conflicts of interest. This approach is global... 

To effectively use assets, supply chain leaders have found that they cannot be insular. They have found that they must tear down the bricks between the silos of their own internal organizations to stretch across networks to build lasting supply chain processes. The walls of these functional silos are difficult to break down, but they must be dislodged to build the end-to-end supply chain. For, it is now not just a company s bricks, but the responsibility for all the assets of the extended network that is paramount. 

A second advantage of integrating the customer into the supply chain is that this integrates the product development function with the other functions in the firm. This integration allows the product development staff to communicate more with the customer both internally and externally to the firm, which decreases the firm s response time to the customer s needs and tends to reduce product development time. 

There is a variety of software packages for each link in the supply chain. As computers and telecommunications equipment become cheaper, there will be even more advanced types of software available. To simplify the presentation of the types and role of the software used, software will be discussed here in 3 major sections. The internal linkages (software integrating our own firm s functions) will be discussed first, because this usually serves as the platform for integrating the firm with other software. Second, software that links our firm to our customers will be examined. Third, software that links our firm to our suppliers will be the final type that is reviewed. 

These downstream features, delivered upstream through the external integration of the service supply chain, combined with the linked internal integration of the operational functional... 

Motivation Ignorance No apparent motivators Project management not considered important Insufficient motivation to take authority away from functional managers Company must undertake major important projects in order to survive Project management efficiency perceived to be closely linked to company success The company strategy heavily depends on projects Examples include new products, internal improvement, major systems, supply chain design, and capital investments ... 

Collaboration CGR Management Consultants defines it as joint planning and execution of supply chain activities. These activities can range from new product development to day-to-day operations. Collaboration includes all aspects of the relationship related to physical movement, information sharing, financial flows, and exchange of intellectual property. Collaboration is also defined as internal between people and functions and external between supply chain companies. The Supply-Chain Council defines collaboration as A relationship built on trust that is benchmarked by the commitment to the team objective and where consensus may not always be achievable but where nothing takes place without the commitment of all involved. ... 

Stakeholders actors, functions, disciplines or roles that are involved in the process(es) composing the CE system. Not only directly involved stakeholders (internal organisation, supply chain partners) may be considered, but also external stakeholders that influence the process but have no direct involvement (e.g., governmental institutions, technology providers). 

---