Ultimate supply chain

Here we have a vision of the ultimate supply chain management. Customers have exactly what they want. A long-term relationship is estabUshed so that the customer has no reason to desert to a competitor. Because a customer is getting a unique product made just for him or her, a competitor cannot steal that customer simply by offering price inducement. The jeans are not manufactured until they are needed, and a third party delivers the product. The very issues that supply cheiin management has been concerned with are reduced and eliminated by one to one marketing. 

Since 1994, the automotive industry in the USA and Europe has been operating quality system certification schemes that extended the requirements of ISO 9001, ISO 10011, and EN 45012. One of these schemes was addressed by my QS-9000 Quality S /stems Handbook, published in 1996. In the same year the automakers of the USA and Europe formed the International Automotive Task Force (lATF) which, in cooperation with the technical committee of the International Organization of Standardization (TO 176), produced ISO/TS 16949. Use of and registration to this new standard is currently voluntary. It is intended that following the first revision to incorporate ISO 9000 2000, the ISO/TS 16949 certification scheme will be mandated by all major vehicle manufacturers on their Tier 1 suppliers. As a result, the standard will be cascaded along the supply chain, ultimately reaching all suppliers to the global automotive industry. 

Therefore, combinations of methods will be needed that, over time, will bring about the desired change. These may include the early substitution of one fossil-derived product or one intermediate by one that is renewable-derived. Ultimately, over time, whole new supply chains using only renewable feedstocks will arise. 

Porter s value chain is one basis for the development of the supply chain. The term supply chain was created by consultant Keith Oliver in 1982 according to Heckmann et al. (2003). Compared to the company-internal focus of Porter s value chain, the supply chain extends the scope towards intra-company material and information flows from raw materials to the end-consumer reflected in the definition of Christopher (1992) a supply chain is a network of organizations that are involved through upstream and downstream linkages in different processes and activities that product value in the form of products and services in the hand of the ultimate consumer . Core ideas of the supply chain concept are ... 

As described in Section 1.1, the goal of the simulation study is to quantify the relationships between the simulation outputs and the inputs or factors. For this case study, the outputs are the steady-state mean costs of the whole supply chain (discussed in Section 3.2) and the inputs are factors such as lead-time, quality, operation time of an individual process, and number of resources. Our ultimate goal (as reported by Kleijnen et al., 2003) is to find robust solutions for the supply chain problem. Thus we distinguish between two types of factors ... 

Energy is not used up, but is transformed into kinetic energy and thermal energy, and ultimately to thermal energy released into the environment. However, energy is used in the present context to mean the amount of useful energy in the supply chain that is so transformed. 

There is then the challenging issue of how much of these costs can be passed on as a price rise in the supply chain, ultimately to the domestic consumer. The domestic consumer may not appreciate the environmental implications or accept the price rise as their contribution in overall responsibility for improving the environment. The implications here are for education throughout the supply chain. 

Total integration An ultimate customer focus where material and information flow will be designed into the system and the supply chain will be fully optimized. 

Thousands of activities arc performed and coordinated within a company, and every company is by nature in some way involved in supply chain relationships with other companies (Bowersox 1997b Stigler 1951 Coase 1937). When two companies build a relationship, certain of their intemtil activities will be linked and managed between the two companies (Hakansson and Snehota 1995). Since both companies have linked some internal activities with other members of their supply cheiin, a link between two companies is thus a link in what might be conceived as a supply cheiin network. For example, the internal activities of a manufacturer are linked with and can affect the interned activities of a distributor, which in turn are linked with and can have an effect on the interned activities of a retailer. Ultimately, the internal activities of the retailer are linked with and can affect the activities of the end customer. 

The ultimate driver in supply chain management is the consumer. This is the person who sees enough value in the product to be willing to spend... 

As these collaborations evolve and attempt to overcome the issues associated with their particular aspect of the industry, the combined efforts are slowly but surely changing the industry, improving the visibility, and understanding of many of the sustainability issues faced by the industry, improving transparency across the supply chain, and ultimately leading to solutions that in time can improve the sustainability of the industry. 

Verdouw et al. (2010) analyzed the European fruit market and identified that fruit supply does not sufficiently meet demand requirements. They proposed that the fruit supply chains needed to become demand driven, that is, being able to continuously match supply capabilities to changing demand requirements. In a demand driven supply chain, all actors involved are sensitive and responsive to demand information of the ultimate consumer and meet those varied and variable demands in a timely and cost-effective manner. As a consequence, information must be shared timely throughout the supply chain and the early alerted firms have to respond quickly to changes in demand or supply, which imposes stringent demands on the interoperability and flexibility of the enabling information systems. 

The APICS dictionary defines the term supply chain as either the processes from the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies, or as the functions within and outside a company that enable the value chain to make products and provide services to the customer. The APICS dictionary defines value chain as those functions within a company that add value to the products or services that the organization sells to customers and for which it receives payment. ... 

The ideal performance measure pushes every firm in the supply chain and all employees in each firm to direct all of their efforts to increasing the amount of money made by everyone in the supply chain. The ultimate measure for each firm in the supply chain is their return on investment (ROI) or capital productivity. But, over what horizon should this be evaluated For one quarter at a time or over a decade The problem is that there is no perfect performance measure which will always push firms and their employees in both the short and long term to make the best decision for the long-term benefit of the supply chain. The choice of performance measures in both the firm and the supply chain must be monitored. 

Every firm belongs to at least one supply chain. Most firms belong to several supply chains. The question for each firm is how to design and manage the portions of the transformation processes that are its responsibility. For the supply chain to successfully meet the needs of the ultimate customer, the individual firms must design and manage their processes so that they add value to the ultimate customer. As shown in Figure 9.1 this could be difficult, because the firm may be a member of a supply chain that serves different sets of ultimate customers. 

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