Why total supply chain management

In the UK statistics show that 78 per cent of the work force are engaged in service industries (www.statistics.gov.uk), and in the US A 80 per cent are employed in service industries (www.census/gov/). Although a shift back to manufacturing has been identified (Basu and Wright, 1997), it is obvious that the greater percentage of the work force of developed nations will continue to be anployed in service activities. There are two reasons for this  

Continual advances in technology mean that manufacturing is considerably less labour intensive than previously. Automation, robotics, advanced information technology (IT), new materials and improved work methods all have led to the reduction of manual labour. 

Additionally, organizations can no longer regard themselves as being purely in manufacturing and hope to survive. The market first and foremost now takes for granted reliability of product and expects good service. 

And McDonald s for over 30 years have competed, and indeed set the benchmark, for fast food providers all around the world. 

Never before has the customer been better travelled, more informed and had higher expectations. Many of these expectations began with the quality movement of the 1980s where it was trumpeted that the customer was king, and these expectations have been kept alive by continuously improved products and services, global advertising and for the last decade the World Wide Web. 

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What are new challenges and opportunities in supply chain management Explain why it is necessary to consider the management of the total supply chain. 

A driver was total cost management. In 2005, fewer than 5 percent of companies surveyed knew their total costs. Today, it is 24 percent. This is a small improvement as well as a major problem. Why Historically, the supply chain has been the de facto bank. When companies want money, they turn to the supply chain but the lack of understanding of total costs leads to bad decision making. 

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