Supply Chain Management

Much of the cost of any company comes from the supplies it buys. Finding raw materials or component parts that meet the requirements of the company and arrive in a timely manner is a key factor in any company's success. Supply chain improvement sometimes comes at a cost to the employees involved, but maximizing the profitability of a company is critical to maintaining its stability and ability to pay future wages.

An inefficient supply chain causes increased costs for a company. "The symptoms are excess inventory, excess costs and missed customer deliveries -- all bad -- and all can be avoided (Garwood)". Excess inventory can be identified by physical buildup, inventory obsolescence, and unduly long lead times from suppliers. Excess costs often show up as decreasing profitability with increasing sales or the inability to compete in price wars with competitors. Missed customer deliveries should be reported through the company's information system.

Part of supply-chain improvement is changing the stakeholders of the supply chain. If the company has no internal accountability for good purchasing practices, then the stakeholders are the customers, the shareholders, and upper management who must report to both. Making managers, inventory handlers, and purchasing personnel accountable for the efficiency of their supply decisions is critical to improving the process.

Not surprisingly, once many firms link PSM [purchas

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Approximate Word count = 938
Approximate Pages = 4 (250 words per page)

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