Operations Management: An Integrated Approach, 5th Edition

THE SUPPLY CHAIN LINK

Today's companies understand that successfully managing their own OM functions is not enough to maintain leadership in a highly competitive marketplace. The reason is that every company is dependent on other members of the supply chain to successfully deliver the right product to the final customer in a timely and cost-effective manner. For example, a company is dependent on its suppliers for the delivery of raw materials and components in time to meet production needs. If these materials are delivered late or are of insufficient quality, production will be delayed. Similarly, a company depends on its distributors and retailers for the delivery of the product to the final customer. If these are not delivered on time, are damaged in the transportation process, or are poorly displayed at the retail location, sales will suffer. Also, if the OM function of other members of the supply chain is not managed properly, excess costs will result, which will be passed down to other members of the supply chain in the form of higher prices. Therefore, each company in the supply chain must successfully manage its OM function. Also, the companies that comprise a supply chain need to coordinate and link their OM functions so that the entire chain is operating in a seamless and efficient manner. Just consider the fact that most of the components Dell uses are warehoused within a 15-minute radius of its assembly plant and Dell is in constant communication with its suppliers. ...