Operations Management: An Integrated Approach, 5th Edition

THE SUPPLY CHAIN LINK

In today's competitive environment, companies typically have a very short window of opportunity to enter the market with a new product design. Most companies are aware that they must get to the market early with an innovative product before their competitors. This requires the support of the entire supply chain, where suppliers must be involved in the product design process. We have already learned about the time-saving advantages of concurrent engineering and early supplier involvement. These require a carefully integrated supply chain that allows collaboration and simultaneous product design between suppliers and manufacturers.

Another important supply chain link relates to the technology decisions the firm makes. As companies acquire new technologies, they must consider how these technologies will be aligned with the technologies used by their supply chain partners. When an entire supply chain uses technologies that are compatible, great strides can be made in the efficiency of production and movement of goods. Consider that Wal-Mart has mandated that its top 300 suppliers must put RFID tags on all their shipping crates and pallets. Although RFID tags are expensive, this move has already incurred huge savings by increasing efficiency, better tracking of products, and a reduction in inventory.