Now we can look at operations as a whole and make big-picture decisions about what should be done going forward. Management is using data to make informed decisions and plan for the future.
Or in the case of Ghostbusters: The Video Game, should we say supernatural?
Check out the demo. Those companies include the providers of the raw materials your firm uses to produce it, the transportation company that physically moves it, and the firm that helped build the Web pages to promote it.
If you hired a company to process copies of the game returned by customers, that company is part of the supply chain as well.
Large organizations with many products can have literally thousands of supply chain partners. Service organizations also need supplies to operate, so they have supply chains, too. As you learned at the end of the last chapter, the process of designing, monitoring, and altering supply chains to make them as efficient as possible is called supply chain management.
Ford owned the foundries that converted raw iron ore to steel for his cars. Bowersox and David J. Today, many companies still take a narrow view of their supply chains; they look at supply chains mainly in terms of the costs they can save.
Cost reduction is definitely an important part of supply chain management. After all, if your competitors can produce their products at a lower cost, they could put you out of business. In other words, these companies also look at the ways their supply chains can create value for customers so as to give their firms a competitive edge.
Today, the term value chain A term that is sometimes used interchangeably with the term supply chain.
The idea behind the value chain is that your supply chain partners should do more for you than perform just basic functions. Out with the old, in with the new—or whatever is selling well. Originally, it took six months for Zara to design a garment and get it delivered to stores.
To get the hottest fashions in the hands of customers as sooner, Zara began working more closely with its supply chain partners and internal design teams. It also automated its inventory systems so it could quickly figure out what was selling and what was not.
Not only that, but the company set a new standard for the clothing industry in the process. Describe the reasons why the use of outsourcing and offshoring has grown. Explain some of the drawbacks companies face when they outsource their activities. Sourcing The process of evaluating and hiring individual businesses to supply goods and services to your organization.
Procurement The process of purchasing goods and services for your organization. Ford Motor Company no longer produces its own tires for its cars. It buys them from tire producers like Michelin and Goodyear.
The diamond company DeBeers owns its own mines, distributorships, and retail diamond stores. Firms look up and down their supply chains and outside them to see which companies can add the most value to their products at the least cost.
If a firm can find a company that can add more value than it can to a function, it will often outsource Hiring an organization to do a task your firm previously performed. After all, why do something yourself if someone else can do it better or more cost effectively?
Rather than their own fleets of trucks, ships, and airplanes, most companies outsource at least some of their transportation tasks to shippers such as Roadway and FedEx.
Other companies hire freight forwarders to help them. You can think of freight forwarders An organization whose duties include consolidating small loads of freight, negotiating rates for their shipment, and booking space for them on transportation vehicles and in warehouses.
Their duties include negotiating rates for shipments and booking space for them on transportation vehicles and in warehouses. A freight forwarder also combines small loads from various shippers into larger loads that can be shipped by more economically.
Other companies go a step further and outsource their entire order processing and shipping departments to third-party logistics 3PLs firms Firms to which other companies outsource their entire order processing and shipping departments. A 3PL is one-stop shipping solution for a company that wants to focus on other aspects of its business.
The Growth of Outsourcing and Offshoring Beginning in the s, companies began to outsource a lot of other activities besides transportation. Their goal was twofold:In fact, in December of , twenty value chain experts from various organizations, including OECD, FAP, ILO, UNIDO, WFP, WTO, ACID/VOCA, and GIZ, gathered for the “Inclusive and Sustainable Value Chain Development” meeting in Vienna, Austria, to discuss .
Inbound Logistics features its annual G75—a carefully curated list of 75 companies that go above and beyond to ensure their global supply chains are sustainable, and their operations are socially and environmentally friendly. Energy Impact Partners (EIP) is a collaborative strategic investment firm that invests in companies optimizing energy consumption and improving sustainable energy generation.
Through close collaboration with its strategic investor base, EIP seeks to bring the best companies, buying power and vision in the industry to bear on the emerging energy landscape. Value Chain Analysis—Executing Business Strategies Firms make profits by taking raw inputs and applying business process to turn them into a product or service that customers find valuable.
A business process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order. P&O Ferrymasters is committed to developing positive and transparent relationships with its customers and specialist partners.
By operational excellence, we mean providing customers with reliable products or services at competitive prices and delivered with minimal difficulty or inconvenience.