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Unit 13: Supply Chain Management and JIT

Notes
Conclusion
According to the 2009 Wal-Mart Sustainability Report, Lee Scott was quoted as saying,
“The facet is sustainability at Wal-Mart isn’t a stand-alone issue that’s separate from or
unrelated to our business. It’s not an abstract or philanthropic program. We don’t even see
it as corporate social responsibility. Sustainability is built into our business. It’s completely
aligned with our model, our mission and our culture.” In this case study we have outlined
the requirements needed to become a sustainable business, the reason why this initiative
is different than others previously attempted by Wal-Mart, goals presented by management,
the new value networks, and risks Wal-Mart needs to address. They have already taken
major steps including a “green” website where they give tips on how customers can go
green and what they can do to reduce their environmental impact. Wal-Mart critics argue
that the steady dose of these initiatives is an effort to deflect attention from its work-place
policies and its financial performance. They need to continue to invest in its environmental
policies as well as address the issues facing their workforce in order to prove these initiatives
are not just a public relations stunt. However, if Wal-Mart proves that it is serious about
reducing environmental impact and devoted to investing in green initiatives, critics will
have to unclench their fists for a round of applause. At least for a moment.

13.8 Performance Optimization

Supply chain performance improves if all stages of the chain take actions that together increase
total supply chain profits. A lack of co-ordination can impact the performance. This occurs either
because different stages of the supply chain have objectives that conflict or because information
moving between stages gets delayed and distorted. Supply chain co-ordination requires each
stage of the supply chain to take into account the impact its actions have on other stages.
Today, supply chains consist of potentially hundreds, or even thousands, of independently
owned enterprises.

Example: Maruti Udyog has thousands of suppliers from MRF to Motorola – and the
number of tiers of the supply chain increases as the chain becomes more complex.
As the complexity of the supply chain increases, very often different stages of a supply chain
may have objectives that conflict if each stage has a different owner. As a result, each stage tries
to maximize its own profits, resulting in actions that often diminish total supply chain profits.

The success of a SCM initiative largely rests on performance. The traditional company boundaries
are changing as companies discover new ways of working together to achieve the ultimate
supply chain goal – the ability to fill customer's orders faster and more efficiently than the
competition. To achieve that goal, organizations need performance measures, or "metrics",
which are formal, well defined processes that can be documented and measured to facilitate
supply chain improvements.
Developing and maintaining a supply chain performance measurement system represents one
of the more significant challenges faced in Supply chains. The supply chain generally consists of
a number of departments each, perhaps reporting to different supervisors. Given the cross-
functional nature of many supply chain improvements, metrics must prevent "organizational
silo" behaviour which can hinder supply chain performance.

Supply Chain Optimization is the application of processes and tools to ensure the optimal
operation of a manufacturing and distribution supply chain. This includes the optimal placement
of inventory within the supply chain, minimizing operating costs (including manufacturing
costs, transportation costs, and distribution costs).

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