Page 325 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT
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Logistics and Supply Chain Management
Notes
Did u know? From systems theory and total quality viewpoints, every purchase operation
is a sale and a part of the value-creation process. Suppliers have the ability to enhance this
value, because they can deliver technology, knowledge, products, or service quality that
will beat competitors.
Operative activities involve management and integration of internal/external and upstream/
downstream supply chain. If the operational function is to contribute effectively to organizational
goals and strategies, its practitioners will have to become fully integrated into the customer –
employer – supplier chain, there are three primary operative dimensions of SCM:
Strategic procurement, i.e. aligning procurement tasks and suppliers’ performance with
the corporate and business strategies of the firm.
Supplier-base management, i.e. managing the structure and culture of supplier relationship
that is denominated in strategic purchasing.
Develop a lean supply organization by energizing organizational teams through flexible
structures and responsive information systems.
Typically organizations operative dimensions include the following activities:
Get the basics right: Getting the basics right reduces the time spent on intervening on an
exception basis in day-to-day activities. It also defuses complaints about efficiency and
responsiveness. If the everyday processes work well, purchasing will have the time to
take a more strategic approach.
Use short-term cross-functional project teams: These short-term initiatives can be effective
in unfreezing existing attitudes about how activity is carried out. A cross-functional
approach encourages thinking about issues further upstream, such as material specification,
strategic make/buy analysis, etc.
Develop the supporting organizational infrastructure: Companies usually focus on five
elements of organizational support for strategic operations: leadership, organizational
structure, people development, performance measurement, and information systems.
Organizational changes typically include the establishment of a corporate-wide
purchasing leadership group. The organizational structure and decision making are usually
modified to permit them to build an effective network. Other changes include the upgrading
of the skills of the organization, the establishment of relevant performance measures, and
the development of a centre-led structure that includes regular cross-functional project
teams.
Self Assessment
State whether the following statements are true or false:
5. Supply chain management views the operative dimensions.
6. The internal exchange relationship between purchasing and supplier organizations is
interactive in nature.
7. Marketing strategies of suppliers shape purchasing strategies of buyers and vice-versa.
8. Getting the basics right increases the time spent on intervening on an exception basis in
day-to-day activities.
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