Supply Chain Management
Supply chain management is regarded as an approach that goes in line with managing the supply of primary resources in an organization and also the distribution of final products from the producer to the consumer.
This paper will be able to indicate the results of an interview carried out on Marc Levinson who works with chain link Research Company as an economist who is interested in globalization as his career and Tim Carroll who is the Vice President of Operations and Strategy in the IBM Integrated Supply Chain we find that they claim many organizations are normally pressurized to carry out the reduction of production costs so as to maximize profits.
As human resource managers develop a cost cutting strategy, it is important that there be some reconciliation with the commitment in the organization. This study will also focus on various supply chain management methods such inventory management, transportation; technology and warehousing that are used in implementing cost effectiveness in organizations It will also focus on the desired human resource management consequences of commitment and cost cutting are reconcilable when proper measures are considered when implementing cost cutting within the organization.
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The paper will also indicate that communication is a very important factor that has to be considered when carrying out cost cutting. This paper will also discuss outsourcing and Enterprise Resource planning (ERP) systems as one of the technological method in supply chain management which are now gaining deep roots and are now used by organizations in there management practices. Marc Levinson reveals that inventory management is a cross cultural approach to managing in any organization.
This in line with managing the flow of raw materials into the organization and also the movement of finished products from the company to the final consumer. Inventory managers reveal that many organizations strive to focus on supply chain management competencies and become flexible in order to improve their businesses. Through this the ownership of distribution channels and raw material sources is greatly reduced. He also states that in each and every organization, there is normally the pressure of reducing costs so that profits are maximized.
As human resource managers develop a cost cutting strategy, it is important that there be some reconciliation with the commitment in the organization. Before looking at the extent that consequences of cost effectiveness and commitment reconcile one has to have the broader picture of the effects of reducing costs within an organization. Marc Levinson states that cost cutting can be carried out through various means which are as follows; one of them is through minimizing the number of employees within the organization.
There are some cases where human resource managers are compelled to carry out retrenchment of some employees in order to minimize costs. This means that the few employees that remain in the supply and logistics department have to carry out multitasking. Cost effectiveness in supply department can also be implemented by reducing employee’s bonuses and allowances. This includes scraping off of medical allowances from employees’ salaries. Recent survey indicates that the desired inventory management consequences of commitment and cost cutting are reconcilable.
This is when proper measures are considered when implementing cost cutting within the supply department. Communication is a very important factor that has to be considered when carrying out cost cutting. He says that proper communication has to be carried out to the various stakeholders within the organization like customers, vendors and employees. Change even if it is in line with cost cutting has to be carried out carefully. Inventory and supply chain managers need to know that success in an organization is not just in monetary terms only.
(Assad and Wasil, 1992) 1. 2 Outsourcing From the interview I conducted one Marc Levinson says that they actually carry out Inventory Management with an intention of cutting their operations through; Partial outsourcing which require organizations to source internal audit services from external sources less than hundred percent. Research conducted reveals that most organizations source fifty percent of these services from external auditors.
This is also known in other terms as co-sourcing. This actually means having to balance between full outsourcing and retaining an in house team. This is whereby in most cases the in house team has good control of internal audits. The management decides to make good use of external advisors such that the internal auditors get additional support. In this venture there is integration of a partnership that is formal between the external auditors and the internal audit team.
In this case each party actually contributes experiences, skills and complementary knowledge. He says that this is normally done in many organizations as a means of cost cutting. It also helps many organizations to upgrade their capabilities within the organization. It also plays a big role in increasing responsiveness and efficiency within the organization. This helps many organizations to create operational effectiveness and efficiency especially in the areas that the firm is exposed to great risks (Deavers, 1970).
From the interview I conducted I find that this partial outsourcing is beneficial to organizations as they are helped to comply with approved policies, industry best practices, procedures and regulatory requirements. This involves the use of risk assessment process that is fundamental in internal auditing. This allows organizations to carry out self assessments. Some organizations normally carry out subcontracting and in this case the internal auditing is only carried out for a limited period of time. (Kotz, 2004)