Supply chain management
A supply chain is a system of providing input resources to any retail outlet. Input factors of production are the resources needed for the production and sale of a company’s outputs. The input factors need to be consistently provided to the purchasing department of any company, so that there are no shortages or deficits experienced at the sales department of the Retail’s outlet. The network of those who provide factor input need to be well managed so that they have a good relationship with the company.
A good relationship with a supplies company boosts the public image for any company. Balabanis, George, Nina 3-9 Why the need for supply chain management in a retail industry. A retail industry purchases and sales products and commodities at favorable prices to those who buy from the company. Suppliers to the company need to be adequate and sufficient given that consumers are regular and need not to be cut short of their demand.
A supply chain that is not well managed may affect the company’s/retail industry’s market value due to the loss of the market leader position. Bielski, Lauren 2-6 Supply should be matched with demand, if the two do not agree, there will be deficits in quantity to be sold and this shifts demand(dd) curve to the right meaning that low quantities will be sold at a high price. Revenue values will be high but quantities sold will be low. A supply chain that is not well managed is ineffective and inefficient.
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The input sourcing personnel need to be well coordinated at all levels and departments. Unmanaged supply chains lead to double purchases, to the disadvantage of a company’s resources because funds will be spend in excess. Unnecessary costs may be incurred by the purchasing department, such costs incurred do not have match able benefits and this is against a retail outlet’s objective of profit maximization. Davis, John 4-11 Introduction of the supply chain management in Wal-Mart.
Supply chain management is a mixture of art, science and facilities that improve a company’s factor sourcing for products and services, presented to the clients/customers. Harris, Lisa, Charles 4-12 Components of a supply chain management: Plan: Supply Chain Management in Wal-Mart need to have strategic plans. Quality input factor in sourcing should be a long term objective for the company. All input resources should be verified for quality and should be of the right quantity. Budget forecasts for a particular financial year are necessary to avoid cases of Deficit or surplus.
The chain of supply should be efficient and at minimum cost. Efraim, Karsh, Martin ,Philip 3-8 Source: Wal-Mart should choose/select the suppliers who present goods or services required for creating quality outputs. Pricing should be agreed on a mutual basis where no party operates at a loss. Delivery should be in time but not on time, to avoid deficits that may cost Wal-Mart losses in revenue. Make: Wal-Mart stores need to determine all activities necessary for manufacturing and delivery of products.
Make considerations for a supply chain management is the most quantity/measurements part. Quality for factor inputs needs to be determined early in advance to match with the quality of factors inputs. Delivery: invoicing and reception of payments, should be well controlled to avoid delayed transportation of goods. Warehouse for factor inputs should be in place and in good condition. Input resources from suppliers should be first checked for quality and quantity before they are stored in warehouse.