04/ 07/ 2005
by Charles. R. McConnell
Today the process of getting a product from manufacturer to consumer can require a number of complex interactions among a chain of suppliers. As the global market becomes smaller, companies work with an increasing number of suppliers around the world. These suppliers work together closely and form a chain that requires careful attention and solid management.
When you’re working with several suppliers, it is important to implement a supply chain management system. Knowledge of this emerging management specialty is essential to all businesses that purchase components and services from other firms and to all businesses that supply those components and services.
Much like a real chain, a supply chain is only as strong as its weakest link. The success of supply chain management for any company begins with management commitment from the top down. It is necessary to get people in key positions to look beyond their own organizations and see the broad picture. The complete cooperation of all members of the chain is essential.
One of the main reasons you might become involved in a supply chain is that is more economical to outsource non-core functions. Often overseas suppliers can save you money, but they may cost you time. When working with offshore suppliers you have to deal with longer lead times and greater susceptibility to disruptions. In situations where timing is crucial, good management and cooperation from all involved can make or break the chain.
Also, in this system, the quick, efficient communication of information is essential, so it's important to make sure your technology is up-to-date and compatible with that of the other companies with which you are working. This is so important that some major outsourcers have invested in information technology for their smaller suppliers to achieve compatibility.
Effective supply chain management can forge the chain, join its links together with appropriate information technology and open the door to suppliers who can deliver in terms of cost, quality and reliability. The suppliers who can respond appropriately are the ones who will get the business.
