Advantages of supply chain management Essay

One is cost advantage. Companies that have implemented supply train management have a 45% supply chain cost advantage over their competitors. 1 Price of raw materials and end product are optimized due to collaboration between two parties. The sharing of vital tuition in the early stage of development, and the effective communication of methods and requirements allows parties within the supply chain to effectively benefit each other in terms of cost. other is faster time to market. Companies met their promised delivery dates 17% faster than their competition. 2 Through early information and forecast, suppliers can also efficiently design their production and implementation mould through collaboration. This allows supplier to reduce the lead time to produce their products within the supply chain.Disadvantages of supply chain management over traditional competitive procurement processes. First is the difficulty of maintaining supply chain relationship. provision chain relationships are probably the most fragile and the most susceptible to breaking down. 3 This is because a sad relationship at any part of the supply chain can cause major problems to the entire supply chain. In todays world(a) market, the customers have the power over the suppliers. Everyone else in the supply chain must quickly satisfy the demands or else face the possibility of loosing them.Another disadvantage is the claim to share vital information for collaboration purposes which leaves a company vulnerable to illegal copying of ideas or methods. Although these can be safeguarded by proper system between parties, but the forces of market competition may compel violations of agreement intentionally or unintentionally.If supply chain management is actually a best way of managing procurement and production, how (if at all) does that modify any of the economic big ideas we examined in Module 1? Supply Chain Management plays a major role in the concept of supply and demand. With parties clo sely related through collaboration, the identification of demand which is needed by the suppliers to support the collaborative company is easy, allowing suppliers to maximize profit given the level of demand. On the side of the collaborative company, the control of supply of raw materials is easy, which again would allow them to optimize profit.ReferencesFerguson, B. (2000). Implementing Supply Chain Management. Retrieved declination 3, 2006 from http//www.apsreview.com/archive/spring2004/images/APICS.pdf1 See Implementing Supply Chain Management at http//www.apsreview.com/archive/spring2004/images/APICS.pdf2 See Implementing Supply Chain Management at http//www.apsreview.com/archive/spring2004/images/APICS.pdf3 See Implementing Supply Chain Management at http//www.apsreview.com/archive/spring2004/images/APICS.pdf