A fast process. The positive impact of the

A supply chain is a link between a business and itssuppliers to produce and distribute a specific product.

  In the supply chain the business tend toreduce cost, this overtakes the business competitors. Also distribute qualityproducts with flexible delivery that suits both business. In the supply chainthere a many stages. The sectors that the supply chain operate in are primary,secondary and tertiary. In the primary sector the production is raw materials.In the secondary sector the production is manufacturing and assembly. In thetertiary sector this is where the distribution takes place.

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There are fivestages within the SCM which will appear in the image below. There are many objectives of supply chain management,one of the objectives of the SCM is to build a strong relationship with alltheir partners. They want to build this relationship by producing products fastand get them to the partner as soon as possible. They must be consistentotherwise their partner will leave as the customer won’t be satisfied. Theyneed to be consistent by selling products faster, so they benefit and theirpartner benefits. For example, selling online.PushThere are two strategies that work within the supplychain, which are pull and push strategies. Under the pull supply chain theprocess is pushed by customer demand.

The push supply chain is driven bylong-term projections of customer demand. These two strategies have positiveand negative. One positive impact of the pull strategy on the SCM isthat there would be less production as the will only make products based ondemand and orders. This would benefit the SCM as they would be saving money.Also if they’re making less products this means they will be able to managetheir stock easily. If this happens the SCM management are reaching theirobjective. A negative would be it takes time to make a product for a specificcustomer, the reason it’s a negative is because pull strategy is supposed to bea fast process. The positive impact of the push strategy on the SCM isthat if the forecasting is accurate they will benefit positively.

They will beable to sell products to customers rapidly, this means they will meet theirgoal and make money. They would also be meeting customer needs. If the forecast prediction is wrong this will have anegative impact on the SCM. This is because they would be making too muchproducts, this leads to less profit. For example if walkers made to much crispand they don’t sell, the potato would become out of date.

This impacts the SCMas they will not be meeting their goals.BottleneckA bottleneck is when there are too muchproducts in a production system that happens when workloads arrive too quicklyfor the production process to handle. Due to this this causes delays and higherproduction costs.

 Bottleneck has asignificant impact on the stream of manufacturing costs, and the bottleneck canheavily increase the time and cost of production. This could impactorganisations as they would have to wait longer than they expected for theirproducts. This will affect the flow of customers, which results in less profit.Bullwhip effectBullwhip effect is where a product gets anunexpected increase in sales and business starts asking their suppliers formore stock so they can meet customer demand. This is where SCM of the productstart to make more products so they can meet the demand for the product. Thereare positives and negatives to the bullwhip effect. An example of a productthat experienced the bullwhip effect is fidget spinners.

When the fidgetspinners first came in there was a sudden trend which increased demanddrastically for this product. This is a positive impact on the SCM as they willbe able to make money easily as the product would sell quickly. However thetrend of fidget spinners only lasted for a couple of weeks, this had a negativeeffect on the SCM as they mad too much of this product and lost out.

If therewas still a trend the product would’ve sold quickly. This is a factor SCM needsto consider. Downstream/ upstream The upstream stage in the supply chain involves searching for andextracting raw materials. The upstream part of the supply chain process doesnot do anything with the material itself, such as processing the material. Thispart of the process simply finds and extracts the raw material. However thedownstream stage in the supply chain consist of processing the material fromthe upstream into a finished product. For example when Apple make the IPhone inChina.

But the product can’t be made without the upstream part in the supplychain as they would need the materials, this is where the downstream comes in. Centralized and decentralized There are twodifferent types of distribution models that are in the supply chain management,which are centralized and decentralized. Centralized distribution is the structureof distributing goods to retail stores in a chain, from a central or localwarehouse, so staying away from direct distribution.

Decentralized distributionis a system that requires multipleparties to make their own independent decisions. There are advantagesfor both models on how they support SCM. The advantages for a centralizeddistribution is that low safety stock levels. This supports the SCM as theywould be saving money as they would be paying less utility bills and makingless rent payments. This means they would reducing costs.

Reducing cost leadsto saving money. This means they’re meeting their objectives. It also supportsSCM as they do not have to spend much on maintain their stock as they have alow amount.

The advantages for a decentralized distribution is that there islow transportation cost and low lead times. This supports the SCM in many ways,one of the ways it supports is by saving them money as they don’t have to spendmuch on transportation, whereas with a centralized distribution you do. Theycan then use the saved money on making thing better.  Downstream/ upstream The upstream stage in the supply chain involves searching for andextracting raw materials.

The upstream part of the supply chain process doesnot do anything with the material itself, such as processing the material. Thispart of the process simply finds and extracts the raw material. However thedownstream stage in the supply chain consist of processing the material fromthe upstream into a finished product. For example when Apple make the IPhone inChina.

But the product can’t be made without the upstream part in the supplychain as they would need the materials, this is where the downstream comes in. 

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