Effective Management by utilising Supply Chain Management

The peak era of mass manufacturing where all the managing aspect in delivering a product being done in one roof is no longer a trend. Companies who tend to manage internal process only and squeeze the suppliers for cost reduction will lose their competitive edge. As customers demands rapidly change and products life cycle are shortening, companies now not only need to manage their internal process effectively, they now must also manage their external suppliers more effectively. Managing the supply chain as a whole will create the ability of the company to identify weaknesses and strength in the entire supply chain. To compete, it is not enough by just identifying the company’s strength but also identifying what is your supply chain partner’s strength as well. By managing the supply chain and eliminating waste processes, the cost reduction will be significant and at the same time value addition to the product.

Dell for example, has use its supply chain management as a unique advantage over already established PC makers by eliminating process waste in their overall supply chain of producing Personal Computers. Dell identified that by eliminating retailers from their supply chain, the company can response much faster to customer’s demand compared to having a retailer to market their PC. Dell has able to reduce waste by identifying the weaknesses of the entire process and eliminate it as soon as possible.