Supply chain
[9] As part of their efforts to demonstrate ethical practices, many large companies and global brands are integrating codes of conduct and guidelines into their corporate cultures and management systems.
A lack of transparency in the supply chain can bar consumers from knowledge of where their purchases originated and facilitate socially irresponsible practices.
[10] Fazel Zarandi et al. add "buyer-seller relations" (at each stage), in addition to the flow of information, as the third main component of a supply chain.
[20] The Chartered Institute of Procurement & Supply's professional guidance suggests that the aim of a tightly coupled relationship is to reduce inventory and avoid stock-outs.
The later stages of a supply chain, such as wholesale and retail determine their break-even point by considering transaction costs, relative to market price.
Each process is managed by a cross-functional team including representatives from logistics, production, purchasing, finance, marketing, and research and development.
The PCF was developed by APQC and its member organizations as an open standard to facilitate improvement through process management and benchmarking, regardless of industry, size, or geography.
[26] In the 1980s, the term supply-chain management (SCM) was developed to express the need to integrate the key business processes, from end user through original suppliers.
The basic idea behind SCM is that companies and corporations involve themselves in a supply chain by exchanging information about market demand, distribution capacity and production capabilities.
Keith Oliver, a consultant at Booz Allen Hamilton, is credited with the term's invention after using it in an interview for the Financial Times in 1982.
[citation needed] The primary objective of SCM is to fulfill customer demands through the most efficient use of resources, including distribution capacity, inventory, and labor.
Various aspects of optimizing the supply chain include liaising with suppliers to eliminate bottlenecks; sourcing strategically to strike a balance between lowest material cost and transportation, implementing just-in-time techniques to optimize manufacturing flow; maintaining the right mix and location of factories and warehouses to serve customer markets; and using location allocation, vehicle routing analysis, dynamic programming, and traditional logistics optimization to maximize the efficiency of distribution.
The term "logistics" applies to activities within one company or organization involving product distribution, whereas "supply chain" additionally encompasses manufacturing and procurement, and therefore has a much broader focus as it involves multiple enterprises (including suppliers, manufacturers, and retailers) working together to meet a customer need for a product or service.
Cloud-based SCM technologies are at the forefront of next-generation supply chains due to their impact on optimization of time, resources, and inventory visibility.
[36] Cloud technologies facilitate work being processed offline from a mobile app which solves the common issue of inventory residing in areas with no online coverage or connectivity.
Supply chain managers are under constant scrutiny to secure the best pricing for their resources, which becomes a difficult task when faced with the inherent lack of transparency.
Hofman suggests that the three key indicators of a well-functioning supply chain are: A Cranfield University boardroom survey in 2010 found evidence that many organizations recognized the importance of the supply chain contribution to their business success, with a focus on cost, customer lead-time and customer quality being the primary performance indicators.
[42] A popular implementation of this idea is given by measuring the time-to-survive and the time-to-recover of the supply chain, allowing identification of weak points in the system.
Adaptation means to accept that the system has reached a "new normal" state and to act accordingly; here, this can be implemented by redirecting ships around the African cape or use alternative modes of transport.
[47] Incidents like the 2013 Savar building collapse with more than 1,100 victims have led to widespread discussions about corporate social responsibility across global supply chains.
Finally, they highlight that collaboration with local partners, across the industry and with universities is crucial to successfully manage social responsibility in supply chains.
Hoi and Lin (2012) note that corporate social responsibility can influence the enacting of policies that can improve occupational safety and health management in organizations.
The drivers for this change include concerns about food safety, child labor and environmental sustainability as well as a desire to increase productivity and improve crop quality.
The supply chain for clothing often requires constant analysis of new fashion trends to manage the quantity needed for various markets.
These new regulations include the Importer Security Filing (ISF)[55] and additional provisions of the Certified Cargo Screening Program.
[60] Moore et al. note a trend towards strategic supply-base reduction as a mechanism for leading businesses to reduce costs and improve supplier-related performance,[61] and similarly Ogden identifies a company's decision-making on the number of suppliers it will engage with for each product or service as an important aspect of the design of a supply chain.
