Whether integration efforts should start with suppliers, distribution, or both
DIMCO Company Supply chain management involves the management of material and information from the suppliers to the customer in order to attain customer satisfaction at the lowest possible cost. The company manufactures various types of electronic products, which are distributed in many regions across the globe. It receives raw materials from many suppliers and then it manufactures products which are distributed to regional distribution centers.
Supply chain management requires the partners involved, to integrate their activities such as order taking and order fulfillment in order to create an extended enterprise. It involves the integration of major business processes from obtaining the raw materials to the end user. It also includes the intermediate processes such as transportation and storage to the customer (Reid, 2010). Supply chain process in DIMCO is the primary means of attaining a successful supply chain management system. The integration process should start with the supplier.
This is because the supplier provides the company with the raw materials which is the base of establishing a supply chain management system (Christopher, 2011). DIMCO Company should provide enough lead times to its suppliers in order to establish a close relationship with them. It should also ensure that its employees pay physical visits to the suppliers’ premises. A good supply chain management system involves flow of materials and information from the suppliers to the end customers (Cohen, 2004).
Benefits from leveraging B2B e-Commerce
Business to Business (B2B) e-Commerce involves companies selling to each other businesses. It can be described as the biggest part of e-Commerce.B2B e-Commerce has been automated, and most of the transaction is carried on the Internet this has made the process to save a lot of costs. Through leveraging B2B e-commerce, DIMCO Company will have a lot of benefits. For instance, the company will benefit from reduced procurement and administrative costs. This is because activities will be done on the Internet which is fast and requires less resources hence a reduction in costs. Another benefit is the low cost of accessing international suppliers (Handfield, 2001).
DIMCO Company produces many products, which require raw materials from many suppliers across the globe. Internet based B2B e-Commerce will enable the company to access these suppliers at a low cost. It will also lead to a reduction in inventory investment (Reid, 2010). This is because of price transparency, and low response time, which is associated with B2B e-Commerce. It will enable customers to respond on time as it tries to reach individual customers. DIMCO’s product quality will also improve as it will enable great cooperation between buyers and sellers. The B2B e-Commerce will enable various customers and sellers to work together during the product design and development stage of a product.
Steps to improve its relationship with suppliers
A company’s relationship with suppliers is very important for its survival. DIMCO Company should take various steps to improve its relationship with its suppliers. One of the steps that the company can take is through investing in the suppliers operations in order to strengthen the relationship. The company should also have its managers conducting physical visits to the suppliers’ premises (Christopher, 2011). This will enable such managers to provide advices on improving performance, and this will improve suppliers’ relationship.
The company should also promise the supplier on increased business in the future, and this will work as a performance incentive. DIMCO should also ensure that it provides its suppliers with feedback most frequently so as to improve suppliers’ relationship. It should also help suppliers in implementing their staff development program and also in the establishment of information sharing programme. Another step of improving supplier relationship is through inviting suppliers on the company premises to show them how the final product is used (Hugos, 2011).
The company should also ensure that the supplier support and development program is included in the company’s corporate philosophy. Senior management of DIMCO Company should be committed during the first meetings with suppliers, and should also explain the importance of supplier development program. The company should also provide its suppliers with enough lead times in order to improve its relationship with the suppliers.
The most effective way for DIMCO to eliminate waste in its supply chain
Waste occurs in the company’s supply chain due to inefficient processes, ordering mistakes as well as breakdown in communications. The company should develop a lean supply chain management method in order to reduce these wastes. The most effective method that DIMCO can implement in order to eliminate waste is the just-in-time (JIT) inventory method. This will enable the company to reduce its cost of inventory.Through the use of this technique; the suppliers will only supply materials that are needed hence reducing additional costs of inventory (Hugos, 2011).
This will reduce the physical and obsolescence cost of stocks as well as the overhead expenditures such as rental as well as warehousing costs and insurance costs. The technique will help DIMCO in eliminating the additional cost of inventory and raw materials. This method will enable the company to increase its cost savings. It ensures that the company matches its production with demand. It will also help in eliminating the non-value adding steps in the production process. It leads to service quality through on time delivery of products. The technique also leads to the accuracy in recording inventory and also in record keeping hence saving time (Christopher, 2011).
Christopher, M. (2011). Logistics and supply chain management. Chicago: FT Press.
Cohen, S. (2004). Strategic supply chain management. New Jersey: McGraw-Hill.
Handfield, R. (2001). Introduction to supply chain management. Chicago: Prentice Hall.
Hugos, M. (2011). Essentails of supply chain management. New York: Wiley.
Reid, D. (2010). Operations management. New York: Wiley.