Case Study YJ toy shop has recently started selling its products online. Through the YJ website, customers can surf all products, place orders, make the payment, and receive the bill. Then, YJ packing employees will receive the order automatically. As y business is getting bigger, more employees and suppliers are involved. The owner of YJ has decided to use the latest systems that can help the enlarging business through all departments (i.e. sales, accounting, HR, finance, and customer service). Accordingly, the owner bought and implemented a supply chain management (SCM) system and a customer relationship management (CRM) system. Assessment Questions: 1. Question 1: Explain, briefly, how YJ could benefit from the implemented SCM system. 1. Supply Chain Management (p. 36) What is a Supply Chain? Process by which inventory moves from suppliers, through company, and output as product. What is a Supply Chain Management? Tracking inventory and information through business processes and across companies. What is a Supply Chain Management System? The system that supports SCM activities by automating the tracking of inventory and information across the company. Suppliers Processes Products 1. Supply Chain Management . Companies do not like to hold onto inventory for long, why? Too much money tied up. The demand, best price, and expiry dates run out quickly. Takes space which costs money to storage. Items may become obsolete and companies will end up having to sell them for cheap or pay to dispose of them! 1. Supply Chain Management . Companies do not like to have little inventory, why?* Run out of material to produce. Force shut down. Customers going to another brand or producer. Having a system to make sure this does not happen is where Supply Chain Management System comes in. 1. Supply Chain Management Two models of Supply Chain Management by retailers: Buy-Hold-Sell: Traditional shop way of buying, stocking then selling. . Sell-Source-Ship: More of what online businesses do, they get the order first, source, then ship the order directly to the customer. . Can you see advantages and disadvantages of each?" Holding inventory for a typical computer retailer occurs here Selling for a typical computer retailer occurs here Typical computer retailer and its inventory."Buy. Hold, and Sell INVENTORY Dell and its inventory"Sull, Source and Ship Low TIME Selling and sourcing for Dell occur throughout time, keeping inventory low 1. Supply Chain Management Manufacturing companies want to achieve "Just-in-time' model: . This means to produce and deliver products/service at the exact time the customer wants it. Examples: Amazon publishing model / Apple laptop sale / Dell Computers. . The model aims to almost eliminate inventory storage and keep the latest technology that could be ordered at short notice. To achieve this, companies sometimes use : multiple channels of transport: ships, planes, trucks, or railways...this is called Inter-model transportation. Integrate their IT systems with suppliers/sellers to share information...this is called information partnerships. 1. Supply Chain Management Strategic and Competitive opportunities: Overall Cost Leadership: Passing on the savings of storage to the customer. Running the Organization Increase market share. A well designed Supply Management System helps organizations: Reduce cost and keep prices competitive. Revenues up by not leaving shelves empty. Production lines functioning smoothly. Reliable Transport with cost to the minimum Fulfillment of right quantities in and products out. A thought! . But what happens with products after they are sold? There is something missing in the process below: Suppliers Processes Products Customer Relations