Supply Chains and Inventory Management Essay - 1155 Words

Supply Chain and Inventory Management December 6, 2008 Supply Chain and Inventory Management With the increased globalization, competition and complexity in global supply chains, more companies have realized that supply chain management is critical to the optimal organizations overall operation. It is no longer just the responsibility of the warehouse manager and logistics director (Pundir, 2008 and Wharton). In the past, many organizations didn’t manage their supply chains they left that up to the suppliers. Usually the supply chain planning, marketing production and inventory management in most organizations operated as separate departments (Stevenson, 2007). Businesses have recognized the strategic importance and the need for†¦show more content†¦For example Nokia’s fast reaction to their manufacturing process, the rapid movement of logistics and the world wide web that links Nokia suppliers, plants and wholesaler, and the management of inventory with the collaboration of planning has contributed to Nokiaâ€⠄¢s profit growth (Robert, Lewinski Wassenhove, 2003). Nokia along with organizations across the globe have realized that alignment between the business strategy and supply chain operations is the power behind the success of the organization. The major benefit of effective supply chain management is profitability. Research has shown that in the year 2000 a supply chain merger in Procter Gamble integrated and simplified the collaborating process along their supply chain. The results of this change cut 10 percent of their inventory, increased their return on equity and net profit increased by 6.4 percent (Qinn, 2000). The executives of today’s complex dynamic world understand the need for collaboration, planning and monitoring of the supply chain and that it requires on going alignment of the entire organizations operations team. The company strategy must also take in to account the importance of the management of the supply chain’s inventory process. Inventory managem ent is an essential part of operations management. 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