A Competitive Advantage
I. The Strategic Importance of the Supply Chain
Theory of Supply Chain Management
Companies seek to design business models that meet customer needs better than competitors. Success depends on the ability to design, make and deliver innovative, high quality, low cost products and services that customers’ demand1. Supply chain management provides an organization with a sustainable competitive advantage, by allowing companies to focus on their unique skill sets. Supply chain management requires a common understanding of supply chain objectives and the ability of individuals to work together and a willingness to adapt in order to create and deliver the best products and services possible.
A. Competitive Advantage-
Managing inventory in the supply chain is critical to ensure high customer service levels. However, it is also a very costly to maintain. Having the right amount of inventory to meet customer requirements is critical. Since there are few best practices that reduce inventory costs across the supply chain, then if acquired a company will have competitive advantage. Dell Computer Corporation is a good example of a company using its supply chain to achieve competitive advantage. This was accomplished by quick delivery of customized computers at a 15% lower price than the industry standard3. In order for inventory management to decrease Dell eliminated the need for carrying huge amounts of inventory for a long period of time and decreased the time it took to deliver materials through the supply chain.
Dell built a company around a vision whereby manufacturing of an individual item does not begin until it has been ordered by the customer3. Every single Dell product has an end user’s name on it before it leaves the factory. The company never holds more than four hours worth of materials for an individual custom made system. The process of building a customized Dell computer...