A Successful Supply Chain Management - 1626 Words

1 INTRODUCTION There are incredible challenges that the auto industry in USA has to overcome in order to survive the global economic downturn. The government has already bailed out the major companies, after the 2007-08 financial crisis, that define this industry in US like General Motors and Ford. Moreover, poor trends in technology development and immense global competition add to the plunge in demand. Supply chain management has a major impact on operational efficiency, due to this it is considered as one of the core elements responsible for the survival or success of this industry (Webster, 2006). The industry has to acknowledge the market demand trend for greater fuel efficiency and also renewable energy by adopting corporate social†¦show more content†¦Ã¢â‚¬ ¢ A geographically diverse supply chain poses its own set of governmental, natural, etc. risks and uncertainties. †¢ As the world gets more environmental centric, the change in regulations requires companies to measure their carbon footprint and reduce it by pursuing green supply chain and focusing on sustainability and corporate social responsibility. †¢ There is now a significant increase in labor cost in developing countries compared to developed countries, thereby mitigating the cost saving brought about by outsourcing. †¢ Commodities like oil, gas, etc. have volatile prices thus making procurement in the market difficult. When we relate these challenges in modern supply chain management to specifically the North American Auto Industry we observe that the major issues faced by this industry are from four perspectives. †¢ Volatile economy †¢ Price uncertainly for fossil fuels †¢ Green energy †¢ Corporate social responsibility 2.2 Existing strategy and problems The standard strategy employed by automakers to deal with the market is to minimize the purchasing cost and also outsourcing to nations with low labor cost so that some of the losses are mitigated. Chrysler itself wants to reduce cost by 25% from the supplier while Honda anticipates reducing 5% purchasing costs annually since the 2008 crisis. Thus leaving no choice for automakers but to outsource (Halliday, 2008), but this is definitely not a solution for this industry since these create theirShow MoreRelatedHow Supply Chain Management Is Essential For Successful Movement Of Goods Through A Supply Network811 Words   |  4 PagesReal World Process Interview Supply Chain Management is essential to successful movement of goods through a supply network. Many supply chains involves multiple processes and service providers. Most businesses operate in a just-in-time environment, managers must develop efficient, and cost effective ways of moving goods through the process to prevent loss revenue. Maria Hannah, Owner of The Clean Dog Pet Grooming Company provides pet grooming servicing and manufacturing of pet garments. 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