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Supply chain management, by definition, encompasses all activities associated with the flow and transformation of goods and services from the raw materials stage through the end-user (customer), as well as the associated information flows. This is important for any organization that wants to compete in today's business environment (Russell, R. S., & Taylor III, B. W, 2003). A truly effective supply chain is seamless and invisible to the customer; in managing this effectively there are several supply chain factors that must be considered. Factors that affect the supply chain are: complexity, production demands, time, partners, environment, logistics, materials/services and cost of quality (Aquilano, Chase, & Jacobs, 2004, pp. 367-368).
Complexity refers to the daily management of variations in the production process. These include product demands, time frames, logistical changes and unforeseeable changes in the chain. The environment can be seasonal changes, regulations, and market standard alterations. Partners are an intrical part of the process that can impact materials/services and delivery. Alignment between partners in the supply chain must be managed to achieve optimum performance (Russell, R. S., & Taylor III, B. W, 2003).
One program Manager will discuss in the paper is a Harvard study that found an incentive program that helps manage this link in the supply chain (V.G.; Raman, Ananth Narayanan, Nov 2004). The last discussed factor is the cost of quality theory. This is a practice used by management to meet operational objectives using a quasi cost-benefit analysis (Aquilano, N. J., Chase, R. B., & Jacobs, F. R., 2004). This is where executives evaluate the potential los ...