Supply chain management pros and cons

Bellevue University's accelerated online Supply Chain, Transportation and Logistics Management degree engages you in processes unique to the interchanging and distribution of goods and services. In response to the growing demand, this cohort degree program prepares professionals capable of executing and managing operations in the logistics of transporting goods in an increasingly global market. Available in-class or online, our accelerated Supply Chain, Transportation, and Logistics degree includes coursework focusing on:

Supply chain management pros and cons

They are customers to their vendors and vendors to their customers. When companies think of consignment inventory, they often view it from these two viewpoints. As a customer, having a vendor willing to provide consignment inventory is an ideal way to reduce inventory costs. As a vendor, providing consignment inventory to customers can often be costly and difficult to manage, but an ideal way to secure long-term business.

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Are you asking your vendors for consignment inventory or are your customers asking you to provide consignment inventory? Have you defined your liabilities?

Supply chain management pros and cons

The inventory remains owned by the vendor up to that point where the customer uses a portion of the inventory. Without the ability to track usage, companies are unable to guarantee their inventory is being invoiced at the right time and in the right quantities.

The customer is only invoiced for those units they use in the month they use it. The table below is an example of how consignment inventory would work.

Explanation of above table: In our above example, the customer is only invoiced for those quantities they use in the month they use them.

This improves their overall inventory cost of ownership by lowering their month to month holding costs. Additional savings include not paying for expedited freight on urgent parts from vendors, and saving a tremendous amount of money on the initial freight costs to get the entire consignment inventory delivered.

A large portion of inventory costs are made up of the freight costs to get parts in and out of warehouses. The customer also likely benefits from a lower average price. In some instances, the customer may be able to secure the higher volume pricing widgets while only using a portion of the inventory widgets each month.

Lower month to month inventory holding costs Lower freight costs per unit Less incidence of urgent freight to get parts from vendors Better volume pricing Customer Cons of Consignment Inventory: While it certainly seems like the perfect situation for the customer, there are some hidden costs to managing consignment inventory.

There is a cost to doing this, as most companies can attest to. Holding this inventory opens the customer up to potential damage to inventory. Will the customer be responsible for the damage or will the vendor?

Who will determine which party caused the damage? What happens if the inventory becomes obsolete and can no longer be used? The above questions imply that the customer must be willing to consider the drawbacks of consignment inventory. So, the costs have merely been transferred from the customer over to the vendor.

There are a couple of inherent benefits to the vendor when they pursue consignment inventory. Vendor Pros of Consignment Inventory:Supply chain management is an elaborate system of collaborative transportation, logistics and distribution.

This process is complex enough on the domestic level. When you add the challenges of global logistics and varying foreign regulations, the risks of a . Georgia Pacific Georgia Pacific makes both types of structural panels including a plywood subfloor that has been treated to enhance moisture resistance.

Supply chain management pros and cons

only search About; Submit; Login or Register. what are the pros and cons of global supply chains as a production 'model'? particularly those at the top of a supply chain.

The Keswick Enterprises Group is a United Kingdom-based group of companies specialising in logistics and supply chain-related services across Europe, the Middle East and beyond. This course provides an examination of supply chain and logistics management concepts from both U.S. and global perspectives.

Key logistics and supply chain activities are explored with an emphasis on the opportunities that can be realized through effective and innovative supply chain and logistics management. Supply Chain Management A presentation by A.V. Vedpuriswar.

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