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The first step is for supply chain executives to clearly understand how the enterprise chooses to compete. This is important not only for the obvious reason of working off the "same play book," but also for the reason that it forces the supply chain operation to see itself as a customer facing entity serving the competitive goals of the enterprise not merely an operational department (www.ups-scs.com).
Supply chain strategy is not simply a linear derivative of the business strategy. At best, supply chain strategy can be the enabler of the business strategy. If the business strategy is to be the low cost provider, the supply chain strategy should support this. And just like when developing a business strategy, look to Toyota core competencies, focus, and means of differentiation when developing a supply chain strategy. Being able to strategically source parts at an attractive price may support both their supply chain strategy and business strategy, but only if they have the capabilities to do so effectively. Look to Toyota supply chain competencies and leverage what they do well. Toyota may want to focus on a particular market or segment in which to gain supply chain efficiencies. Or they may want to differentiate their organization operationally by providing lower costs to customers or providing services that other industry players are unable to do (www.ups-scs.com).
Assess the Extended Supply Chain
The next step is to conduct a detailed, realistic assessment of the capabilities that exist within the organization and even the extended supply chain. Begin by closely scrutinizing Toyota's assets and evaluate how well they support the strategy. Old machinery and disparate systems may mean high operational overhead and costly process inefficiencies and redundancies clearly not supportive of a low cost provider strategy. A formal supply chain assessment by a non-biased outside party may assist they in better understanding Toyota operational strengths and opportunities for improvement. Look for a firm that can provide them with operational benchmarks both inside and outside of their industry in order to gauge core competencies. Once the assessment is complete, assemble a team to review and prioritize recommendations, validate the opportunities, define the risks, and the requirements for implementation. Ultimately, if there is a disparity between the supply chain strategy and the operational assets, they may have to make capital investments (www.ups-scs.com). Of course, the other alternative is to change their assumptions and alter Toyota strategy all together!
Develop an Implementation Plan
From this critical work emerges the "go forward" supply chain strategy - directly tied to the business strategy, highly specific as to enablers and metrics, and with a defined set of implementation requirements and contingencies. The development of an implementation plan should include activities and tasks, roles, responsibilities, a corresponding timeline, and performance metrics. Establish a sub-team to shepherd the execution and provide project management responsibility to resolve issues and track status (www.ups-scs.com).
Cooperate and Collaborate with Toyota Partners - Throughout the development process remember to include their supply chain partners. While they don't necessary need to divulge the full details of their strategy, they can certainly communicate how they would like to do business. Ideally, seek out mutual goals that both organizations can execute on. Not only will they be one step closer to realizing their supply chain strategy, they will learn more about the companies that they do business with. For example, collaboration in product design may meet their need to stem R&D costs and also alert them to new product concepts that they wouldn't discover without working with their customer (Deo, Harjit, 2005).
2dii) Assess how a supply chain improvement strategy will benefit overall business performance in the organization
Supply chain improvement strategy will following benefit overall business performance in Toyota
Value chain strategy helps to streamline the supply chain process, giving balance to it and professionally deliver the products end to end from manufacturing to the end level of distribution (http://about.infocrystals.com).
Value chain strategy definitely increase efficiency of the organization by streamlining the process and it helps organization to save lot of resources which results in eliminating wastage's and save money and which will help organization to provide competitive products to the end consumers.
Business performance will be improved on all the major departments such as production, sales and transportation. On each department Toyota can monitor what is happening and easily make decisions to improve it.
Bridges the gaps between each process in the chain, finding out the gaps will be very easier and organization can concentrate on a particular process which is very weak and strengthen and make it a fail safe solution (http://about.infocrystals.com).
Helps to plan about the supply according to the demand and determine the distribution strategy and make adequate changes to it.
As supply chains have moved from a cost focus to a customer focus and now currently to a strategic focus, the need to think strategically about the supply chain has never been more important. The success of a strategy is only as good as the company's ability to fully and properly execute it. A great supply chain strategy, linked with operational excellence, can provide success for not only the company in question but also its partners and customers.
2diii) Explain how barriers to change will be overcome in the organization when implementing a supply chain improvement strategy
The use of IT is considered a prerequisite for effective control of today's complex supply chains. However, IT implementation cannot simply be delegated away as technology infuses into every point of the value chain. Many IT projects have failed to be implemented because the business and IT strategies were not aligned. The alignment of business and IT strategies has been utilized by organizations to create and improve efficiencies, reduce costs, create barriers to entry, improve customer and buyer/supplier relationships, and create new products and business solutions (Weiss, Joseph and Anderson, Don, 2004).
IT projects to identify the business value of the investment to improve supply chains. At the same time, this business value has been mistaken. They do not get to define the value potentially brought by a solution. In order to get this value, stakeholders must be brought together in a joint process to define potential solutions when seeking higher level of performance.
Why a New Framework
Changes may take place in order to improve supply chains. These changes usually require the implementation of an IT solution. Therefore, the successful design, execution, and completion of these IT projects are important for the supply chain. SCM is now a strategic function addressed at the highest levels of the organization in concert with multiple stakeholders on both the supplier and customer side of the table.
Organizations should deal with three factors when managing IT projects to improve supply chains: the strategic factor, the engineering economics factor, and the effective involvement of stakeholders. The strategic factor is focused on using IT technology to maintain a competitive advantage or just to guarantee the survival of the firm. The engineering economics factor of an IT project is driven for the need to increase profitability and productivity (Mostashari, Ali, 2005).
This assignment proposes a framework that will enable organizations to manage change in supply chains when implementing IT solutions with the involvement of stakeholders. This approach will re-engineer and improve supply chains. In addition, the framework identifies the value creation of the "To be" system as seen by the stakeholders (Auramo, J., Kauremaa, J. and Tanskanen, K., 2005).