Supply-Chain Management
“SUPPLY-CHAIN MANAGEMENT” 1. GLOBAL COMPANY PROFILE:
VOLKSWAGEN 'S RADICAL EXPERIMENT IN SUPPLY-CHAIN MANAGEMENT
Volkswagen 's major suppliers are assigned space in the VW plant, but supply their own components, supplies, and workers. Workers from various suppliers build the truck as it moves down the assembly line. Volkswagen personnel inspect.
Volkswagen plant, however, VW is buying not only the materials but also labor and the related services. Suppliers are integrated tightly into VW 's own network, right down to the assembly work in the plant.
Because purchase costs in the auto industry exceed to 60% of the sales dollar, even modest reductions in these costs could make Volkswagen’s payoff substantial. The results are not in yet, but VW is already trying a similar approach in plants in Buenos Aires, Argentina, and with Skoda, in the Czech Republic. Volkswagen’s new level of integration in supply-chain management may be the wave of the future.
2. THE STRATEGIC IMPORTANCE OF SUPPLY-CHAIN MANAGEMENT
Supply-chain management is the integration of the activities that procure materials and services transform them into intermediate goods and final products, and deliver them to customers. These activities include purchasing and outsourcing activities, plus many other functions that are important to relationship with suppliers and distributors. Supply-chain management is the management of activities that procure materials and services, transforming them into intermediate goods and final products, and delivering the products through the distribution system. It includes determining (1) transportation vendors, (2) credit and cash transfers, (3) suppliers, (4) distributors and banks, (5) accounts payable and receivable, (6) warehousing and inventory levels, (7) order fulfillment, and (8) sharing customer, forecasting, and production information. The objective of global supply-chain management is to build a chain of suppliers that focus on maximizing
VOLKSWAGEN 'S RADICAL EXPERIMENT IN SUPPLY-CHAIN MANAGEMENT
Volkswagen 's major suppliers are assigned space in the VW plant, but supply their own components, supplies, and workers. Workers from various suppliers build the truck as it moves down the assembly line. Volkswagen personnel inspect.
Volkswagen plant, however, VW is buying not only the materials but also labor and the related services. Suppliers are integrated tightly into VW 's own network, right down to the assembly work in the plant.
Because purchase costs in the auto industry exceed to 60% of the sales dollar, even modest reductions in these costs could make Volkswagen’s payoff substantial. The results are not in yet, but VW is already trying a similar approach in plants in Buenos Aires, Argentina, and with Skoda, in the Czech Republic. Volkswagen’s new level of integration in supply-chain management may be the wave of the future.
2. THE STRATEGIC IMPORTANCE OF SUPPLY-CHAIN MANAGEMENT
Supply-chain management is the integration of the activities that procure materials and services transform them into intermediate goods and final products, and deliver them to customers. These activities include purchasing and outsourcing activities, plus many other functions that are important to relationship with suppliers and distributors. Supply-chain management is the management of activities that procure materials and services, transforming them into intermediate goods and final products, and delivering the products through the distribution system. It includes determining (1) transportation vendors, (2) credit and cash transfers, (3) suppliers, (4) distributors and banks, (5) accounts payable and receivable, (6) warehousing and inventory levels, (7) order fulfillment, and (8) sharing customer, forecasting, and production information. The objective of global supply-chain management is to build a chain of suppliers that focus on maximizing