Supply Chain Processes (HL IB Business Management)

• Supply chain management (SCM) coordinates and schedules manufacturing to ensure that products are produced efficiently, on time and in the quantities needed
  • It refers to all stages from obtaining materials and components to delivery of the product to the end consumer
    • Stock control: planning, implementing and monitoring the movement of raw materials, components, work-in-progress and finished goods
    • Quality control: ensuring output meets standards so that the end product is safe and meets customer expectations
    • Transport networks: ensuring efficient deliveries of good to customers taking account of speed, reliability and costs
    • Supplier networks: developing strong relationships with suppliers willing to work collaboratively to improve quality
        
• Global supply chains require these activities to be coordinated across international borders
  • Some stages can be completed at lower cost in other countries
    • China has a reputation for producing high quality, low-cost electronics components
    • Labour-intensive processing such as clothes manufacturing is outsourced to countries with low labour costs such as Vietnam
      
  • Scarce raw materials may only be available in certain countries/regions
    • For example, more than half of the world's cobalt - an important raw material required in the manufacture of mobile phones - comes from the Democratic Republic of Congo
      

• Just in Time involves stocks (raw materials and components) being delivered to a business as and when they are needed to be used in the production process
  
  
• Just in Case involves holding spare (buffer) stock to ensure that there is always more than enough stock to meet production requirements
  
  

A Comparison of Just in Time and Just in Case Approaches