MGT 3501 Lecture Notes - Lecture 16: Vertical Integration, Lean Manufacturing
Document Summary
The process of optimizing the shipment of goods and services from supplier to customer. The goals of scm are to optimize production, decrease manufacturing time, minimize inventory, streamline order fulfillment and reduce cost. Have to match supply and demand all the time. We can only influence demand so much. In 1927, ford ran a vertically integrated factory where all stages of manufacturing were controlled by ford. During the 1980"s and 1990"s manufacturers realized the disadvantages of vertical integration. A company can not be best in everything. Companies started to focus on their core competencies, buying the parts and services needed from external suppliers. This shift has led to what we call supply chain management today. If a company tried to focus on everything, it"s difficult to do well in all. Prior to the 1990"s, supply chains were mostly localized. Most suppliers were local to the city or region. Brought the shipping across the globe very low.
