The focus of logistics management is to optimize the system of interactions between each business activity in the flow of materials and supplies needed for production, through distribution and finally to the customer. The goal is to manage and minimize costs. Logistics is grounded on strategic planning concepts and requires the continual use and analysis of information-based activities. Using this strategic process, the demands of the marketplace are translated into production, material and shipping requirements. For the goals of logistics management to be recognized, information sharing must take place between all intermediaries. It is this concept that is known as supply chain management.
Continuous Improvement Through Partnership
Supply chain management cannot exist without trust, cooperation and strong bonds among all channel members. For international supply chains, this requires access to 24 Hour Translation services. By sharing information and cooperating among channel members, revenues can be maximized, inefficiencies eliminated and efficiencies maximized. Under supply chain management, profit is maximized at the marketplace by delivering lower costs by the fastest means possible. In essence, supply chain management seeks to remove bottlenecks and reduce time requirements at each step and eliminate non-conformance to established quality standards.
The Strongest Supply Chain is the Fiercest Competitor
Under the concept of supply chain management all involved entities compete as one driving force against other established supply chains. Therefore, businesses reason that the most effective supply chain will be the strongest competitor.
Under the channel partnership management philosophy, partners continually search for prospects that will remove expense from the supply chain. In more traditional approaches to production, purchasing and distribution new expenses would be pushed up the chain to higher level intermediaries in the form of price increases. A tight integration between intermediaries also emphasizes cooperative problem solving among partners and information sharing to streamline the entire system and maximize quality.
Daimler AG and the Renault-Nissan Alliance
With integrative supply chain management, it is critical that all partners operate in harmony. In essence, the entire channel should view itself as one entity, instead of individually operating companies. Companies such as Daimler AG and the Renault-Nissan Alliance have recently announced a joint effort to build a new manufacturing plant in Mexico. To prepare for the joint effort, they are partnering to build tightly connected information systems, including Electronic Data Interchange (EDI), with all of their suppliers. The new system will provide production scheduling data in addition to real-time production assembly data. Reports will also rely on accurate and timely language translation services. The opportunities of the new system are limitless but will primarily be used for inventory management and to eliminate waste from the supply chain.