Supply chain management is an oversight of processes when moving goods from the stage of customer order to the raw material stage and it includes the supply, production and distribution of products to the customer. Every organization has supply chain of different levels, depending upon their size and type of product they are manufacturing. Their aim is to provide the customer with enough information necessary to give the value that they demand and to gain the information regarding the customer too. The ultimate goal for any supply chain management is to reduce its inventory.
For a successful supply chain, software systems are provided with web interfaces to provide the customer with enough information they demand. Hershey Foods Corporation and NIKE inc. are both very renowned organizations, one known for its food products and the other for athletic footwear, equipment and accessories for sports and fitness activities. Both of these organizations adopted supply chain management systems in order to lower down their inventories and to increase their profit. But both of them failed in achieving their objective which was to reduce the inventories.
The main mistake made by Hershey Food Corporation was, that they hired a supply chain system costing $112 million from SAP AG, Manugistics, and Siebel systems. The supply chain system was supposed to put in data of everything from production to delivery. But getting software from three different providers created unpredicted delays and complex problems in implementation. Also, another mistake made by the organization was that they implemented the whole system at once instead of in stages. So therefore they faced problems in placing the orders and then executing them to warehouse for fulfillment.
The problem faced by NIKE, inc. was a bit more complex, as said by 12 technologies marketing Chief Katrina Roche “NIKE problems were not tied to the software but to the way the software was installed. ” (Sridharan, Caines, & Patterson, 2005) Moreover he says that his company accepts the responsibility for “not being more aggressive in telling them that they needed to follow our implementation methodology. ” (Sridharan, Caines, & Patterson, 2005) 12 technologies wanted to track each and every little product of NIKE which made the job more complex and therefore it took their time more than they had expected.
The NIKE people made the same mistake as Hershey foods, that they implemented the system before they were ready to execute it. (Sridharan, Caines, & Patterson, 2005) So overall at initial stage supply chain systems were a bad experience for Hershey Foods and NIKE, Inc. There are certain things which if the company would have followed then hopefully the things must have been the other way round. First of all only one supply chain system provider must be hired for the software, as more than one supply chain systems for same job results in failure.
Then provider’s implementation methodology is very important for client to follow in supply chain systems especially when they are modified to suit client’s requirement. More over supply chain systems are very complex as they have to track over numbers of product varieties so therefore it must be implemented in stages rather than executing it at once. And if the company is switching from one system to another then first the system should be tested in order to check whether it is fulfilling the company’s requirements or not. ?