1. The Supply Chain Supply Chain Management
When looking at Supply Chain Management, one must first examine the supply chain and its purpose in any organisation. The supply chain is the flow of specific materials, information, financial support and other services which are involved in the development of a product from raw material suppliers, right through to the end consumer. (Rainer & Cegielski, 2013). The supply chain is an integral part of every organisation as each step is necessary for the production and distribution of a particular product. Communication and collaboration are crucial components in the success of the supply chain, as one step has an influential effect on the next and if either of these aspects are missing, problems will arise. The supply chain is bidirectional as information, products and finances flow in both directions. For example, this is the case when consumers give feedback on a product or service (Rainer & Cegielski 2013).
There are three segments to a supply chain;
Upstream – where the organisation outsources their suppliers, with management controlling pricing, delivery, organising payments and other needs that may arise.
Internal – In laymen's terms, it is where the company complete, test, package and prepare goods for delivery.
SC Managers coordinate all of these activities.
Downstream – This is where the distribution of the finished product takes place i.e. Deliveries (Rainer & Cegielski, 2013).
Irrespective of what supply chain structure you choose, you will more than likely have three flows involved. Materials, information and finance are all aspects which will effect your company upstream, internally and downstream.
The example in which we chose to focus on in order to explain supply chain management is Toyota. Toyota is a member of the auto-motive industry which is a very complex industry as it is made up of a number of different elements which effect their supply chain. At the heart of their supply chain is the OEM (Original Equipment Manufacturers). Following on from this is the first-tier suppliers such as Bosch, Delphi and Continental, who supply systems to the OEM, this leads onto the second – tier, suppliers. They either supply individual parts directly to the OEM or the first-tier. The third-tier suppliers are on the outer-ring of the supply chain, they may only supply small components for the second-tier suppliers.
Toyota’s success is based around the strategic choice of strong suppliers which impact their ability to create the ‘Best Built Car in the World’ (The Economist, 2010).
Toyota has implemented an EDI system into their organisation that helps them communicate more effectively with all members of the supply chain. The benefits of having a EDI reduce costs, more accuracy when it comes to transitions and a more timely transition cycle. (I Connect, 2015).
In 2002, Toyota made the decision of aiming to increase their market share from 11% - 15%. This resulted in them making new links with unfamiliar suppliers, who had little knowledge of what the Toyota culture was like. By 2005, Toyota were experiencing large number of recalls which led to a focus on quality control (The Economist, 2010). This however did not change their objective of overtaking General Motors . In 2008, even when they over-took competitors, there was still a large amount of recalls and inconsistencies in quality. These were not as a result of Toyota factories but of their out-sourced suppliers (The Economist, 2010).
Some of these problems were caused by the lack of restructuring of their EDI system, which led to the lack of communication between Toyota’s needs and what the suppliers were manufacturing (The Economist, 2010).
In order to solve this problem, Toyota should see their suppliers as extensions of their own company. They should give suppliers the necessary time to develop and inform them of the needs and expectations of the Toyota brand (Rainer & Cegielski 2013). They should see this as an opportunity for a partnership not just a once-off dealing in which bonds are made and broken quickly. This does not allow for the necessary time to build a relationship in which both parties are beneficial.
Overall, an organisation without a supply chain management system will not reap the benefits which are; sustaining competitive advantage, achieving higher profits, minimising risks which all in all have an effect on the overall success of an organisation. The impact of effective supply chain management ranges from quick product turn around times to the quality of the products (DeBenedetti 2015). The art of creating and managing a successful supply chain is all about planning and implementing the appropriate procedures so that there is clear communication between all parties involved.

2. Supply Chain Management
The aim of SCM is to minimise costs within the organisation but at the same time keeping a high level of service, customer satisfaction, and quality, while coordinating each of these individual activities.
It is also a type of Interorganisational Information System (IOS)

3. Supply Chain Management Clip

4. Case Study

5. Toyota
Supply Chain

6. Tiers of Suppliers.
1st Tier- integrated components e.g. Dashboards and seats.
2nd Tier- Windshields, Tires, and Plastic Mouldings.
3rd Tier - Basic Products e.g. Glass, Plastic, Rubber

7. ‘Just in Time’ Toyota: They collaborated with long-term suppliers.
Mutual Benefit
Quality of Individual Components
Western Car Makers:
Sourced in-house
Short Contracts with the lowest bid
Lower Quality
No mutual benefits

8. ‘Times have changed’
It is through Toyota’s supply chain model that western car makers have transitioned to their way of thinking.
Good relationships between OEM’s and first-tier suppliers.
Problems are mostly caused by relationships with other suppliers.

9. Problems in Toyota
2002  aimed for market leader & growth  new suppliers
2005  recalls  poor quality  still focused on overtaking General Motors
2008  overtook GM  still recalls  no improvement in quality

10. Information Technology Support for Supply Chain Management

11. Electronic Data Interchange
As a result of Toyota implementing an EDI system they have experienced a number of benefits:
Reduced costs
Increased transaction accuracy
Reduced transaction timing cycle

12. Without EDI

13. With EDI

15. Bibliography
Rainer, K. R. & Cegielski, G. C (2013) Introduction to Information Systems, 4th ed, Asia: John Wiley & Sons Singapore Pte. Ltd.
Edibasics (2015) Supply Chain Structure [Image Online]. Available from: [Accessed: 15 April 2015].
Cmuscm (2014) Supply Chain Management [Image Online]. Available from: [Accessed on: 16 April 2015].
The Economist (2010) The Machine that ran too hot. [Online] London, The Economist. Available from:
Toyota (2015) LOGO [Image Online]. Available from: [Accessed on:16 April 2015].
DeBenedetti, J. (2015) The Advantages of Supply Chain Management Systems. [Online]. Small Business. Available from: html [Accessed on 16 April 2015].