GUIDELINES ON SUPPLY CHAIN MANAGEMENT IN THE FURNITURE SECTOR

• Interest & usefulness for the manufacturer


The evolving business context moves forward the level of competition: the firm success does not only depend onto the management of core activities, but also on supply management. Indeed, the company competitive advantage is more and more dependent on capabilities that lay beyond its boundaries. So, upwards and downwards the supply chain, a company needs to be able to create and sustain a wide variety of relationships with clients and suppliers. Also, the growing trend towards outsourcing that the furniture industry is experiencing fosters this necessity.

Despite the term “supply chain management” (SCM) first appeared in literature during the 80s it has its roots in the 60s, thanks to the Council of Supply Chain Management Professionals (CSCMP). Today SCM is considered as a process-oriented approach to managing product, information and funds flow across the overall supply network, from the initial suppliers to the final end consumers. The key elements of this definition are: the need to manage processes across multiple firms; the involvement of physical, information and fund flows, which correspond to different perspectives and methodologies; the existence of a supply and distribution network, rather than a sequential series of companies.

Hence, several actors determine the overall supply chain performances. The two most widely acknowledged performance measures are: total logistic cost of the network and service level delivered to the final customer. Both of them are multi-dimensional concepts and are determined by the action of several organizational units. A classical trade-off relation occurs between these two indicators: actions aimed at containing total logistic cost risk to decrease service level. In order to improve logistic cost either improving or at least keeping constant the service level, a firm should act on innovation, information technology and cooperation along the supply chain.

Every supply chain has to define its competitive priorities and evaluate the best positioning in terms of logistic cost and service level. In doing so, different approaches are available.

As a consequence, according to different key performances addressed, the supply chain can be managed differently. In recent years, new supply chain strategies tried to move further the cost-service trade-off, working both on speed and efficiency. Two dimensions – namely Product and Process typology – lead to different supply chain strategies: Lean, Responsive, Risk hedging, Agile.

In order to understand which are the levers useful for configuring the supply chain, the Supply Chain Council (SCC) has developed and endorsed the Supply Chain Operations Reference model (SCOR) as the cross-industry standard for supply chain management. Process reference models integrate the well-known concepts of business process reengineering, benchmarking, and process measurement into a cross-functional framework.