Supply Chain Management and Value Based Management by Henry Alzamora

This concept and its real practice has been facing certain changes in this business world, according to new world trends this requires another definition; however there are firms that are changing this concept in order to face now a days driving forces. Before continuing I would like to remind you what Value Based Management is: it’s an Increasing sustainable / durable value to the company (capitalization), this is considered as the main goal of the company as we all know. Focused on proactive management and the drivers of strategic value (EBIT margins, growth turnover, business and financial risks) leading to a profitable growth of the company, focus on cash flow (liquidity Self) and the business model impacts on the ability to generate future cash flows is crucial.

One way to increase economic value of your company is by pondering Free Cash Flow /EVA and WCC (Weighted Average Cost of Capital), these two components of evaluations are related to four big value drivers which are: Innovation (time of competitive advantage), Operations Excellence (Revenue growth EBIT margins Taxes on benefits), Investments (Investments in working capital Other investments) and Financing and rating (Cost of capital), the overall objective is to increase economic value through those components of evaluation taking into account the value drivers mentioned. We definitely need to redefine our Operations Management by creating new business models due to those external driving forces that push us to change, there is such a great advantage nowadays this is called Technology, we have a wide variety on the use of Information and Communication Technology (ICT) which can help us a lot achieving so many things and more, why is this? The main reasons are changes, yesterday’s model was a model oriented to mass marketing and mass production, production driven in a way, tomorrow’s model is oriented basically to mass customization and one-to-one marketing all this in a market oriented strategy, say, using virtual network, information based and perceived customer value oriented, based on these premises we urgently need what I call a Holistic Supply Chain Management, all this is necessary for all type of economies especially for emerging ones. SCM encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, service providers, and customers.

In essence, supply chain management integrates supply and demand management within and across companies. A Holistic Supply Chain Management includes: Instead of looking only economies of scale oriented to production, they are nowadays seeking strategies leading to reducing the overall cost of the supply chain and a main focus towards the client. Information and Communication Technology (ICT), plays a very important role, it connects the point of sale or consumption to the point of supply. The logistics management focuses on customer value (value for the client) that takes the nominator perceived benefits (product quality, customer service and so on.) and the denominator total costs of ownership for the client. One of the main propelling things for this besides the ICT and Globalization trends the assignment of Managers logistics specialists with extensive benefits value propositions (menu offerings, Third Party Logistics Providers) which can add value to the overall goal.

Written By

Henry Alzamora [http://www.henryalzamora.net]

SEO Dominican Republic [http://www.henryalzamora.net], internet Dominican Republic, Dominican Republic SEO specialists

Article Source: EzineArticles.com@@ADSENSE@@.