OLYMPUS TECHNOZONE Vol.51 2001-09

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SCM as a Business Mechanism for Responding Flexibly to the Trends of the Times

Sumio Kawai Schematic Image of the SCM
Sumio Kawai
Schematic Image of the SCM
(Click on image to expand it)
Sumio Kawai
----What exactly is SCM?

Mr. Takeuchi: 
We understand supply chain management to be nothing but the key mechanism of business. It's probably been in the last two or three years that we've begun to hear of a lot of cases where SCM was introduced. As a manufacturer, we envision a supply chain with a linked structure that enhances the overall efficiency of the integrated system from manufacturing through sales. By "supply chain management" we mean the process of optimization to cope flexibly with the changing world. US companies took on SCM as a means of promoting the further evolution of the system using IT.


Mr. Itoh: 
Since Olympus is a manufacturer, the process of buying in materials, making products, marketing and selling them, and dealing with customers is one of the key functions of our business.

Mr. Takeuchi: 
That being said, each individual function within that process is required to pursue the best methods within its own area of responsibility. Yet, even if each individual approach is excellent in itself, whether it is right for the overall system is a separate issue. If a manufacturer makes what it wants to make and its salespersons sell what they want to sell, it will be impossible for the company to follow comprehensive management practices whereby it makes products based on the actual market needs. This can lead to a situation where it does not make things that should be made, or fails to make things even though there is demand for them. It creates situations where inventories get too big, or are short. Situations like this affect any management to a greater or lesser extent, but SCM represents an attempt to maximize business opportunities by dynamically linking individual functions. I believe it will eventually constitute an essential foundation for enabling in-company systems to function with maximum efficiency by providing an overview of what to manufacture, in what quantities and when, how best to deliver the products to customers, and what to do about new services going forward.
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