Discussion question on supply chain management and capacity management Essay

Discussion question on supply chain management and capacity management - Essay Example This serves to minimize system wide costs, and at the same time ensures satisfaction of the service levels. As such, supply chain management adds value and ensures a clear competitive advantage. Some of the objectives of this intervention are to remove assets from the balance sheet, reduce working capital, improving cash to cash cycles, and enhancing inventory turns (Ozkurt, 2013). The impact of supply chain management on the financial position of an organization assumes importance due to the fact that competition is between supply chains and not organizations. This situation is the reality of the contemporary business world. The emphasis, since the 1990s, when globalization came to the fore, has been the conveying of a product to the right place at the right time and at the minimum price (Li, Ragu – Nathan, Ragu – Nathan, & Rao, 2006, p. 107). Capacity strategy is an important principle that utilizes advanced simulation modelling to enable business organization to develop realistic and relevant capacity strategies. Moreover, such strategies are painstakingly evaluated from the operational and financial perspectives. In the context of healthcare organizations, the capacity strategy promotes the optimization of capacity in the principal departments and service lines. This salutary outcome is achieved by authenticating and developing specific strategies aimed at improvement, formulating a structure of governance, and engendering inter – disciplinary commitment (General Electric Company, 2013). With regard to adhering to a schedule of end user response times, capacity management provides information about the exact proportion of infrastructure investments required. In fact, capacity management makes it a simple task to compare vendors and establish the optimal configuration of infrastructure necessary for meeting service levels at the best cost. Another advantage is that performance