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Introduction 1
1 Supply Chain and Supply Chain Management 3
1.1 Supply Chain 3
1.2 Supply Chain 5
2 Efficiency and Effectiveness of Supply Chain 7
2.1 Definition of efficiency and effectiveness 7
2.2 Efficiency and Effectiveness of Supply Chain 7
2.2.1 Efficiency of Supply Chain – Lean Supply Chain 8
2.2.2 Customer effectiveness – Agile Supply Chain 10
3 Compatibility of supply chain efficiency and effectiveness 15
3.1 Construction of efficient and effective supply chain 15
3.1.1 Efficient and effective Replenishment 17
3.1.2 Efficient and effective Operations 17
3.1.3 Efficient and effective Administration 18
3.1.4 Efficient and effective Assortment 18
3.1.5 Efficient and effective Promotions 19
3.1.6 Efficient and effective Product Development 20
3.2 How to collaborate 21
4 Case study 1: The supply chain of Valeo Service Ltd 23
4.1 Introduction of Valeo Service 23
4.2 The supply chain of Valeo Service 25
4.2.1 The 5 AXES 26
4.2.2 The inter VS Flow Project 35
4.2.3 Sales, Inventory and Operations Planning (SIOP) 40
5 Case study 2: VMI and DMI of Midea Group 42
5.1 The Midea Group 42
5.2 The challenges 43
5.3 Implementation of VMI and DMI 43
6 Conclusion 46
List of references 48

Introduction
When is a supply chain strategy successful? Many Supply Chain Managers today would emphasis on efficiency - reduce costs, improve efficiencies and reward customers with low price. However, this “lean” thinking makes a vulnerable supply chain. This is similar to people who follow a diet with a one-sided focus on weight loss may lead to a deterioration of health. People are better served by a balanced approach focused on the overall health, which nutrition, exercise and mental effort to be aligned and where people bodied be made to temptation from the environment to resist so that the longer term health is assured. The short- term strategy on cost reduction would simply consider customers that they only revolve around reduced price. However, price is not a major determinant of satisfaction for customers.
A too-narrow focus on costs often leads to a fragile supply chain that is inflexible and the slightest irregularity in the area hardly functional. This brings with it the risk that disgruntled customers will walk away with the result that the turnover eventually falls. The opposite also happens. There are also companies that do everything to improve the customer service: the customer is king. These companies provide the customer exactly what he wants exactly and when he needs it but without asking themselves what the return from that customer really is. Unfortunately, even for these companies, customers go away because ultimately the costs will be high resulting in an unacceptable high price to be paid for the products and services.
Both examples above lead ultimately to a reduction in sales and costs compared to turnover.
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