Melnyk et al.2014 Essay

Supply chains manage the movement of products from the acquisition of raw materials through production and finally distribution to the end user. A properly designed supply chain can create many opportunities to drive down cost and increase revenue opportunities. In order to create a supply chain that is sustainable and flexible it is necessary to identify and align company goals and initiatives with the manufacturing and distribution of products.

From 1990s, due to the economic globalization and the increased competitive pressures, lots of firms increase their focus on integrated supply chain management to gain a competitive advantage. Effective supply chain can facilitate a firm to be more competitive not only by reducing the purchasing costs but also improving the competitive dimensions of quality, dependability, flexibility, and innovation.

What is the right supply chain for your product ? is the question asked by Marshall L. Fisher in his article titled, “What is the Right Supply Chain for Your Product ?” published in March-April 1997 issue of the Harvard Business Review. Author raises the question stating the fact that new ideas and technology implemented haven’t lead to improved performance. Performance has not become better but rather in at least some cases, has worsened due to costs rocketing to unprecedented levels.

Supply chain management is a complex undertaking that must involve more than one organization’s efforts to succeed. A tremendous amount of skill, time, and money must be present to build and develop relationships, discover and implement a strategy, and use the capabilities of the chain to build quality at an efficient financial rate. Allowing for these requirements, it leaves one to wonder whether supply chain management is a viable option. The answer is yes, because an organization needs a strong supply chain to compete and be profitable in the marketplace. The key points for supply chain management should be to meet customer demand, produce excellent customer value, enhance responsiveness to change, build a network that can resist risk, and develop financial success.

The best organizations worldwide are discovering a strong new supply of competitive advantage. It 's known as supply chain management and it encompasses all of those built-in activities that bring product to market and create satisfied customers. The supply Chain management program integrates issues from manufacturing operations, purchasing, transportation, and physical distribution into a unified program. Positive supply chain management, then, coordinates and integrates all of these hobbies right into a seamless approach. It embraces and hyperlinks all of the companions within the chain. In addition to the departments within the group, these partners comprise vendors, carriers, third party companies, and information programs vendors.

“The best supply chains aren’t just fast and cost effective, they are also agile and adaptable and they ensure that all their companies interests stay aligned.”- Hall L Lee

The supply chain management basically involves processes and activities which are involved in the planning, organising, controlling and implementing the cost effective flow of goods from the point of origin to the point of consumption. The whole process will have different players like the supplier, manufacturer, distributor, retailers and the customers themselves as the end point of consumption. The supply chain has changed drastically over the years. This days they are very global in nature. Involving various complex interactions and flow of goods, data and funds between companies which are situated in different countries and continents. Even though the companies are spread across the world the manufacturing plants generally follow a similar structure which normally comprises of the suppliers, manufacturing plants, distributors, retailers, inbound and outbound logistics providers. There were a lot of challenges which arose because of the competition which made the companies to rethink their strategies in order to get the product to the right place at the right time at the lowest cost possible. The companies should always look at improving the whole supply chain and every player in the chain should coordinate with one another if they want to increase the efficiency. The organisation should realise the strategic importance of supply chain as it is a key to building a sustainable competitive edge. (Li, Ragu-Nathan, Ragu-Nathan, & Rao, 2006).

Supply Chain Management seeks to guarantee that “merchandise is produced and distributed at the right quantities, to the right locations, and at the right time. . .” (Stock, Boyer, & Harmon, 2010). It is the management of a company’s supply chain by coordination and integration of the multitude of supply chain partners that a company interacts with. Initially, the concept focused on how to make a relationship between supplier and purchaser more efficient but has now been broadened to include the management of many activities, functions, and organizations. In some industries it may include a company’s entire supply chain, including all of its customers, suppliers, and strategic partners (du Toit & Vlok, 2014; Walker & Jones, 2012). The concept has expanded so far today that many argue that there is no longer any competition among individual companies but instead competition among separate supply chains (Brun & Moretto, 2012).

As previously stated, supply chain includes every activity linked to the movement of goods from the raw-materials phase to the end-user stage. The proponents of this business process recognized that vital productivity improves from management of material flow, relationships, and information. Actually, the success and productivity of a business is dependent on the delivery of improved customer and

This way the whole supply chain can benefit from individual skills and assets which will create a synergy.

National and International businesses are becoming ever more dependent on logistics and supply chain management in order to keep pace with the demands of an increasingly global economy. This is why business leaders acknowledge that the supply chain can be a value creator and a source of competitive advantage.

Fundamental to any business organisation is the need to have an effective supply chain strategy (Aronsson, Hakan & Maria, 2006). This is achieved mainly by how an organisation can develop and implement its supply chain strategy. Development and implementation of these strategies may differ from one institution to another, but the general idea is the same across all organisations (Brewer, & Thomas, 2001). This article, therefore, shows the general importance of supply chain strategy to any organisation.

Business generally is frosted with various challenges, and that facing supply chain seems not to have gained adequate attention. Challenges could force early exit on firms’, thus imposing loses on investments. Therefore to ensure effective and efficient minimization of loses, improve profit, and operate competitively, it then becomes imperative to critically research on the challenges and proffer solutions that would minimize the impact on the chain.

However, in recent years, supply chain management has emerged as the foundation in many industries regardless of their size for creating the included relationship between suppliers and customers. This is because the supply chain management has contributed to the increase of offshore sourcing. As a result, globalization has progressed, international trade and capital flows have been expanded, which in turn has contributed to the intensity of price competition.

Master Project in International Logistics and Supply Chain Management Authors: Lining Bai Ying Zhong Tutor: Jönköping Jens Hultman 2008-01