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Supply Chain Management - Essay Example

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Supply Chain Management For the organizations to survive and succeed, it needs to manufacture apt products by sourcing the needed raw materials and by reaching the finished products to the intended customers. These two processes of sourcing the raw materials and reaching the finished products can function optimally only if the organization actualizes an efficient Supply Chain, and follows effective Supply Chain Management (SCM) strategies…
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Supply Chain Management

Download file to see previous pages... Thus, the concept as well as the process of SCM encapsulates all the methods and procedures needed “for the comprehensive configuration, planning and control of cross business and company wide supply chains” (Thaler, 1999; Walther and Bund, 2001). Among all the ‘tools’, various modes of transportation forms an integral component, without which Supply chain cannot function and can even collapse. This was visible during the volcanic eruptions in Iceland in 2010. The ash in the clouds impacted the air transportation, which not only affected the passenger traffic, but also the movement of goods in the supply chain. The ash emitted by the Eyjafjallajokull volcano eruption in Iceland spread far and wide, particularly over many of the European countries, causing the closure of airspace and grounding of flights. “British government closed the country's entire airspace, grounding all flights at five airports, including the flights whose journeys originated elsewhere in Europe, North America and beyond and who would have only passed through Heathrow.” (Walsh 2010). ...
“World container traffic in 1970 was virtually zero, today it is around 500 million tons per year.” (Short 2010). In addition, when there is need for quick transportation and delivery, air transportations are the best option, and this is particularly relevant in the current times with the manufacturing supply chain being quickened through various processes. “Iceland’s volcanic ash disrupted air transport across Europe and gave the world’s manufacturing supply chain one of its biggest tests since the advent of the low-inventory, just-in-time era” (The Economist). The grounding of the flights impeded the flow of raw materials to the industries in Europe from all over the world, as well as vice-versa. In addition, the finished goods could not also reach the customers within the stipulated deadlines, in both the ways. These restrictions on the supply chain resulted in heavy losses to the involved organizations as well as the airlines industry. The International Air Transport Association (IATA) estimated that due to wrecking of the supply chains as well as passenger traffic, airline industry lost at least $200 million per day (Banham 2010). This type of disruptions not only affects the major players but also the small local players in the supply chain, particularly the small retailers who sell the finished products to the customers. This can be seen during the Icelandic volcanic eruptions as well. That is, many retailers located in the UK and other European regions were affected by the lack of supplies and also delayed supplies. With many retailers not receiving “the goods needed to keep their stores in stock”, it led to ...Download file to see next pagesRead More
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