Mainstream Approaches to Supply Chain Management - Essay Example

? Mainstream approaches of SCM Supply chain management is the integration and the management of all the supply chains organization and activities through corporative organizational relationships, effective business processes and high levels of information sharing to create a high performing value system that provide the member organizations a sustainable competitive advantage. Hence SCM gives a great focus on management of relationships as a means of arriving at better results for all the members of a supply chain including customers (Neef, 2004). It therefore encompasses three mainstream approaches which include: - the network structure, followed by the business processes approach and finally the management approach. The network structure comprises the most important relationship of all the partners in a supply chain as well as the relationship among all the players. It is neither possible nor desirable to establish a SCM corporative network that brings together all the participants in a business network. This is due to the complexity and the costly nature that such elaborate networks can be. In addition it is to direct all the available resources to relations that are of strategic importance for the competitiveness of the business. Therefore the management of any venture has to consider the best choices for all the partners of the business. The business processing approach on the other hand brings together the activities and the flows of information that are connected with conducting materials, products and services through the supply chain which is then transferred on to the customers. Such processes run all the way from; the ordering processes, customer service, distribution, product development or time to market and ultimately supply (Hines, 2004). Lastly we have the management components approach to SCM. Under this approach we have a number of management components which revolves around business processes and the roles of the supply chain. The supply management exists in two main components that is the physical or the technical components and the behavioral or operational components. To ensure the success of the supply chain as a whole, one must be aware of these key mainstream approaches (Schary & Larsen, 2001). 2) Critical approach to SCM The critical approach to SCM brings on board four different stages otherwise called approaches. This approach generally describes the stages of evolution towards the SCM. This approach entails the Traditional Approach, under these roles the focus is on the selecting and negotiating with suppliers with the sole objective at the lowest prices (Gibbon, 2000). This approach plays a gatekeeper and relationships which are transactional and quite elaborate in nature. Secondly we have the Relational approach which is directed towards linking each element in the production and supply channel through building strong buyer seller relationships aimed at managing the flow of goods from supplier through end user (Branch, 2009). As a result of the conceptual differences between the partnerships and the alliances, this stage is not considered as one of the SCM; it serves as the critical building block towards SCM due to the commonality in factors that leads to successful partnerships and successful SCM relationships. Thirdly, we have the operational approach which emphasizes on the management of the flow of goods and information and on the other hand we have the integrative philosophy aimed at optimizing the total system is adopted (Gereffi & Korzeniewicz, 1994). The focus of this approach is for the sake of planning, implementation and controlling information and product flows with the primary objectives being improved efficiency and reduced costs. Under critical approach, we also have the strategic approach also called the value added approach. This approach expands the supply chain concept to encompass the entire sourcing process as well as the value adding and the marketing activities of the firm in question (Banfield, 1999). 3) Global commodity chains Global commodity chains are a network or rather a complex of networks of process that result in a finished goods or services (Mentzer, Myers & Stank, 2007). Such networks bring together labor, production, households, states and businesses to each other within the global economy. Global commodity chains are situationally specific, socially constructed and locally integrated, underscoring the socially embeddedness of economic organization. In the production of a commodity Global Commodity Chain can at times be represented by nodes that brings on board different processes (Daviron, 2002). Each of the above nodes represents how the firms acquire the inputs, the amount of labor power used; transportation, distribution and consumption of whose interaction are socially shaped. The Global Commodity Chain approach promotes a thorough analysis of the world economic spatial inequalities in the order of access to markets and resources (Long, 2003). This chain is network centered and employs the historical approach to analyze patterns and changes in the current world economic context as opposed to the approaches we have seen so far above (Gibbon, 2000). The Global Commodity Chains are shaped by both innovation and competition and this creates the necessity of generating new approaches or products through innovation at the nerve center of maintaining a competitive advantage. Global Commodity Chain is important because its focus is on the “creation and distribution of global wealth as embodied in a multidimensional, multistage sequence of activities, rather than as an outcome of sole industrialization (Plank & Staritz, 2009). 4) Global Production networks Understanding and conceptualizing the complexities of the contemporary global economy is a challenging but equally important task. The global interpretive network is one of the interpretive frameworks of the issue above. GPN is a wide relational framework that attempts to going beyond the very valuable though in practice more restricted Global Commodity Chain (Yusuf, Altaf, & Nabeshima, 2004). The conceptualization of both the GCC and GPN are similar on the basis of the interconnected functions, operations and transactions through which a given product or service is produced, distributed and consumed. There are though two crucial differences of the two concepts; while the GCC posses linear structures, the GPNs strive to go beyond such linearity’s so that they incorporate all the kinds of network configurations (Ernst, 2000). GPNs are also ‘simultaneously economic and political phenomena and they resemble contested organizational fields in which actors struggle over the construction of economic relationships, governance structures, institutional rules and norms, and discursive frames (Errasti, 2013). GPNs therefore exist within the “transnational space” that is constituted and structured by transnational elites, institutions, and ideologies’ (Lan & Unhelkar, 2006) References Banfield, E, 1999, Harnessing value in the supply chain: strategic sourcing in action, Wiley: New York. Branch, AE, 2009, Global supply chain management and international logistics, Routledge: New York. Daviron, B, 2002, Global commodity chains and African export agriculture, Blackwell: Oxford. Ernst, D, 2000, Carriers of cross-border knowledge diffusion information technology and global production networks, East-West Center: Honolulu, HI. Errasti, A, 2013, Global production networks: operations design and management (2nd ed.), Taylor & Francis: Boca Raton. Gereffi, G, & Korzeniewicz, M, 1994, Commodity chains and global capitalism, Greenwood Press: Westport, Conn. Gibbon, P, 2000, Global commodity chains and economic upgrading in less developed countries, Centre for Development Research: Copenhagen. Hines, T, 2004, Supply chain strategies customer driven and customer focused, Butterworth-Heinemann: Oxford. Lan, Y, & Unhelkar, B, 2006, Global integrated supply chain systems, Idea Group Pub: Hershey, PA. Long, D, 2003, International logistics: global supply chain management, Kluwer Academic Publishers: Norwell, Mass. Mentzer, JT, Myers, MB, & Stank, TP, 2007, Handbook of global supply chain management, Sage Publications: Thousand Oaks. Neef, D, 2004, The supply chain imperative, American Management Association: New York. Plank, L, & Staritz, C, 2009, Global commodity chains and production networks: understanding uneven development in the global economy, Mandelbaum: Wien. Schary, PB, & Larsen, T, 2001, Managing the global supply chain (2nd ed.), Copenhagen Business School Press: Copenhagen, Denmark. Yusuf, S, Altaf, MA, & Nabeshima, K, 2004, Global production networking and technological change in East Asia, World Bank: Washington, D.C. Read More