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However, there are many challenges that companies face while trying to improve supply chain management.
One big challenge that they face is customer service, which means that ensuring that the products that a customer want are delivered at the right place and at the right time is a huge challenge for companies. This is made worse by the fact that the number of customers keeps on rising and meeting their needs is the only way they can maintain them because of the high competition in today’s market (RFID STUDY GROUP at Pennsylvania State University, 2006).
The other challenge is cost control; this is because companies in order to improve their supply chain management have to find a way to control costs. These are hard tasks considering their operating costs are under a lot of pressure. These pressures that cause an upswing in operating costs rise from, regular technology upgrades and advancements to keep up with the competitors, global customers who require goods to be shipped to them, expansion in costs of healthcare and constant increase in commodity prices. These pressures are not under companies’ control and, therefore, controlling them becomes a very hard task that leads to operating costs of supply chain management being high.
The other challenge is risk management and planning since supply chain management requires a lot of good planning and the right strategy for managing risks involved (W.K, P, & K.H, L, 2000). This is because this process has to be assessed periodically and its design has to keep on changing to ensure that market changes are accommodated. Companies have to identify risks and quantify as well as controlling them. There are constant changes in supply chain management such as introduction of new products to the market, new acquisition, new intellectual property to be protected, as well as maintenance of assets and security of shipping products. All these have to be planned and integrated prior to the process to
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Better collaboration in turn means greater communication. When firms communicate effectively (even in diverse geographical parts with different cultural backgrounds) and given that these firms are customer –focused, then knowledge on the customer value is created.
Now the business firms are not competing individually in the markets rather they are the part and parcel of different supply chain links. The only way in order to succeed in the market is that the business managers must have the ability to link different business networks or supply chain links in an effective and efficient way.
Organizations have come up with various innovative methods in all these process, which not only provide good SCM but also add value to their businesses as well as the environment including their suppliers, society as well as economy. Supply chain strategy is critical to its sustainability.
By 1990s, it became one of the most well-liked management term (Hugos, 2006). A supply chain can be seen as the alignment of three or more firms that are directly linked by the downstream as well as upstream flows of goods, services, information and finances from a particular source to the customers.
The author states that the concept of ethics in supply chain management was activated when BBC Panorama exposed the unethical supply chains of sports and clothing companies such as Nike and Gap. These companies hired under-aged Cambodians at minimum wages in order to keep down prices for the end users.
Stock maintenance should be ensured through material flows. Zara, a Spanish clothing outlet, follows automated routing systems for transporting electronically tagged clothes to correct loading bays in its logistics locations. This electronic procedure assists in minimising shrinkage levels with 98.9% accuracy in distribution.
Green Supply Chain Management.
Although the concept of green supply chain is one of the most argued topics among industrial experts and research scholars but surprisingly very few researchers have tried to explore the topic seriously. To understand the core concepts of green supply chain management, one has to define supply chain management.
To bring the main actors in the market together, for example, suppliers, manufactures, and stores are put together to simplify the production of commodities being produced, and then circulated at the right time. The captions are going to capture the
The micro-economic approach in regard to market logistics and strategic plans of an organization is extensively discussed. The effective warehouse management and transport arrangements are basic market logistic constituents (Jespersen & Skjøtt-Larsen, 2005). It is
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