The Implementation of Supply Chain Management Theory in Logistics Systems - Essay Example

BUSINESS ECONOMICS (Student Name) (Course No.) (Lecturer) (University) (Date) PART A: Analysis of Recent Literature Review in SCM Discussion and Analysis of Supply Chain Management (SCM) SCM entails all the activities taking place within an organization to ensure the resulting product meets the expectations of the consumers in the market. It takes consideration the quality of the product and ensures that the product reaches consumers at right time. Moreover, it ensures there is proper planning that focuses on the current and future position of the product in the market, consumer purchasing power, product assembly, movement of the product from production to consumption, and customer related services (Blanchard, 2010, 107). Business entities with properly functioning SCM have practitioners who ensure that the entire process helps in creating a positive brand image in the market for sustainable competitive advantage. This is only attainable when firms produce better products, faster, and cost effective among the consumers. Modern organizations with complex management structure often have practitioners in almost all sectors of the production process include logistics, product development stage, quality management, and public relations management. For example, the Australian Agribusiness Firms like those dealing in red meat have been experiencing competitive pressure from potential customers demanding provision of innovative services that meet not only their requirements but also those of global business environments. This is the point in which SCM comes in to ensure there is proper understanding and optimization of business process in order to achieve the desired outcome. Literature Review Efficient and reliable SCM practitioner must have detailed and oriented skills of prioritizing on issues affecting the organization. Besides, they must be able to plan and organize business activities successfully in order to ensure the culture of accountability prevails within the business. From the flow management point, SCM practitioners have to be quick learners who pose relevant communication skills and quicker decision makers. Upon integration of the practitioners into the management, it is their responsibility to reengineer business activities especially in firms with varied functional departments and assist in developing objectives aimed at improving business performances and profitability within a global scale (Chopra & Meindl, 2007, 122). Any successful SCM ensure proper integration and coordination of all activities taking place within a business. In addition, it creates a link among the stakeholders to ensure the information moves across the management team. SCM covers all aspects relating projects sourcing, procurements, and supply management. Since SCM views all business activities from procurement of raw materials to consumption, it is therefore important to consider external partners including the suppliers, customers, and distributors. Practitioners refer to them as the external supply chain whose responsibility is to ensure they are offering services, which in turn have positive impact on the ultimate consumer. Since SCM encourages timely production of products, hence businesses ensuring their products are on the market fast are likely to increase their profit advantage (Bowersox, Closs, & Cooper, 2002, 127). On the other hand, if the alternative products reach the market at similar time, either of these products is likely to experience increased or broken sale depending on the consumers taste and preference in relation to products in question. From this point, it is evident that SCM plays a crucial role in the movement of a product within the market. Globally, industries are encouraging the use SCM in creating the brand images; therefore, analyzing from that standpoint, the future of SCM in business management looks promising. Factors playing the role of marketing SCM are customer services focus and information technology. If an organization is to experience excellent SCM output, there is need to ensure integration of these factors into management. The major assumption of SCM technique is that products are always available whenever they are required. With the rising incorporation of technology into management, modern SCM often hire the services of computer based application service provider (ASAP) which provides SCM services for different organizations at prescribed fee (Lambert & Cooper, 2010, 115). This application monitors the three major flows within the business, which include product, information, and finances. Material flow encompasses the movements of goods from the supplier to the consumers through production, storage, and distribution processes. Information flows involves transmission and updating issues throughout the organization while the financial flows takes into account all credit terms, payments, and consignment arrangements. Supply Chain Practices Businesses practicing SCM often enjoy competitive advantage within the market. Some of the practices they employ include strategic supplier partnership and continuous improvement in the quality of the product. Establishing proper supplier relationship assists in improving the efficiency and effectiveness of the product since both the producer and supplier bring on board their views on how to ensure there is production of a quality product. These alliances often aim to boost the relationship between the buyer and seller. The main objectives that ensures effective alliance with the suppliers are provision of methods which aims at guaranteeing healthy and vibrant relationship, creation of a platform that ensure firms resolves problems amicably, and ensuring that the firm achieves its performance measurement objectives. Moreover, the alliance supplier with the supplier must ensure there is development of goals continuously that aims at attaining the value for the involved parties. Whenever there is sound alliance management program, the suppliers often report improvements in the value that is sustainable. Another practice that exhibit application of SCM technique is the continuous improvement in the organizational activities. With time, several changes often occur within the global market; therefore, business entities must be flexible to paradigm shifts occurring within the market. These include marketing strategies, tastes, and preferences among the consumers, and economic dynamics. Firms achieve success through monitoring market and economic forces influencing in order to help adjust business activities in line with the current market expectations. Supply Chain Performance Indicators In order to show that there is improvement in business operations, many practitioners often implement SCM indicators. Positive performance of the industry highly depends on the ability of the firms to deliver efficient and reliable products to the customers. When trying to improve the performance of SCM, it is significant to focus on those areas, which are under-performing and align them with the general organizational management strategy. Some firms employ the use of logistic performance gap analysis, which compares various indicators of SCM. These businesses use the identified gap in assessing the strengths and weaknesses. A major indicator of SCM is the quality management whose implementation and measuring technique is the simplest. Firms must ensure that the quality of their products meet the required standards. This is only achievable through ensuring that the firm invests in genuine inputs that in turn ensure the final product meets the global market demand. The quality of the product in question must conform to the requirements. Management of the product quality in the supply chain is not the only the responsibility of the producer alone but also other stakeholders (Storey et al., 2006, par. 4). Therefore, it is important to the quality system of the supplier, internal system, and expectation of the customers. Product quality depends on the decisions and actions made by the management while trying to conform to outlined design and expectation of the customers. In most cases, studies term this type of quality as “fitness for use” since it centers customers while developing quality control measures to ensure the product meets the dimensions of the intended purpose. Recommendations While developing SCM for any business, it is important to recognize activities might not materialize as planned by the management. In such cases, organizations should develop a contingency plan to ensure there is balance in the supply and demand of a product when unexpected event occurs either internally or externally. If developing the guidelines for dealing with such events, it is crucial to develop them according to the expectations of the customers as outline in the customer-supplier relationship management process. In addition, there is need to develop framework of metric for measuring and monitoring the processes involved in SCM (Engel, 2011, par. 3). Focusing on customer relationship management while addressing issues relating to SCM often ensures there is consistency throughout the process. Through creation of competitive advantage by the extended enterprises, the firms operating within the Red Meat Industry as Australian Meat Processor Cooperation (AMPC) reduces inventory levels, warehousing cost, and transportation cost. As a result, consumers are able to quantify and communicate the value of supply chain. In order for the Red Meat Industry to continue remaining highly competitive, the firms operating within the industry must embrace solution seeking to improve the understanding of SCM through load planning, modal analysis, and improving distribution network design. These factors influencing SCM are corporate related challenges, therefore, it is important to employ techniques which at reengineering globalization and outsourcing aspect. PART B: Article analysis Introduction Considered as an important aspect in the management of firms, supply chain management plays a crucial role in ensuring efficiency and effectiveness of the firm. Through the years, its application has been on the rise in both academic and commercial fields with much focus on the general output of the production process. Even though its application has been able to spread into various aspects of management, there is need to understand the diverging issues relating to its practical application and theory. Firms that are integrating SCM in their management techniques have been experiencing potential positive impact on their performances due to the effectiveness and reliability of SCM tool. From theoretical point of view, it is significant to manage the chain from “end-to-end” which is an instructive thinking method when integrating SCM tools to ensure there is steady flow of information. Moreover, the information should be central in relation to SCM contemporary thinking technique. There is more rhetoric when it comes to integration of SCM than reality, which often compromises the implementation of the chain in practice compared to theory (Sweeney, Grant, & Mangan, 2015, 59). Several factors compromise the management understanding of the actual definition of SCM. These factors include diverging understanding of the practitioners who employ different implementation approaches and the ever-changing technical issues associated with development and implementation of SCM. According to the academic literature, there is a substantial gap when considering SCM in practical aspect and theory. Theoretical review SCM is becoming an important tool in most academic fields considering its increasing importance in ensuring accountability and effectiveness of the firms. As a result, many theoretical views exist in relation to varied academic disciplines integrating SCM techniques Themes and issues relating to SCM The article discussed several themes relating to method of SCM implementation, importance, and varied understanding on the tool. One of the themes that is evident clearly is the effective result owing to the implantation of the SCM within the firms and other business enterprises. Since it ensures accountability and reliability, its implementation plays an important role in determining the general output of a firm in terms of performance and level of improvement. As per the analysis of results obtained from 196 firms studied, implementation of SCM technique ensures improved competitive advantage within the market. Additionally, the firms are able to identify their strengths and weaknesses, which assist in creating a positive taste and preference in the market. Besides the competitive advantage, SCM also ensures improvement in organizational performance through coordination of all activities. The philosophy of SCM determines the process of integrating the available data and supply chain. Supply chain integration (SCI) is often the resulting tool, which in most cases have a positive impact on the general output of the performance. However, it is significant to be cautious since practical application differs from theoretical conceptualization. There has been a lot of confusion while defining SCM and logistics as most traditionalists view SCM as a fragment of logistics. On the contrary, the unionists view logistics as a fragment of SCM while intersectionists relate SCM to the strategic management role. Moreover, the intersectionists assume logistics to be more of operational orientation. Definition of SCM With the more definition of SCM, the article points out the need for universal definition. Currently, there is no agreement on how to define SCM, which often result in confusion and ambiguity. Additionally, these definitions always compromise the entire concept of SCM. Due to the existence of several definitions, SCM has been exhibiting increasing variability since the concept varies from one person to another. Most advancement in theoretical and practical application of SCM often fails due to the failure of the practitioners to coin a universal definition. In relation to understanding the definition of SCM, the article aims at providing deeper meaning of SCM to ensure there is clarity. Through continuous research, the practitioners have been able to coin four fundamental concepts in conceptualizing the definition of SCM. These concepts view SCM as a tool for setting organizational objectives, philosophy, and management of supply chain flows besides ensuring adequate supply chain relationships. In addition, the objectives relates on how to ensure proper customer relations and financial optimization through creation of a positive brand image, which contributes to the desired taste and preference among the customers (Sayed, 2013, 205). While defining SCM, the objectives ensure there is clear focus on the desired outcome. Analysis of service-cost approach plays a crucial role ensuring implementation of SCM. An effective SCM recognizes and operates across all activities relating to supply occurring within an organization. Although this is traditional perception on SCM, there is need to ensure integration of the main flows within an organization in order to acquire maximum effectiveness and efficiency. These flows include information, finances, and materials. With the existing fragments in understanding SCM, there is to integrate them through holistic approach in relation to flow management. Moreover, the integration also ensures creation and management of both internal and external relationships with customers and suppliers. Analysis and discussion The article focused on ensuring proper understanding and adoption techniques of SCM. Besides, it aimed at looking into possible interventions on issues relating to success inhibiting factors. There is greater understanding of SCM adoption technique in Ireland from comprehensive analysis of the questionnaire survey conducted. Nevertheless, there might be poor implementation strategies leading to failures of most business activities. There is insufficient practice of SCM; as a result, most organizations experience factors deterring their development (Sweeney, Grant, & Mangan, 2015, 62). On the contrary, organizations with operational SCM have the ability to mobile their resources in order to resist successful inhibiting factors. SCM offers empirical framework of that facilitates derivation of informed decisions. Consequently, it provides the foundation for addressing the challenges affecting organizations. The article emphasizes on the need to develop clear understanding of SCM and consistent among the practitioners to reduce confusions which often result due to frequent use of different concepts while looking into SCM. While analyzing the integration process, it is important to commence with understanding the role that the integration process would play, importance of incorporating different types of SCI, and the extent to which the organization should integrate both internal and external elements. Besides the integration process, understanding the existing relationship among the elements forming internal and external components of SCM is also important. For example, there is need to understand how the relations between the organization and supplies or customers influence the output from SCM. Finally, it is crucial to understand the flows. There is a close relationship between the flows and the general output. These flows include materials which relates to all organizational resources that ensures achievement of desired objective, financial flows which refers to all resources with monetary value, and information flows that ensure that information moves across the chain of management. With global increasing use of technology, ICT tools plays an integral part in ensuring there is a steady flow of information. The aim of SCM is to create a positive value of a given product thus ensuring that the general output creates efficiencies that that satisfies the requirements of the consumers. The article aims at providing normative guidance in understanding the concept of SCM and implementation strategy. From the collected data, the article focused on various aspect of business management in relation to SCM. These areas include business and supply chain environment, organization and management features, and factors enabling the success. Business and supply chain environment identifies the need for creating a relative power in the market and a common understanding of the SCM concept. In order to achieve this, it is important to integrate both the supply chain environment and management features with the focus on the customers. Management features include demographic factors, organizational strategic management strategies, firm size, and organizational brand image team. The enabling factors include positive performance activities, relevant ICT application, knowledge, and skills (Burt, Starling, & Dobler, 2003, 104). From the analysis, the managers need to understand how external factors influence the operation of SCM within an organization. Business entities need to focus on customer related strategic responses through development of appropriate knowledge and skills required to cushion customer-business relationship. Most studies indicate there is inadequate practical cohesion and visibility in the use of SCM technique in most organizations, as result, most organizational strategies relating to supply chain management often experience diverging objectives. These divergences often have a negative consequence on inconsistencies in understanding the concept of SCM. Recommendations With the rising divergence in understanding the practical and theoretical concept, there is need from the practitioners to coin a universal definition of SCM. This is important especially while differentiating the theoretical and practical understanding of SCM concept. The article lacks information on how business entities might use SCM technique to create a positive brand image in order to increase their sales volume. Moreover, SCM does not outline monitoring and evaluation techniques as methods of ensuring accountability in the flow of materials, information, and financials issues across the organizational management structure. Monitoring of SCM plays an important role strengthening the understanding of the theoretical and practical aspect of the supply chain; therefore, the practitioners should ensure there is progressive monitoring of SCM in order to increase the level of understanding in defining SCM technique. This is achievable through conducting longitudinal studies, which takes into account progress of SCM concept with time (Jayaram, Tan, & Nachiappan, 2010, 107). The empirical study of the article mainly focused on business entities in Ireland to generalize the concept of supply chain; however, there is need to realize different geographical localities experience varied understanding of SCM depending on the views of the practitioners available within the area in question. Using the four fundamentals of supply chain, the practitioners could develop new theories, which aim at fostering the understanding the concept of SCM. Organizations have the responsibility of identifying factors influencing the success of organizational activities and objectives; hence, through the use SCM, these organizations might improve their cohesion and promote effective strategies for implementing supply chain mechanisms. References Blanchard, D. (2010). Supply chain management best practices. Hoboken, NJ: John Wiley & Sons. Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2002). Supply chain logistics management. Boston, MA: McGraw-Hill. Burt, D. N., Starling, S. L., & Dobler, D. W. (2003). World class supply management: The key to supply chain management. Boston: McGraw-Hill/Irwin. Chopra, S., & Meindl, P. (2007). Supply chain management: Strategy, planning, and operation. Upper Saddle River, NJ: Pearson Prentice Hall. Engel, B. (2011, March 1). 10 best practices you should be doing now ? Procurement ? CSCMP's Supply Chain Quarterly. Retrieved from http://www.supplychainquarterly.com/topics/Procurement/scq201101bestpractices/ Jayaram, J., Tan, K., & Nachiappan, S. P. (2010). Examining the interrelationships between supply chain integration scope and supply chain management efforts. International Journal of Production Research, 42(7), 99-110. Lambert, D. M., & Cooper, M. C. (2010). Issues in Supply Chain Management. Industrial Marketing Management, 25(4), 101-120. Sayed, H. E. (2013). Supply Chain Key Performance Indicators Analysis. International Journal of Application or Innovation in Engineering & Management, 2(1), 201-210. Retrieved from http://www.ijaiem.org/volume2Issue1/IJAIEM-2013-01-28-059.pdf Storey, J., Emberson, C., Janet Godsell, J., & Harirson, A. (2006). Supply chain management: theory, practice and future challenges. Retrieved from http://www.som.cranfield.ac.uk/som/dinamic-content/media/research/scrip/theorypracticeandfuturechallenges.pdf Sweeney, E., Grant, D. B., & Mangan, D. J. (2015). The implementation of supply chain management theory in practice: an empirical investigation. An international journal, 20(1), 56-70. Read More