Supply Chain Management - Assignment Example

SUPPLY CHAIN MANAGEMENT Name Course: Instructor: Institution: City: Date: Supply Chain Management Part A Supply Chain Performance Indicators Supply Chain Responsiveness Supply Chain Management (SCM) has emerged as a critical operations management strategy for modern entities in improving their overall organizational competitiveness. A responsive supply chain function is being used as a platform for enabling development of competitive strategies in highly complex networked markets. Supply chain management is made up of a variety of activities such as exchanges of critical information, goods between distributors, and suppliers to the end consumers and other entities that may be associated within an extended supply chain. A responsive supply chain function is termed as a critical for modern organizations in enabling the meet various organizational and operation demands. Supply chain responsiveness is critical in meeting demands such as heightened levels of fragmentation, changing consumer expectations and high levels of market literacy. Responsiveness within modern supply chains can be associated with the ever-evolving nature of buying behavior. Theorists suggest that it is critical that supply chains be directed by demand to ensure optimized service delivery and satisfaction by the end users or consumers. Market segmentation is a critical starting point for understanding the aspect of demand led supply chain management. Supply chain responsiveness has been termed as a global industrial paradigm that is applicable to manufacturers in the 21st Century. In high evolving and competitive environments, the need for development of costs effective solutions for organizations and supply chain facilities is critical. Supply chain locations and organizations should be highly responsive and flexible to meet the evolving consumer needs. According to available data, the Australian dairy industry has an efficient supply chain function, which is illustrated, through the amount of goods exported to foreign markets. The entire dairy industry is estimated to be worth more than $13billion to include manufacturing and export activities. In addition, the dairy industry is made up of more than 6700 dairy farmers who are responsible for providing estimated 9.5billion liters of milk annually. Given the presence of significant potential for enhanced production and delivery capacities, improving the supply chain function would be critical for the growth and survival of this industry. The supply chain responsiveness includes focusing on ensuring the availability of various inputs such as feeds, arable land, expertise, medicines, and efficient movement of processed goods to the consumers in various markets, local and foreign. Meeting the various needs and expectations of consumers amounts to responsiveness and is usually demand driven. Supply chains responsiveness are understood to be demand driven given that innovation and integration is undertaken to respond to consumer or market needs. Price waterhouse Coopers (PwC) report Australia Dairy Industry: The Basic provides an analysis of the entity diary farming industry in the country and into international markets. It notes that Australia is the 3rd largest exporter of dairy products with more than 50% of all production being targeted at foreign markets. It is the third largest rural related industry behind wheat and beef respectively. The export of 50% production capacity and being the third largest global exporter of dairy products, demands the need of an efficient supply chain system that enables rapid and high levels of responsiveness to consumer needs. It is noted that the industry underwent significant deregulation so as induce competitiveness and enable stability for the players in this highly volatile industry. Godsell et al., (2006) in the article Customer Responsive Supply Chain Strategy: An Unnatural Act note that responsive supply chain management can be understood in two critical perspectives namely market led supply chain and enabling strategies. Market led strategy is understood as focusing on market segmentation as a primary source of information based on demands, consumer needs and expectations within an identified market. Gunasekarana, Lai, & Cheng, (2008) in the article Responsive supply chain: a competitive strategy in a networked economy, provides that the development of responsive supply chain management strategies is critical towards revival and growth of modern organizations. The authors also note that responsiveness is marked by agility whereby organizations are able to internalize market knowledge and in the process exploit the various profitable opportunities that may exist within a volatile market. Supply Chain Practice Strategic Supplier Partnerships Strategic partnerships with suppliers provide modern organizations with avenues for enhancing their competitiveness through value creation. Strategic partnerships with suppliers are critical for the overall engagement of an entity with its clients and more so the relationships between a supplier and customers. Hence, the selection of suppliers is a critical process that may influence the overall success of an entity in a new or existing market. Christopher, & Juttner, (2000) in Developing Strategic Partnerships in the Supply Chain: a Practitioner Perspective, provide that strategic partnerships for manufacturers and other organizations with suppliers have become critical towards competitive advantage. This has prompted some organizations to re-appraise their value chains and in the process outsource various activities that may be termed as non-core. In addition, strategic partnerships are founded on the need by a firm to enhance its competitiveness through its competencies and capabilities. Furthermore, this is also coupled by the need for rationalization of supplier bases as a means of ensuring responsiveness and agility in such functions for optimized service delivery to the customers. The need for supplier rationalization can be attributed to the continuous search for quality improvement and enabling innovation. Additionally, this is also founded on the realization of the presence of a limit towards which multiple supplier relations can be managed electively. Cooperation and healthy partnerships are critical for achievement of set out long-term goals and objectives for modern entities. Christopher, & Juttner, (2000) note that, “supply chains compete, not companies”. This is indicative that the structuring of supply chain management as a business strategy development is critical for success and survival of an organization. The establishment of partnerships in the dairy industry has been critical towards growth and survival of this market in Australia. The fresh produce industry in Australia deals with highly perishable commodities, which demand the presence of a complex and efficient supply chain function, that is able to deliver products accurate in terms of quality and quantity. The fresh produce industry earned an estimated $6.2billion in the year 2012-2013. The presence of adequate supplier partnerships is critical towards stemming losses that are usually associated with poor supply chain functions. Supplier partnerships are effective in ensuring integrated activities and processes towards a demand driven supply chain function. Dairy products can be termed as highly perishable, which demands the need for critical partnerships with suppliers in various identified market segments. Such partnerships are critical for survival of businesses and more so success in foreign or existing markets. The dairy industry is a complex and sensitive market given that it is focused on ensuring satisfaction of ever-changing consumer needs and expectations. Thus to ensure that all consumers are satisfied and more so loyal to specific companies, there is a growing focus on ensuring the presence of reliable costumer relationships. These are critical towards establishment, maintenance and continued business for an entity. Customer relationships are critical for the success and overall performance of these entities given that consumer satisfaction with selected products is central to loyalty and continued support. This has given rise to establishment of cooperative such as Bega Cheese and sale of others such as Dairy Farmers. In addition, the emergence of partnerships has been critical towards innovation and creativity in the dairy industry in the country. The emergence of strategic partnerships with suppliers is critical towards creation of critical relationships for comparative advantage for players in the dairy industry. Partnerships with suppliers are critical towards positioning which has enabled Australia to become one of the primary exporters of diary products around the world. The establishment of partnership with retail entities and suppliers in critical markets such as south East Asia, Middle East, Japan and other Asian countries has been effective in enabling this industry to thrive despite the presence of numerous challenges. Partnerships are critical to overcome challenges such as volatility of input prices, protections within competitor markets, unreliable climate, and policy uncertainty in foreign markets. Partnerships are also inclusive of engagements with manufacturers of animal feeds, suppliers of animal medicine and water. These are critical inputs, which have been termed as a challenge for many small and large-scale farmers, engagements with such parties is necessary to ensure that farmers are able to achieve stability in the prices of basic inputs for their farms. Warrnambool Cheese & Butter (WCB) which is one of the oldest dairy products entity in Australia notes that it relies on subsidiary entities in various locations across south of Australia for collection and intermediate processing of milk received from farms. This is critical towards ensuring ease in access and subsequent distribution of products to local outlets an more so for the export markets. Companies are increasingly focusing on fostering cooperative and long-term relationships within their respective supply chains. Supplying and purchasing entities should also focus on understanding on means of management and optimization of such relationships and networks. Understanding that relationships management is a critical strategic priority for organizations that exists within an overarching business strategy has grown in terms of acceptance despite inadequacies of traditional management tools to accommodate such changes. the traditional approach that arise from the industrial environments came about as a result of the distinct markets that are significantly different from those in existence today. Hence they are incapable to enable organizations to meet evolving consumer and market needs. Strategic partnerships should focus on competencies and capabilities of suppliers to ensure that an entity is able to utilize such bases for entry and sustainable growth in new or existing markets. Customer Relationships Customer relationships for entities such as Warrnambool Cheese & Butter (WCB) are critical for its survival in highly volatile markets. With the emergence of new technologies, the entity has been able to realign its strategies with the demands and expectations in both local and international markets. This has been termed as the reason that the entity remains the oldest dairy products firm in Australia. South East Asia markets have been responsible for the 33% increase in demand for dairy products in the past decade. This demand markets are critical towards growth and survival of diary firms in the country given that they provide readily available revenue for a large number of entities in Australia. The presence of a demand driven market enables players in this field to understand the expectations from consumers in different market segments and in the process, dairy firms are able to develop products and deliver services that appeal to the needs, wants, and preferences of consumers in various markets across the globe. The presence of new technologies such as social media provides readily available communication channels for the players and enables them to interact with consumers on different levels. Furthermore, this enables access to markets, which ware marked by barriers of language and communication in different parts of the world. It is critical for modern organizations to move towards enhancing their relationships with customers by adoption of new strategies and innovation to meet evolving consumer needs. The combination of information systems, customer relationship management, and supply chain management is critical towards enabling optimization of competitive advantage for an entity. The establishment and maintenance of sustainable long-term relationships and networks with customer is critical for the survival and growth of an organization. Özlen, & Hadžiahmetović, (2013) in Customer Relationship Management and Supply Chain Management, provide that customer relationship management and supply chain management should be merged towards development of optimized networks. Lado, Paulraj & Chen (2011) in the article Customer focus, supply-chain relational capabilities, and performance: Evidence from US manufacturing industries, undertook evaluation of the relationships in existence amongst the customer focus of an entity and core aspects of supply chain management such as financial performance and customer service. The article notes that the focus on customer relations is critical towards the supply chain relation capabilities and subsequent performance of an organization. Relationship management is critical towards enabling perceptions of value in business relationships as in the case of networks between suppliers and their customers. Interlocking supply chain management (SCM) and relationship management (RM) competencies is critical towards the achievement of responsive and adequate product supply in both multi-tier and end-user supply networks. It is evident that such approaches are critical in strategic planning within an organizations role in a large supply chain as well as planning of the various cross-functional groupwork in organizational operations. Understanding supply chain management (SCM) through customer relationship management enables organizations to focus on operations that optimize the satisfaction of their customer through enhanced supply chain networks. Part B Sweeney, Grant, & Mangan (2015) in the article The implementation of supply chain management theory in practice: an empirical investigation, the authors were driven by the need to disentangle realistic and theoretical perspectives of adoption of supply chain management strategies in organizations. The article was inclusive in noting of the presence of divergences between theoretical and practical aspects of supply chain management as applied in modern organizations. The article provides a new definitional perspective and construct of supply chain management. In the introduction, the authors provide that supply chain management’s introduction by management consultants in the 1980s has grown in terms of prominence and application in commercial and academic fields. Supply chain management has brought about the emergence of new perspectives and knowledge critical for modern organizations. They acknowledge that supply chain management has been critical towards delivering new perspectives that are critical towards optimization of organizational performance. However, they note that there is a significant divergence between theoretical and practical applications and perspectives of supply chain management. The article makes a specific note that supply chains should be managed from an “end-to-end” approach as provided by theoretical frameworks. They note that the “end-to-end” perspective is instructive given that the integration between processes in the supply chain and availability of information are core to contemporary ideologies of supply chain management. They assume that integration between processes in the supply chain management are rhetorical and a challenge to implement rendering theoretical models of supply chain management integration complex for utilization. Other works have also raised concern over the real influence and effect of supply chain management in organizational processes. Some suggest that supply chain management seemingly suffers from what can be termed as an underlying frustration because of differing perceptions that are largely ignored in organizations. The authors also refer to the works of Kotzab et al. (2011), whereby the study noted the presence of “dearth of evidence in relation to the extent to which SCM – as defined in the academic literature – is implemented or even understood in practice”. This expressly suggests the presence of differences between theoretical frameworks and practical applications of supply chain management. The research provided in this article attempted to provide the various perspectives over the presence of differences between theoretical and practical application of supply chain management in modern markets or organizations. The article attempted to develop a profile set of the existing levels of adoption and understanding as well as the identification of the factors that are critical towards the adoption of supply chain management models in modern organizations. The paper also discusses a variety of issues and themes prevalent in supply chain management. Some of the issues discussed by the authors include the evidence of the role played by effective adoption of supply chain management in organizations resulting in improvements in organizational performance. The authors note, based on previous studies, that high practices of supply chain management could give rise to “enhanced competitive advantage and improved organizational performance”. In addition, it is evident that entities that high levels of integration in the supply chain function such as supplier and customer integration are relative to incidences of performance improvement. Additionally, the authors within the literature review note that the integration of various processes and information within a given supply chain is central to supply chain management. On the other hand, works by Fabbe-Costes & Jahre (2008) provide that the various empirical studies studied noted of the need for caution in association of supply chain management integration in an organization and linking it to enhanced levels of performance despite the presence of a significant number of works suggesting the latter. This gives rise to assumptions that the predominant practices of organizations in managing their respective supply chains contradict the theoretical frameworks core to the supply chain integration and management. The excessive supply chain management definitions have only come about in recent years. In addition, evidence is also indicative of the presence of differences between approach and emphasis amongst practitioners, which vary because of differing functional backgrounds, hierarchal positions, geographical locations, and business sector. Furthermore, the emergence of new terms over the years have brought about complexities related to differences in understanding of the role and impact of supply chain management on organizational performance across professions and businesses. The author also refers to Mentzer et al. (2001) who note that despite the popularity associated with the term supply chain management, it remains a term that is confusing to a large number of professionals. It is an area that is marked by ambiguity and confusion, especially the relation between supply chain management and its primary antecedent, logistics. On the other hand, logistics is seen to have a distinctive definition when compared to supply chain management. This prompts the need for a unified approach towards the development of an accurate definition and description of supply chain management. The authors refer to Stock &Boyer (2009) who noted that there are more than 166 definitions of supply chain management that have emerged over the years. They also state that, “Without the adoption of a uniform agreed upon definition of supply chain management (SCM), researchers and practitioners will not be able to “advance the theory and practice” of the discipline”. Development of an integrated definition of supply chain management would be critical towards enabling researchers and professionals to advance various aspects of theory and practice of supply chain management. The article also notes the presence of variations that have brought about the proliferation of terminologies that overlap one another. Additionally, the numerous definitions of supply chain management (SCM) provided in a variety of literature are usually short definitions. Some authors provide that the presence of variations in definitions of supply chain management arise as a result of “achievements in verbal and linguistic dexterity rather than definitions which are likely to add clarity from a supply chain management (SCM) application perspective.” The article also notes that the development of a unified definition of supply chain management can be brought by focusing on four primary fundamentals. These fundamentals are critical towards developing an overarching and unambiguous definition of supply chain management. Sweeney, Grant, & Mangan (2015) were driven by the need to provide an in-depth understanding of the four fundamentals towards definition of supply chain management. The article’s primary audience is practitioners given that it seeks to establish the viability and applicability of practical techniques of supply chain management. This is achieved by elimination of use of complex languages and jargon in definition of supply chain management. The article highlights the four fundamentals, which it relates to four issues that are discussed within the paper. Fundamental 1 Establishment of supply chain management objectives Fundamental 2 supply chain management integration Fundamental 3 Managing supply chain flows Fundamental 4 Supply chain relationships Using these four critical fundamentals the authors embark on the discussion of four primary issues based on these core concepts. The issues are highlighted as: 1. Setting of the various supply chain management objectives that are relative to customer satisfaction and financial performance within the organization 2. Supply chain management philosophy that is largely based on the concept of integration of core processes within a given supply chain 3. Supply chain management relative to creation and management within organizations This construct used in the article provides the importance of objectives towards the presence of a clear focus I the definition of supply chain management. Key objectives highlighted are provided as: 1. Meeting and exceeding the demanded levels of customer service or goods demanded by consumers with an identified consumer market. This highlights the importance of customer service and ensuring satisfaction within a given supply chain function. It is also indicative that developing responsiveness in an organization through relationship marketing and supply chain management may be effective in transformation of the supply networks. Responsiveness is critic al towards technical generation of value in an entire supply chain network through product transformations and focusing on the value expectations of the end users. 2. Optimization of the entire supply chain cost and investment is critical for success. It is also indicative of the responsiveness of a supply chain function towards the demands and expectations within a market segment selected by an organization. The article highlights that the service-cost approach has over the years been termed as a cortical component of supply chain management. This can likened to Toyota’s approach towards integration and streamlining its supply chain function. Toyota’s responsiveness is illustrated by its lean manufacturing system that was geared towards responding to consumer needs in terms of quantity and quality. It identifies its objectives as manufacturing or making vehicles that are ordered by the consumers in a fast and efficient manner with an aim of meeting customer needs and expectations. The presence of such an objective has been critical in enabling the entity to establish its presence in numerous markets around the world. By focusing on its value chain, the entity was able to focus on support and core processes towards ensuring a responsive supply chain function. The emergence of just in time was driven by the adoption of lean management systems that focused on ensuring a highly efficient and effective function. Additionally integration of processes between the vendors, manufacturer, dealers, and subsequent sales to consumers are critical towards the growth and survival of Toyota in a highly volatile automotive market. Integration is a critical factor in the overall success of a supply chain as in the case of Toyota. Toyota has been able to move towards enhancing their relationships with customers by adoption of new strategies and innovation to meet evolving consumer needs. The combination of information systems, customer relationship management, and supply chain management is critical towards enabling optimization of competitive advantage for an entity. It is critical that organizations use supply chain management practices as a means of optimizing their interactions and relationships with suppliers and customers. With the incorporation of relationship management, strategic management, and supply chain management Toyota has been able to ensure high levels of integration between functions as well as high competitive advantage in the automotive industry. It is also evident that integration of processes is central or core to the entire field of supply chain management. The second fundamental makes recognition of the various activities within supply chin functions, which were traditionally managed as isolated processes. This would bring about conflicts given that they were usually operated based on cross-purposes. The third fundamental makes recognition of use of supply chain management philosophy. The integration of processes enables the presence of efficient and effective flows of services, goods, and information, which are critical towards subsequent satisfaction of customer needs. In addition, this is critical towards the realization of the overall goals and objectives of the supply chain function. Fundamental four highlights the critical nature of relationships and networks within a supply chain function. It is indicative of the overall need for integration between networks and how this contributes to the overall achievements of objectives within a supply chain function and more so the organization. It is critical for modern organizations to move towards enhancing their relationships with customers by adoption of new strategies and innovation to meet evolving consumer needs. The combination of information systems, customer relationship management, and supply chain management is critical towards enabling optimization of competitive advantage for an entity. 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