Supply Chain Management - Essay Example

Integrated Supply Chain Management Name Name of Institution Integrated Supply Chain Management Globalisation and increased customer desires have forced firms to compete with their core competencies as well as their entire supply chains (Vachon, Halley, & Beaulieu 2009, p. 322). In this case, the supply chain defines the group of business partners who take part in the conversion of basic commodities into finished products that are valued by the final consumers (Ogulin 2014, p. 64). It is apparent that the nature of a supply chain plays a pivotal role in determining whether a business can be successful in satisfying customer demand (Lyons & Ma’aram 2014, p. 1912). To this end, firms expend a lot of effort in ensuring that their supply chains can facilitate the supply of what is needed, when it is needed, in the form that is needed, and at a viable cost. This essay focuses on supply chain alignment where firms align their strategies with those of their supply chain partners with the aim of boosting the competitiveness of their products (Ogulin 2014, p. 71). The essay will describe the competitive priorities of cost, quality, speed, dependability and flexibility and illustrate how the alignment of strategies between firms and the supply chain leads to the achievement of enhanced competitiveness. Supply chain management concentrates on the integration of supply and demand management within and between firms in order to cater to the needs of the final customers. Supply chain management is essential as it allows firms to incur lower inventory costs while attaining a higher level of quality and customer satisfaction. According to Leeman (2015, p. 100), firms can use their supply chains to differentiate themselves from competitors thereby creating competitive advantages. This can be achieved through a focus on five performance objectives that include quality, reliability/dependability, speed, cost, and flexibility/responsiveness. First, it is acceptable that quality is the most critical performance objective in a supply chain. A firm should strive to create a supply chain that can deliver products that meet customer expectations in the areas of reliability durability and performance. In turn, the high quality allows a firm to obtain increased sales, high levels of customer satisfaction, and a good reputation. In addition to quality, an organization can achieve competitive advantage through a focus on speed. In this case, speed refers to the time interval between customer request and the receipt of products or services. The importance of speed can be seen in e-commerce where firms have obtained a competitive advantage by designing their supply chains to provide services such as same-day delivery. Flexibility is a performance measure that is related to speed. It is an acceptable fact that businesses operate in a dynamic environment. As such, they need to develop supply chains that can respond to rapid changes in the operating environment. These changes might be related to the nature of the product or service, volumes, and methods of delivery. It is clear that a flexible supply chain can save time and reduce costs. Businesses can also attain competitive advantages in their supply chains through dependability. This is a measure that is related to time and quality whereby firms are expected to deliver products and services when they are needed. For instance, a logistics firm should be able to guarantee the safety of goods in transit and ensure that they deliver them on time. Attaining a high level of dependability allows such a business to save time and money. Finally, businesses can obtain competitive advantages in supply chains through cost. It is acceptable that many consumers consider cost to be the most important factor when making purchase decisions. As such, businesses have to boost the effectiveness and efficiency of their supply chains to enable low pricing strategies that can create a sustainable competitive advantage. In addition to tailoring the supply chain to the five performance measures, firms need to align their supply chain strategies to their business strategies. According to Mitra & Bhardwaj (2010, p. 50), the alignment of the supply chain strategy with the overall business strategy is essential to the success of business. This implies that developing a supply chain strategy without a complete understanding of a firm’s overall strategy may lead to failure. It is also worth noting that business strategies are determined by the prevailing business environment with demand being a critical component of the external business environment. According to Lyons & Ma’aram (2014, p. 1924), products can be grouped into two categories that are related to demand. Functional products exhibit stable demand, low complexity, and long product life cycles. In contrast, innovative products exhibit highly variable demand, high levels of complexity, and short product life cycles (Lyons & Ma’ aram 2014, p. 1912). The considerable differences in these products will lead to differences in the business strategies adopted by the firms producing them. Supply chain alignment dictates that such businesses will only be successful if they adopt supply chain strategies that match business strategies adopted by the firms. Lyons & Ma’aram’s (2014) study of the food industries in Malaysia and the UK confirm the importance of supply chain alignment to the achievement of competitiveness. The finding was that business strategies for functional products should be aligned with lean supply chain strategies. The other general finding was that innovative business strategies should be matched with hybrid supply chains that combine efficiency and agility (Lyons & Ma’aram 2014, p. 1924). According to Mitra & Bhardwaj (2010, p. 49), Dell provides a relevant example of a business that has gained a competitive advantage by aligning its low cost and high volume business strategy with its faultless, flexible, quick, and reliable supply chain strategy. On the other hand, Cisco’s loss of $2 billion illustrates the result of failing to align supply chain strategies with business strategies (Mitra & Bhardwaj 2010 p. 49). In conclusion, this essay has illustrated the way firms can attain a competitive advantage in their supply chains through quality, speed, cost, flexibility, and dependability. However, it is not enough for firms to have competitive supply chains as supply chains strategies need to be aligned with business strategy. The essay has provided examples of businesses that have made significant losses as a result of misalignment of supply chain strategy. The essay has also provided examples of firms that thrive as a result of matching their supply chain strategies to the overall business strategy. The key takeaway is that supply chain management practitioners need to consider overall business strategy when making decisions on supply chain strategies. This will allow the business to have a competitive advantage and better chances of success in a globalized environment that is increasingly competitive. References Leeman, J.J., 2015. Export Planning: A 10-step approach. BoD–Books on Demand. Lyons, A.C., & Ma’aram, A., 2014. An examination of multi-tier supply chain strategy alignment in the food industry. International Journal of Production Research, vol. 52, no. 7, pp. 1911-1925. Mitra, A., & Bhardwaj, S., 2010. Alignment of Supply Chain Strategy with Business Strategy. IUP Journal of Supply Chain Management, vol. 7, no.3, pp. 49-65. Morita, M., Machuca, J.A.D., Flynn, E.J., De Los Rios, J.L.P., 2015. Aligning product characteristics and the supply chain process – A normative perspective. International Journal of Production Economics, vol. 161, pp. 228-241. Ogulin, R., 2014. Supply chain alignment: A Thematic Bibliography. Journal of New Business ideas and trends, vol. 11, no. 1, pp. 36-75.  Vachon, S., Halley, A., & Beaulieu, M., 2009. Aligning competitive priorities in the supply chain: the role of interactions with suppliers. International Journal of Operations & Production Management, vol. 29, no. 4, pp. 323-340.  Read More