The Principle of Supply Chain Alignment - Essay Example

Supply Chain Alignment Name: Course: Institution: Date: Supply Chain Alignment Introduction Supply chain management comprises a network of facilities charged with the responsbility of the production of raw materials the transformation of these products into intermediate goods and then into finished products. The products are then delivers to the respective customers through a defined distribution channel. Supply chain management therefore spans procurement, manufacturing, and distribution (Lambert 2008, p. 21). Supply chain management ensures the optimization of the performance of the chain with the objective of adding value at a minimal cost. The main objective of this essay is to discuss the role of the principle of supply chain alignment in improving the competitive nature of a firm. This will be through an analysis of the competitive priorities such as cost, speed, flexibility, dependability, and quality. Principle of supply chain alignment The principle of supply chain alignment perceives supply chain management as a methodical and tactical coordination of traditional business functions within a specific firm and across other business enterprises that define the supply chain with the objective of improving the long term performance of an individual company and that of the entire supply chain (Mitra, A & Bhardwaj 2010, p. 51). For companies to achieve the goals of satisfying customer needs and ensuring the maximization of profits are is need to align the activities of all the members of the supply chain. These include the manufacturer, retailer, and the customer. Effective coordination among all these members of the supply chain can enhance the ability of the company to ensure high-level competition considering that it will provide a platform for coordination and development of effective strategies (Zhang et al 2014, p. 1143). In supply chain management, competitive strategies allow companies to engage in the creation of defensible positions over their competitors. This comprises of the capability of allowing a company to distinguish itself from its competitors. Companies must engage in a process of assessing their competitive priorities of cost, quality, flexibility, speed and dependability and aligning them with the prevailing conditions in the supply chain (Mitra, A & Bhardwaj 2010, p. 56). Quality In supply chain management, the ability of different players to realize a competitive advantage is based on the quality of the products and services they offer. The quality of a product or service can be defined by its nature relative to the expectations of the customers (Vachon et al 2009, p. 326). Chipotle Mexican Grill is an example of a company that uses quality as an essential element in ensuring competition within the supply chain. For Chipotle, farmers supplying the company with raw food products are expected to engage in natural agricultural processes that ensure that their products are healthy and in accordance with the standards of Chipotle (Mangan et al 2011, p. 29). Speed Supply chain management is defriend by the process of acquiring and transforming raw materials into finished products win accordance with customer needs. The time taken to respond to the needs of the customers defines the lives of customer experience and satisfaction. For companies within the supply chain to satisfy the needs of the customers it is important to ensure that the speed with which a product is delivered from the time it is ordered (Mangan et al 2011, p. 15). When speed is used as competitive priority, it increases brand loyalty and the possibility that more customers will return with more business. Speed in supply chain management can also be used as a cost reductions strategy. When companies engage customers in quick and efficient services, they reduce the turnaround time hence increasing utilization of resources, which may translate to increased sales. Low speed in delivery and in servicing customers increases the possibility that products will be damaged or get lost. This may affect the ability of the customers to trust the business to ensure effective delivery and eventual satisfaction of their needs (Mangan et al 2011, p. 16). Dependability Dependability signifies the level of commitment of a company towards timely operations. A dependable company is one that has the ability of generation products and services in time to meet the demand of the customers. The level of trust that customers and other members of the supply chain have towards a company will determine its level of dependability (Gattorna 2009, p. 14). Dependability with regard to supply chain management can be perceived as the expected period within which customers can acquire their target product and the ability of a company to ensure that the products are delivered within that period. According to the principle of supply chain alignment, a highly dependable company will ensure that it reduces its cost of operation. This is because highly dependable companies save time, money and provide themselves with some level of stability, which can be essential in improving on its efficiency (Mangan et al 2011, p. 56). Flexibility This is the ability of different players in the supply chain to adapt and modify the production process according to the prevailing business circumstances. A highly flexible company engages in immediate and clear response to the dynamic environment by changing products and the production process to meet the existing demand (Gattorna 2009, p. 22) Cost For every company in a supply chain the main objective is often the development of strategies aimed at lowering the cost of production. Through lower cost its will be easier for a company to reduce the prices of its high quality products hence attracting more customers. Access to cheaper labor is an example of a supply chain management strategy, which automatically reduces the cost of production, and this translates to cheaper products for the customers (Vachon et al 2009, p. 329). Through proper management of the supply chain, high quality, high dependability levels, and high speed in the delivery of customer expectation do not only necessitate the external reward of improving the relationship between different players in supply chain but also ensure the reduction of the operation cost (Coyle & Coyle 2009). Conclusion For every company in a supply chain the main objective is often the development of strategies aimed at lowering the cost of production. When companies engage customers in quick and efficient services, they reduce the turnaround time hence increasing utilization of resources, which may translate to increased sales. Through proper management of the supply chain, high quality, high dependability levels, and high speed in the delivery of customer expectation do not only necessitate the external reward of improving the relationship between different players in supply chain but also ensure the reduction of the operation cost. References Coyle, John J., and John J. Coyle. 2009. Supply chain management: a logistics perspective. Mason, OH: South-Western Cengage Learning. Gattorna, John. 2009. Dynamic supply chain alignment a new business model for peak performance in enterprise supply chains across all geographies. Farnham, UK: Gower Lambert, Douglas M. 2008. Supply chain management: processes, partnerships, performance. Sarasota, Fla: Supply Chain Management Institute. Mangan, John, Chandra Lalwani, and Tim Butcher. 2011. Global logistics and supply chain management. Chichester, England: John Wiley & Sons. 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. 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. Zhang, C, Gunasekara, A & Yu, WCW 2015, ‘A comprehensive model for supply chain integration", Benchmarking: An International Journal, vol. 22, no. 6 pp. 1141-1157. Read More