Supply Chain Management - Essay Example

?Supply Chain Management Introduction A basic collective definition of supply chain are thrice some time more accordingly, these are the firm’s dual equipped transitional informing, capital, assistance for providing goods, and commodity availability destination of consume. (Mentzer et al., 2001). In simpler words a supply chain is the cooperation among companies or organizations in order to improve the cumulative as well as individual performances. A supply chain is a basic element of the growth or manufacturing period. So far both could not work without it. Recent development in this era of new business strategies that must minimize risk in business by using friendly environment machinery , social acknowledgement as requirement of the Government to smooth and sequential running of a business operation . (Amlan M., Helen M., 2010). Supply chain could improve the cash transaction, manufacturing cost of materials, and communication flaws by planning of company’s coordination to correlate finance, society that helps to end user and stake holders. (Craig C., Dale R., Nov 2007) ( Seuring & Muller, 2008) (Lutz P., 2009). Supply chain management is a core element of any manufacturing phenomena that engage in producing of commodities or preparing unfurnished materials. (Anna N., Ladimer S., 2010 ). A satisfaction of society is always the responsibility of the supply chain management (Laura S., Michael B., 2009). Over the passage of time, the industrial progress has triggered a process of adaptability and innovation in all the things related to industrial manufacturing, services and even the consumers. A new term has been coined recently i.e. corporate responsibility, it represents and incorporates social, financial, ethical and even ecological challenges which are faced by corporations that are trying to adopt sustainability factors in their supply chains. Following are the key features of a sustainable supply chain. Wastage: disposal of waste materials is the key responsibility of a supply chain management to satisfy the society by assuring the recycling or safe disposal of non toxic element that can be harmful to human beings. Energy resources: Managing and ensuring the availability of energy must require the keen observation as a basic factor of supply chain management. Water management: usage of water in every part of a business is necessary to control its wastage on priorities bases. Globally a short fall in water resources is the burning issue or current scenario is the big threat for supply chain management. Shipment: a prompt and in-time shipment or transportation is required for a growing and developing business faculty by using time management, supply chain management. Means of access: Availability of a right product in right time on right place is the responsibility of supply chain management by using of all tools of intra and intercommunications however; it will improve the optimum quality of work. Training sessions: Skill developing of workers is the necessity/requirement of an organization for long last their employees by awareness of recent era development in every field. This is the main development program should under supply chain management. Competitive Forces Model of an organization. When entering a market, every new entrepreneur faces some problems that are common to all kinds of markets as well as all types of products, though the details and intensities can vary from scenario to scenario. A standard model was generated that represents the common and most important issues faced by any manufacturer. It is called the competitive five forces model. A) Competitive Market: Entering a market is not an easy task as there are well established manufacturers in every market and launching a product against theirs will require marketing strategies that can rival and defeat those of the corporate giants. B) Alternative strength and Threat: This is the threat for manufacturer substitution probability but the feasibilities are limited for those companies which are scientifically sound and have large quantity of customers that convince-by-mouth gazette their friends and family to try out the new innovational devices. C) Price negotiation by purchaser. D) Suppliers price negotiation power. E) Rivalry among the existing players: Actually there is a strong rivalry between Toshiba and its competitors but Toshiba is a high profiled player in this arena. It has been around for quite long time and has continued to expand with time by introducing innovations in its products with a consistency that few could compatible. Contemporary rivals Every producer, marketer and service provider in each and every market has competitors, and they all strive to overcome competition by improving marketing strategies, product quality, lowering prices or in other words offering better deals in comparison to the other companies in the business. Apart from markets, competition can vary on the basis of locations too, for example: companies like Nokia, Motorola, Samsung and Apple will be competing in cell phones in third world countries where the consumers’ purchasing capabilities are limited but in countries like Japan and China, they will be competing in IPods and other such items. Customers There are three different types of consumers throughout the world that can be categorized as per need, want, and demand of the commodity that costs to customer according to their mind frame. 1. House hold Consumer: Domestic consumers are highest in magnitude but surprisingly they are not the ones that generate the highest income for producers. It is because domestic consumers purchase products in a limited quantity as per their needs, yet they serve as a great source of marketing as each and every domestic consumer is related to some kind of commercial consumer which in turn can generate a greater amount of capital for the manufacturer. 2. Commercial Customers: Ever since the boom in the in the industrial age, the market for manufacturers of all kinds of goods has kept on growing and it will continue to do so in the future, commercial consumers are the ones that generate the most significant amount of income for manufactures as they tend to mass purchase items. Office products are nowadays very necessary due to the modernization in business the environment for example Telecommunication devices, Copiers, printers, LCD, Laptop computers, Scanner and Fax machine. 3. Corporate clients: Apart from consumers there are a third type of customers which are actually service providers and need consumer items in the course of their work these corporate clients are the most profitable ones by far when compared to other both in terms marketing as well as income. A value chain of an organization A value chain categorically generics the value adding activities of an organization. There are two basic type of these activities Production inbound logistics, sales, marketing services outbound the primary and secondary activities and Research and Development, HRM, Administration, Procurement could be assigned as supportive activities. Supply chain management could globalize the business by effective communications, cooperation, coordination, partnership, collaboration, alliances and implacable inter and intra organizational communication and relation. Actually this could be possible to integrate the technologies, logistics, and partner correlating to each others. Companies could implement this successfully by preparing terms and condition deeds. Successful points are as under. A) Commitment of Manufacturers B) Skill enhancement in management. C) A permanent social coordination. D) Keep away of risk management. E) Strategic plan for a certain period. F) A strong supply chain management that give organizational confidence and control viability of it. G) Highly cash flow generating business. Supply chain management integration is very necessary for an organization which is business oriented by improving the coordination and combination of business with proper application of logistic strategy. (Marisa et al, 2008). Sustainability in Supply Chain Management System Several companies in the last decade have incorporated sustainability measures into their corporate culture. The sustainability not only reffers to satisfy the economic concerns, however, it also addresses concerns about the environmental issues. The global environmental challenges demands rapid measures from the corporate to work upon, and corporations have began the initiatives by adopting sustainability values in the supply network. The supply chain managers can play the most important role as compared to any one else in the organization to achieve social and environmental sustainability more thoroughly. For example Wall Mart is a very big importer of consumer items, textiles, sports good etc from south Asian and some north African companies. Their supplier assessment teams regularly keep an eye on the child labor issues, evacuation procedures in factories and many more. Though, the company has initiated processes for sustainable supply chain networks, however, there is still a lot of work that has to be done in this context .Current Scenario: Now the world has become a global village in the arena of this millennium of 2011 where each and every change in the world creates changes in business methodologies that is the reason every organization updates their information on and according to current affairs like wise the situation of middle east and Africa’s war fare increases the price of petroleum, Japanese earthquake, tsunami decreases the export capabilities of Japan as well reducig the stock exchange index over the world. Earlier the cold war also made effects on the businesses. The Afghan and Iraq wars have also cast adverse effects on the economies of the 32 countries of the world which are directly or indirectly participating. Uncountable supply chain breakage faced by NATO force in above mentioned countries that horrifying and threat to supply chain management. If an organization involve in production of goods the hiking of price of petroleum causes the effect on the production cost, labor charges, and cost of petroleum by products, carrying charges. Whenever a country engages in war they face the shortage of labor due to casualties and foreign or overseas employment are not making to and fro as frequently as before. These are the examples of obstacles and barriers for supply chain management could bear for any globally changes either natural disaster or human created. These are the challenges for them at cost. Current Challenges: Today in supply chain networks conventional problems are being considered by all the companies, however, the uncertain hazards are the real challenges in today’s rapid manufacturing industry. Until unless you don’t identify the problem you would be unable to think about its remedy. This happened in case of tsunami and earthquake in Japan which caused all together 300 $billion overall infrastructure damage cost just in Japan. However, in the mean time how many companies were effected from the break of their supply line is very difficult to calculate the overall loss. The experts reported in late March, right after the earthquake in Japan, that Apple may loose 20 $ billion and may delay its new iPhone launch. However, the world leading manufacturer the Apple corporation which also stood no 1 for their best supply-Chain practice in recent years, have ample parts in their stores till June, but after June they had to bare the delay cost during manufacturing of new iPhone. Japan have 5 major equipment supplies to the Apple system including batteries, touch screen etc. Similarly, the Toyota corporation stopped their new booking in some south east Asian countries due the ample supply of equipments from Japan which causes per day loss to the big automobile giant. There would be many other companies that suffered from this occasion who rely only on the Japanese manufacturers especially in semiconductors etc. Furthermore, in this competitive economy situation its really getting hard to keep alternative supply line in backup, not only to reduce the breakdown time, however to have a better negotiation. With the strong business development of supplier-to-customer BTC (Business to customer portals), its hard to trace the root supplier. Therefore involvement of dummy supplier increased the overall cost and difficult for customer to negotiate properly. Solution to above mentioned challenges: There are several recent solutions proposed for such challenges. Borgatti suggests (Borgatti, & Li, 2009) that company should work upon the 'supply chain network' in context of social network analysis and study it in more depth. The alternates should not only be managed at supplier level, however, supplier of supplier and more in depth has to be observed and in this network there must be alternatives available at every stage of the supply line. The same methodology i.e. maintaining the detailed supplier network with depth knowledge (who is friend of whom etc) will also be helpful for better negotiation. For example, if some suppliers would have some kind of social relationships then it will be difficult for the customer to negotiate with such suppliers (because of rapid spread of information among them), in contrast to this, supplier in isolation would be a better choice to be negotiated. Reference I. Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G.(2001). Defining supply chain management. Journal of Business Logistics, 22(2), 1-25. II. Seuring, S. & Muller, M. (2008). From a literature review to a conceptual framework for sustainable supply chain management. Journal of Cleaner Production, 16(15), 1699-1710. III. Anna N., Ladimer S. N. Sustainable Supply Chain Network Design: A Multi-criteria Perspective. ALIO-INFORMS Joint International Conference Buenos Aires, Argentina June6-9,2010. IV. Amlan M., Helen M., (July 2010). An Integrative framework for studying sustainable practices and its adoption in the AEC industry: A case study. Journal of Engineering and Technology Management. V. Craig C., Dale R., (Nov 2007). A framework of sustainable supply chain management: moving toward new theory. International Journal of Physical Distribution & Logistics Management vol 38 No 5, pp 360-387. VI. Laura S., Michael B., (2009). The evolution from corporate social responsibility to supply chain responsibility: the case of Waitrose. Supply Chain Management: An International Journal vol 14. No 4, pp 291-302. VII. Lutz P. (2009). Addressing sustainable development through public procurement: the case of local government. Supply Chain Management: An International Journal vol 14. No 3, pp 213-223. VIII. Anna H. (2008). Greening Healthcare: 21st Century and Beyond. Greening Healthcare: 21st Century and Beyond, Frontiers of Health Services Management; Fall 2008: 25, 1; ABI/INFORM Global pg 37-43. IX. Chen L., Shu C., Ling T. (2010). Selecting the Most Feasible Strategy for Green Supply-Chain Management. The Business Review, Cambridge vol 14 No. 2 pp 141-146. X. Marisa et al. (2008). Towards a sustainable fashion retail supply chain in Europe: Organization and Performance. Int. J. Production Economics vol 114 pp 534-553. XI. Borgatti S. , Li, X. (2009) On Social Network Analysis in a Supply Chain Context. Journal of Supply Chain Management vol 45 No 2 pp 5-22 Read More