Supply Chain Management Approach - Assignment Example

Supply Chain Management Supply chain management is all the activities that are undertaken in order to fulfill demands. These activities entail the flow and the transformation from raw material stage to eventual stages where the end user receives a finished product. There are four levels to a supply chain they include; networks of supply, distribution systems, internal supply chains and the eventual recipients of the products. The process encompasses the movement of funds, information, services and materials (Wisner 56). Supply chain management includes a series of well-coordinated decisions and activities that are used to provide sufficient integrated supplier services, transporters, ware houses and customer. This often ensures that the correct products and services are taken to delivered at the right locations in the right quantities while minimizing the cost of undertaking these activities. The essence of this is to acquire sustainable competitive market advantage. A company supply chain can be immensely complicated because it entails a large number of customers and suppliers. Logistic functions may be used to help the flow of raw material from the producer of the item, to the manufacturer then the distributor and finally the end user of the product(Wisner 104). The internal supply chain involves the manufacturers. In this case, it entails sourcing, distributing and production as a whole. Sourcing is where the company makes some purchases, process orders, make negotiations for contracts and formulate the purchase process. In production, the raw materials are transformed into components of an end product or the product itself. Distribution is where the flow of material or end product is managed as from the manufacture to the customers. To ensure that the process is done successfully, enterprise resource planning systems should be used. The enterprise resource planning system usually store and processes the data of the company. In addition, it integrates the company’s information system as a whole. ERP is beneficial as it facilitates the flow of all the details in the company and also ensures that the daily company processes are managed appropriately (Wisner222). The supplier networks are also another key component of the supply chain. They may be the organizations responsible for all the direct and indirect service and product provision. For instance, a computer manufacture supplier may include all the organizations responsible for the provision of all items of the computer. This may include computer chips, motherboards and hard drives just to mention a few. The distribution networks the real movement of goods from the manufacture to the customers. The main focus is on the packaging, storing and how the materials are handled at the receiving ends; the warehouses, docks and the retail stores. One crucial consideration in the distribution process is the mode of transportation and its management. This includes how the external carriers have been managed or how the private carriers are selected. Another important thing to consider is the e - commerce sector. This plays a vital role as it facilitates the flow of funds and information. E commerce is when advanced technology is used to carry out the business transactions in a company. E commerce is conducted in a variety of electronic media. It entails business to customer transactions, business to business transactions, and customer to customer transactions. A few websites that carry out such include e-bay, Covisint, priceline.com and the likes of Amazon.com. The types of electronic media are bar codes, fax, electronic fund transfer (EFT), electronic data interchange (EDI) and many others (Wisner 10). In e- distribution, one is advised on where to pick their supplies and how to use them via the internet or web based environment. E- Procurement has changed the whole supply chain where the distribution and manufacturing bit is concerned. There is a seamless flow of information on fulfillment from the manufacturer to the supplier now. The roles that supply chain managements plays are to produce product that suit the customer’s needs. The main objective of the supply chain management procedures is to be ensured efficacy and cost effective joint efforts throughout the system. Supply chain management scope mainly encompasses all the company’s activities in a more strategic level; making sure that the tactical and operational levels are put into consideration so that there is efficient integration of manufacturers, suppliers, wholesalers, retailers and of course the end users of the products. There are various supply chain models that ensure a company can maximize on its general value other than just the profit. The first is the competitive priorities and manufacturing strategies. This model focuses mainly on the supply chain members. Any firm’s competitive priorities are determined by these four long term structural decisions; capacity, facility, vertical integration and technology. Alongside these, are infrastructural decisions which include the quality, work force, production planning and regulation and lastly the organization. The impact of infrastructural decisions on a firm is paramount as they are vital in the firm’s long term structural decisions. Manufacturing focuses on certain priorities which include flexibility, quality, time, cost and the introduction of a new product in the market. This is classified into five categories they are; engineer to order, make- to- order, make- to- stock, assemble- to- order and build- to- order(Wisner 88). These strategies are usually out to counter competitive market. Make to stock entails holding certain products in inventory and ready to deliver this minimizes the number of times deliveries are made. In this type of strategy, demand of the products is forecasted before the actual demand is there. Assemble to order is a strategy that is used to ensure that numerous end items are well handled. Usually the strategy uses standard components and parts that way ensuring low cost production in the assembly stage or the configuration stage. That way the customers’ needs are satisfied (Wisner 72). Build to order is the manufacturing strategy that produces customized end items in small amounts only after the manufacturer has received an order from the customer. Most build- to- order products require high competence in production, highest quality designs and of course management in the time of delivery of product. They are slightly different from the engineer to order products which are also as per customer requirement but require a lot more unique customization of the product. The time taken in production is usually extremely long since the product is unique. Efficient supply chain and responsive supply chain is another model in supply chain management. It is necessary to note why many supply chains tend to fail. One of the reasons why they fail is because of the lack of understanding of the nature of demand by the customers in the market. This misunderstanding sometimes leads to mismatched supply chain being used in some companies or firms. The responsive supply chain reacts quickly to the market demands. It speeds up the rate of delivery, development and flexibility in volumes of good produced. On the other hand, efficient supply chain plays an important role when it comes to coordination of material flow and services in order to minimize inventory and increase the workability of manufacturers and other service providers that are involved in the chain. This kind of model is most suited for the markets that have very predictable demands and fewer instances of forecasting errors (Wisner 90). The clock speed of product, process and organization of life cycles is another model. That essentially states that each industry evolves at its own pace depending on the products clock speed, its organization clock speed and also the process clock speed. A good example of a fast clock speed industry is the movies industry. In a case where one wants to get the greatest number of viewers for a movie, it is during holiday times for example Christmas. That way the owner of the movie will attain greater profit basing his success on the time the movie premiered. Then there are the slow clock speed industries. An example of this is an aircraft company. It may only achieve greater profit as time flows by. Understanding the requirements in a chain supply may ease the pressure of knowing what the demands in the industry (Wisner 54). Push and pull model is another model that also plays an important role in supply chain management. All the processes in a supply chain management are categorized under the pull or push processes. In pull, the end product or item is triggered by the demands of the customer. In push, the production of an item is mainly due to forecasting the demand by the customer in the market or by order from the customer. It usually takes a longer time in production due to ensuring perfection of the product that has been ordered by the customer. For both instances, the varying demands from customers are handled differently. In pull, a flexible system is required to meet the customer varying demands. While in push process, excess stock is put in place to ensure that in case there is an order there will be no deficiency. There are various challenges that can be encountered in supply chain management. They include; the integration of a supply chain is very difficult because it may need cohesive decisions that are supposed to increase profit or value for the firm. There are instances of conflicting objectives because of the use of different facilities in the supply chain. An example of this is when customers schedule different times for delivery of supplies. The dynamics behind supply chain management are very difficult. This may hinder strategic collaboration. Inventory control is also another challenge in the market. It is important to know the effect of an inventory to the overall performance of the system and why it is essential for a supply chain member to hold an inventory. Developing efficient supply chains and managing them well will ensure that a cost effective goal is achieved and the deliveries to the customers is done at the right time, in the right place and in right quantities that will satisfy the needs of the customer. Works cited Wisner, J.D., Tan, K-C., and Leong, G.K. (2012). Supply Chain Management a balanced approach. CENCAGE Learning. Read More