Drivers influencing changes to the supply chain management - Essay Example

Nevertheless despite such investments, challenges abound. It is therefore a process that requires continuous improvement anchored in the core philosophy of an organization. Introduction In order to gain a competitive advantage in the international supply chain process, it is imperative to match the various value adding activities in the chain with the comparative advantages realized in the different sectors that make up the entire chain. Indeed, supply chain management has become an important determinant of the success of any industry and business.

In this regard, companies across the world are seeking the best ways to enhance the efficiency and performance of their supply chains. In this regard, supply chain managers are increasingly facing challenges involved in the three areas of supply chain process: procurement, processing and distribution. Managing supply chains in the present world is certainly a fluid process. While globalization increases the opportunities for businesses across the world it also increases the risks involved. In this regard, any company operating beyond one border must understand the critical need to effectively manage its supply chain process.

Supply chain management is no longer conducted behind the scenes. . in electronic invoicing, automated notifications, computerized shipping ad tracking in addition to a wide range of new applications which are intended to enhance efficiency in the supply chains. The focus of all these changes is always to cut down costs and streamline the expenses realized by companies. In addition, the management philosophy employed within an organization largely determines the success of its SCM. It is important for the leadership to regard supply chain as a competitive advantage.

The leadership should have a clear understanding of the capacity and strengths of the supply chain and how it affects growth, customer service and profitability of the organization (Neef, 2004). Other organizations usually consider the option of outsourcing their supply chain management in order to create efficiency. In this regard, the management philosophy of an organization with respect to its supply chains greatly determines the success of the process (Fredendall & Hill, 2001). Globalization and Supply Chain Management In the past few decades, the growth of the global economy and the global marketplace has influenced both consumers and industries alike.

Through globalization, the business environment has become more competitive and connected. As such both opportunities and threats have increased. The hitherto existing barrier of distance has been eliminated through new technology and more efficient communication channels. Today, there is a greater networking across organizations mostly driven by the efficient transportation and logistics realized today (Ayers, 2007). Businesses operating in such a global economy have many options on how and where they can produce their products, which markets to sell to and how to interact and communicate to their suppliers and