Integrated Supply Chain Management - Coursework Example

? Integrated Supply Chain Management Introduction Supply chain and supply chain management plays an integral role in the efficiency of any corporate or organization that is involved in the procuring goods in its raw form and passing it on to an end customer as a finished product or good. Research and practice shows that connecting and informing on supply chain, its management and the distribution of characteristics that dictate management of corporate organizations have greatly contributed to the integration of supply chain and its management. Due to the liberalization and the globalization of international trade, the sourcing of production factors and the obtaining of consumers across boundaries has made it possible to have international supply chains (Mentzer 2004). The effectiveness of these barriers has made it possible to have a serious but favorable competition in the international market arena that can be attributed to the abolition of the trade barriers that previously made it impossible for trade to be easily carried out. This distribution of the competitiveness in the physical exchange with the rest of the world is important for economic growth and development of both nations and corporate that are actively involved in the supply chain management. A supply chain is loosely defined as a structured process of manufacturing whereby raw materials are changed into finished products before being delivered to customers. What is in agreement from the meaning of a supply chain is that it starts with raw materials and combines a number of value adding activities that end with the transfer of the finished products to the customer at the end of the chain. Due to the fact that the satisfaction of the needs and wants of the customer are crucial in the success of every supply chain and its management, effective management of the process that links each and every chains becomes vital. Additionally, the uncertainties in the market make the supply chains not to be flexible in trade situations that require that there is effective management of the supply chain. Supply Chain Management Supply chain management is aimed at examining and managing the supply chain networks in order to save costs and provides better services for the customers as well as improving the corporate competitiveness in the satisfaction of the needs of the customer (Langley et al 2008). Therefore, supply chain can be defined as a chain of facilities and distribution alternatives that carries out the functions of obtaining goods, changing the goods into finished products and the distributing them to the market. Supply chain management entails organizing a network of numerous processes and activities that create value in the form of goods and services that are passed on from the original raw form into end products that are passed on to the end customer. It also involves the integration of key processes in any business from the end user through the suppliers that provide the goods and services and information that may be used in value addition to the product as well as the designing and management of all the activities that are relevant in the coming up with an end product (Handfield and Nichols 2002). In summary, supply chain management is aimed at increasing the value contribution to the end customer while concurrently reducing the costs of the product through offering it at the right place at the right time. According to Simchi-Levi, Kaminsky and Simchi-Levi (2003), supply chain management refers to the set of methods used for proper and efficient coordination of suppliers, producers, depots, and stores to enable the production and distribution of the commodities at the correct quantities, at the right locations and the right time. The main aim of this is to decrease costs while filling service requirements of both the supplier and the end customer, and this means that the supply chain must be organized to be both fast and trust worthy to the customers as well as cost effective to meet the requirements of the customers. From the foregoing agreement, it can be said that the primary objective of supply chain management is to reduce the total costs that may be done in a number of ways for example the reduction of the inventory costs. This means that firms or corporate must integrate a number of areas involved in the supply chain such as purchasing, manufacturing, warehousing amongst other factors. These can only be achieved by overcoming certain objectives that may be conflicting with those of the supplier, which are the objectives or aims of the end customer. Suppliers usually want the manufacturers to commit to buy large quantities of suppliers over a definite period of time but at times the manufacturers also need to experience some form of flexibility depending on the demand of end products. On the other hand, the demands of the customers might be lower than anticipated while at the same time the manufacturer wants to return inventory or that the objectives of the supplier may be in direct conflict with the desires of the manufacturer. All these objectives must be met and these can only be achieved through integration in that there is need to reduce the total costs and increase the service levels which in most cases may lead to an increase in the inventory or transportation costs. By integrating the supply, manufacturing and logistics activities through the strategic optimization of the performance of each, the overall costs incurred in the supply chain can be reduced. This is the reason why several companies are involved in partnerships as well as strategic alliances with the suppliers and the customers in order to allow supply chain patterns that will effectively deal with the conflicting objectives that efficiently integrates the supply chain. Integration of the supply chain is important as it enables the managers to define and understand the processes in the chain in order for them to make improvements whenever necessary. Information technology and supply chain management As evident from the definition of supply chain management, the faster and easy flow of information is important for the proper functioning of the chain in that providing information at the right time to the right place makes the supply chain move efficiently. Therefore, information technology which enables the proper flow of information within the organization and along the supply chain can come a long way in ensuring the success of the supply chain. To provide or offer an effective support to the supply chain in order to make it function properly, information technology can be used to link the parties that are the supplier and the end customer to function as a cohesive unit (Wisner, Leong and Tan 2004). This situation highlights the importance of information technology in integrating the operations of the business both internally and externally for the sharing of information and its coordination. The use of information technology also reduces the costs of the supply chain in terms of management as well as improving the services offered to the customer. According to Simchi-Levi et al (2008), the main objectives in information technology in supply chain management are to provide the information availability and visibility, enable a single point of contact information and allow decisions based on total supply chain information. This implies that the most typical role of information technology in the supply chain management is to reduce the friction between the suppliers and the customers through an easy flow of information to the end users of the supplied product or the service along the supply chain (Cross 2000). Therefore, information technology is viewed as having an active role in the support of the collaboration and coordination of the entire supply chain through the sharing of information. Information technology also changes the industry structures and the rules of the competition thus creating a competitive advantage that creates new businesses and opportunities. The companies can also create strategic advantages through the enabling of a centralized strategic planning that dictates the day to day operation of a company or a corporate. Levary (2000) also suggests that information technology when applied in supply chain management reduces the cycle time, reduces the inventories, minimizes the bullwhip effect and thereby improves the effectiveness of the channels used for distribution. The adoption of information technology has enhanced the efficiency of supply chain management in that it has made it easier to streamline logistics flows, reduction of inventories and improvement of the services offered to customers. However, in order to receive these strategic benefits of information technology is supply chain management, it must be accompanied with product redesign or changed. Information technology has therefore been used by companies or corporate to increase their possibilities of networks with the partners in the entire supply chain. Currently information technology plays a key role in the supply chain management in that some of the processes in a supply chain may be supported through what is known as enterprise resource planning (ERPs) software. Considering the high costs involved in the implementation of supply chain management software, it is important that companies analyze and evaluate the use of information technology in having an efficient supply chain management. When used appropriately, the information technology through ERPs brings together accounting, manufacturing, distribution, and human resources departments into a seamless computing system that forms the basis of the supply chain management. Technology enables companies to collaborate for the mutual benefit of each of the companies, for example a company that supplies consumer goods can link up with one of its distributors through the internet. This will be helpful in the sense that when the goods supply is low, the company can easily order for more goods automatically and therefore the distributor never runs out of products that may end up disappointing the customers. Similarly, the technology may be in the sense that multiple requests can be made to vendors for the orders to satisfy the needs of the customers. While the benefits that are accrued from the adoption of information technology are numerous for those involved in the supply chain, there are some drawbacks. One of these drawbacks is the fact that there may be resistance from employees or the vendors. It is important to note that in most instances, the suppliers may resist in collaboration of the adoption of the information technology due to the initial costs involved in setting up a technology compliant supply chain management. The technology may also not be welcome to employees as some of them end up loosing their jobs due to the use of the technology. Iorder to succeed in the setting up and implementation of effective supply chain management through the use of information technology, the employees must be made to trust and believe in the system and its importance in ensuring efficiency. Conclusion Supply chains are important part in any trade but it should be noted that the supply chain in itself is not sufficient. For a supply chain to be proficient, one must appreciate the crucial purposes and the part played by each function in the chain. In order to accomplish this, one must identify the obstacles and what needs to be improved. Information technology by far plays the greatest role that holds the supply chain together in that web-based technologies have a significant impact on the strategies that are employed in the supply chain when it comes to coordination, the web provides a free platform that encourages transparency, eliminates delays in the passing of information and reduces the costs of the transactions. One should note that despite the fact that information flow rate has greatly been enhanced, the flow of materials from their point of inception to be finished products has not grown in speed. This has made it important that the material and information flow is made more effective in order to succeed in the entire supply chain. However, the benefits of information technology in supply chain management are still numerous and may vary depending on the context on how they are presented especially due to the fact that IT is related to the process changes and the benefits may overlap or be interlinked. The strategic benefits can only be achieved through the introduction of information technology plus the redesigning of products as well as business process re-engineering skills that will be vital in maximizing the benefits of technology to supply chain management. References Cross, G.J. (2000), “How e-business is transforming supply chain management”, The Journal of Business Strategy, 21(2), pp. 36-39 Handfield, R. B., & Nichols, E. L. (2002). Supply chain redesign: Transforming supply chains into integrated value systems. Upper Saddle River, NJ: Financial Times Prentice Hall. Langley, C., Coyle, J., Gibson, B., Novack, R., & Bardi, E. (2008). Managing Supply Chains: A Logistics Approach. Canada: South-Western Cengage Learning. Levary, R.R. (2000), “Better Supply Chains Through Information Technology”, Industrial Management, 42(3), pp. 24-30 Mentzer, J. T. (2004). Fundamentals of supply chain management: Twelve drivers of competitive advantage. Thousand Oaks, Calif: Sage Publications. Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies. International Edition: McGraw-Hill. Wisner, J. D., Leong, G. K., & Tan, K.-C. (2004). Principles of supply chain management: A balanced approach. Mason, OH: South-Western. Read More