Supply Chain Management and Technology - Essay Example

Supply Chain Management and Technology and Section # of Supply Chain Management Supply chain management is the management of a network of all the business processes in the organization. This firstly involves inter relating and centralizing all the business functions within the organization and then ensuring smooth flow of the product from one function to another. The ultimate objective of the supply chain is to spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Supply chain basically ensures that the customer is getting all what is desired and according to the requirements (New, 1997). Today with the down fall in economy and the increase in the costs the companies are planning to have a strong and an effective supply chain in their bottom line. The reason is that the implementation of a strong supply chain at the bottom will ensure that the cost is decreased along the production line and the management is effective. However these decreases in the costs and effective management will ensure that the efficiency of the firm gets increases and the profitability and the return on the investment increases. Ensuring a Successful Supply Chain This increased efficiency today is achieved by implementing new technology within the organization. Today in the 21st century the technology is advancing at a very rapid pace. Implementation of Enterprise resource planning in an organization works best in conjunction with a supply chain management system. ERP systems involve a multitude of business activities, including customer service and production planning that are not a part of supply chains (de Burca, Fynes, & Marshall, 2005). The success of supply chain management system lies in the hands of the technology. It can be only successful with the implementation of web- based software and through proper communication. Before the internet the supply chain could not function appropriately the reason is that the collaboration with the other firms was less efficient. The process of feed backs, updates and other important business functions used to take a lot of time. The process of transferring knowledge was all done manually which took time. Collaboration with global partners used to be a challenge for the organizations. But with the introduction of internet and new communication technologies that include email, fax etc. the communication and knowledge and information transfer issue was completely resolved. One of the biggest advantages that the technology has offered to supply chain is the ease of collaboration no matter how distant the customer, the supplier or any other organization is. This helped in developing good relationships at both ends of the supply chain which includes the customers as well as the suppliers. The companies can now also remain updated with their competitors’ activities. For example a supplier of consumer goods may be linked up through internet to one of the distributors. In this way whenever the inventory goes down the order will be placed automatically. in this way, the distributor never has to worry about running out of a product and disappointing customers and the supplier doesnt have to worry about maintaining a large inventory in expectation of demand. Systems have also been made to send out multiple requests at a single time. Collaborating this way makes better use of existing resources and paves the way for a larger profit margin on all sides of the equation (Chow, 2006).  The Importance of Technology Technology today has made both outsourcing and off shoring much easier tasks than they were initially. In a very strong supply chain and a very elaborative business it is sometimes considered good to outsource certain business functions. This helps in saving upon a lot of costs at times. Technology today like internet and some systems have made the task of outsourcing much easier. For outsourcing a task to some other organization requires constant and thorough communication with that organization. This task has been done by the internet which now helps all the organizations to collaborate with each other very easily. The other problem wit outsourcing is to get constant updates from the organization and continuous meetings. Today this is much easier than it was in the past. This is because of the technologies which include video conferencing (Boubekri, 2001). Especially when the organization is developing a new product, it prefers to outsource some of the tasks, the tasks that add more costs than benefit to the organization. These include tasks like packaging etc. Off shoring is a similar concept as outsourcing which has typically benefited from the inception and advancements of new technology. Off shoring describes the relocation by a company of a business process from one country to another -- typically an operational process, such as manufacturing, or supporting processes, such as accounting. This is important when the company is developing a new product. The logic behind this activity is to reduce the cost. However with the technology makes it mush easier. With the use of internet the companies can easily research about which organization is best in what function. In the development of the product, tasks that can be off shored may include tasks like the ingredient selection and even the supplier of the raw materials can belong from some other country. Off shoring of any task was not practiced much before, but with the advancements in the technology the life is much easier and it is much easier to communicate thus to save on costs and add value to the products the organizations now also off shore the tasks (Kuei, Madu, Lin, & Chow, 2002). The customers today are very demanding and finicky. The demand for innovation of the product today is driven by the customers and not by the companies itself. The companies are today are under great pressure to read the changing demands of the customers and keeping them satisfied with the products. In such a scenario the role of the supply chain managers’ changes. Supply chain managers already collaborate with other corporate functions, of course, but creating a supply chain that successfully supports demand-driven innovation requires an expansion of that collaborative role. The supply chain executive must help facilitate and guide innovation and become a true partner in marketing efforts. The supply chain must be able to see clearly into the processes of salespeople, marketers, and designers—even downstream partners and product service’s—and collaborate with them constantly. The main thing during the process of innovation is to communicate properly at both ends of the supply chain which includes the customers and the suppliers. Proper communication with the customers will enable the personnel to know the exact demand of the customers and thus will help in developing and innovating correctly. Research and development is very important in innovation of the product. Proper surveys and trend analysis should be done before introducing any change in the product. The survey also depends upon the data that is generated by the sales people and the marketing staff, this data basically predicts the customer preferences and thus the supply chain can accommodate to any change. Product-development experts can provide the supply chain manager with a window on whats in the pipeline so that a sourcing strategy can be sketched out in the early stages. Innovation can be expensive, and customers dont like to pay for it, even when it comes about as the result of their own direct input. So its often up to the supply chain manager to find raw materials and other needed resources at prices that will allow the innovative product to be profitable (Boubekri, 2001). Global competition and increasing demand of the customers are making it difficult for the organizations to create innovative products. However the capability of innovation within an organization can be developed through the application of e- commerce, sustainable development-orientation, and new product development in order to gain competitive advantage. This all comes with the use and adaptation of technology within the organization. E- Commerce itself is a form of knowledge sharing, selling and buying of the products online. Thus any organization in order to be competitive and innovative should use and adapt to the technology. The Chopra and Meindl’s strategic fit is that there should be a fit between the corporate and the functional strategy. The functional and the business processes should define their functions such that they support the over all corporate mission in a synergistic manner (Winch, 2003). It also includes that collectively all the strategies seek to exploit the opportunities and strengths, neutralize the threats and address the weaknesses. This strategy also identifies the drivers and obstacles of supply chain performance. The key drivers identified are inventory, transportation, facilities, and information. The development of the new product in the organization should fit the corporate as well as the functional strategy. This means that the basic idea of the product should align with the mission and vision of the company. The performance of all the business functions needs to be effective. The key drivers for the supply chain include firstly the inventory. For the development of the product the raw materials should be readily available. Secondly the transportation of these raw materials as well as the finished goods is also very important. The product should be provided with all the required facilities. These facilities depend upon the type of the product. Implementation of new technology is also very important in the development of the product. The fourth driver of the supply chain includes the information. The personnel and the staff must have enough information about the product that they are developing so as to communicate the benefits correctly to the customers (de Burca, Fynes, & Marshall, 2005). Conclusion The development of the new product is strategically important for the supply chain of the organization of the purpose of the development of the product will be aligned with the functional strategy of the supply chain itself. Other important point is that the product development will be a success when for the development for the product a proper supply chain will be developed, which involves all the key drivers. This includes the suppliers, the transportation and the required facilities. In brief it can be said that with the advancements in the technology and with new methods of knowledge sharing the companies and the businesses have advanced a lot and have taken a lot of advantage (Winch, 2003). Without the adaptation of all new technologies and methodologies the supply chain of any organization, which is involved in the development and the innovation of the product, cannot function. This means that the organization cannot increase its own profitability and cannot progress. Thus for an organization to be successful, it should have a strong supply chain at the base and should be flexible towards new technology. Bibliography Boubekri, N. (2001). Technology enablers for supply chain management. Integrated Manufacturing Systems Volume 12, Issue 6 , 394-399. Chow, W. S. (2006). ERP and Supply Chain Management. International Journal of Quality & Reliability Management Volume 23, Issue 4 , 460-462. de Burca, S., Fynes, B., & Marshall, D. (2005). Strategic technology adoption: extending ERP across the supply chain. Journal of Enterprise Information Management Volume 18, Issue 4 , 427-440. Kuei, C.-H., Madu, C. N., Lin, C., & Chow, W. S. (2002). Developing supply chain strategies based on the survey of supply chain quality and technology management. International Journal of Quality & Reliability Management Volume 19, Issue 7 , 889-901. New, S. J. (1997). The scope of supply chain management research. Supply Chain Management: An International Journal Volume 2, Issue 1 , 15-22. Winch, J. K. (2003). Supply Chain Management: Strategy, Planning, and Operation. International Journal of Quality & Reliability Management Volume 20, Issue 3 , 398-401. Read More