Innovation in Supply Chain Management - Assignment Example

Innovation in Supply Chain Management Contents Contents 1 Importance of Supply Chain Management in Innovation 2 Connection between Supply Chain and Innovation Processes 3 Advantages and Disadvantages of an Integrated Supply Chain System 5 Advantages 5 Disadvantages 6 Role of Technology in Supply Chain Functions 6 Conclusions and Recommendations 7 References 9 Innovation in Supply Chain The organizations operating in the current era becomes able to sustain their operations in the global marketplace through the system of meeting the enhanced and changing needs of the consumers. To fulfill the above objective the business concerns need to enhance the supply chain functions through considerable investments. Enhancements made in the realm of supply chain management activities through the incorporation of the consumer driven technology helps the firm to gain on both productivity and market shares. However in that the concern is required to effectively train its personnel to adapt to the new technological environment where training is imparted to them in regards to software functions. Use of technological innovation in supply chain functions helps the organization increase the level of stock turns and the inventory flows thereby gaining on in productivity and profitability (Pritchard, 2007). Importance of Supply Chain Management in Innovation The motto of the business organizations of the current era is to fulfill the needs and aspirations of the different consumers in regards to the different events pertaining to production of a new item, to its effective launching, marketing and promotion and also to its packaging and after sales services. To fulfill the above objectives the business organization focuses to link the supply chain management functions of the organization in making effective allocation of resources to help meet the needs of the consumer in due time. In that the business organization should not only endeavor to reduce the cost and lead times but also link the supply chain functions to consumer databases. The organization needs to link up the supply chain activities with technological concepts such as ‘Point-of-Sales’ to rightly assemble key resources to help produce the right merchandise to fit the consumer demand. Further the supply chain management team need to effectively collaborate with people belonging to other teams like sales and marketing, operations and financing to help in the successful accomplishment of innovative ideas. In that effective communication is required to be carried out between the supplies department and the sales and marketing people to help in the production of right product assortments. The supply team in getting the basic information about the needs of the market from the sales and marketing team need to work with the designing and manufacturing team to produce the right styles and sizes for the different product assortments. Production of merchandises based on innovative technologies related to the market gains success in that they rightly reach the consumers on time through the retail and wholesale activities. Thus supply chain management functions should work on the effective logistics to help reduce the time taken by the goods to reach from the manufacturer’s or supplier’s end to the consumer’s end. Effectiveness in the supply chain management activities is rendered by linking the logistics and lead time planning of the supply chain bodies to sales forecasting conducted by sales and marketing team in regards to changes in market demand. Retail organizations thus entail a special type of barcode against the different merchandises to help in tracking the movement of different categories or assortment of inventory. Such tracking systems thereby help the organization to indicate the demand scenario to its supply chain arms that in turn render the right product mix to the consumers. Thus effective supply chain systems work as an effective tool in helping in the incorporation of market related demand systems in the concerns (O'Marah, 2005). Connection between Supply Chain and Innovation Processes Organizations tend to succeed in that they effectively render a blend between the supply chain management functions with the innovation processes incorporated in the concern. In the first case the process of technological diffusion in regards to a business concern gains due effect in its relation to modification in the situational variables like that of supply chain activities. Organizations in order to sustain an effective innovative climate in the concerns need to actively pursue modifications in the supply chain paradigm to help in the proper allocation of resources and thereby fulfill the objectives for incorporating innovation. Contradictorily in the second case the process of technological diffusion or the process through which the technological team in the concern adapts to new technology tends to enhance the level of business risk and costs. Organizations tend to work for a sustainable period through the cultivation of effective communication and interrelation with stakeholders like the supply chain teams. Thereby any change focused to be brought about in the technological sphere is taken by such business managers as jeopardizing their long term relationships with the supply chain networks. Thus focusing on the above fact the linking between the processes of technological adoption process with the existing supply chain networks happens to reflect as an oxymoron. However in the third case an organizational group opines that the organizational management can effectively carry out the process of adoption to a new technology through the proper governance of supply chain variables. In that the management holds that ability to maintain effective relationship with existing stakeholder groups like the supply chain bodies to help conduct the innovation diffusion process in a successful fashion. Working based on the right supply chain mechanism helps the firm to rightly diffuse technological modification in the concern (Gan et al., 2007, p.89). The process of innovation in regards to communication technology in the concerns has led to the development and enhancement in the supply chain functions of the concern. Thus the introduction of electronic commerce applications has helped the stakeholder groups pertaining to the manufacturing and supply chain groups to effectively interrelate with each other. This process thereby enables to reduce the lead time pertaining to the supply chain functions in effective fulfillment of consumer demands. Through the use of internet based communication tools pertaining to electronic commerce the activities of the supply chain arm can be effectively integrated with other departments like finance and marketing. This activity helps in enhancing the realm of collaboration between the different constituent frameworks to rightly accomplish the objectives of the concern (Frohlich and Westbrook, 2001, p.196) Advantages and Disadvantages of an Integrated Supply Chain System Advantages The advantages or the benefits gained through the incorporation of an integrated supply chain system in a concern can be reflected as follows. Firstly such integration would help in the piling up of merchandises along the different stocking and shelving units. Secondly the use of integrated supply chain activities also helps in reducing the redundancy of the existing supply chain systems for the concern. Thirdly the incorporation of an integrated supply chain framework also helps the concern effectively reduce the cost related to supply chain activities and also pertaining to various transactions. Moreover the tendency of conflict between the different supply chain variables and elements also rightly reduces through such integrated supply chains. Fourthly such process helps in drawing collaboration between the different organizational elements to help in accomplishing organizational objectives in a collective fashion. Fifthly the use of an integrated supply chain model also helps the business concern to rightly adjust to changes or alterations in the market demands. Finally in the sixth case the use of such integrated supply chain networks helps the concern in largely reducing the costs related to investments and operations and thereby helps the firm gain on profits. It also helps the firm in effectively actualizing the plan in regards to the development of a product in a much faster manner than in the previous case. Above outlined are some of the salient advantages that a firm retrieves through the incorporation of an integrated supply chain framework (Ondersteijn, 2006, p.182). Disadvantages Though working on a system of integrated supply chain management tends to reflect the above advantages the process also suffers from some potential drawbacks that can be highlighted as follows. Firstly it is observed that the process of drawing in effective collaboration between the different constituent elements requires the firm to incorporate a large amount of technological and skilled resources. Such enhancements in the resources framework for the concern works in augmenting the operational and training cost for the concern in that the personnel need to be made ready to adapt to such changes. The above fact reflects in the second case that incorporation of integrated supply chain management functions would require large scale commitment and focus of the organizational managers. Thirdly such functions also amount gaining collaboration of other stakeholder groups in the concern and thereby tends to invite conflict of ideologies. Fourthly the use of such integrative supply chain models require the business organizations to incorporate highly efficient software like enterprise resource planning thus enhancing the infrastructural and technological costs for the concern (Zhang, 2007, p.45). Role of Technology in Supply Chain Functions In the modern era the supply chain systems of an organization are effectively linked up with information technology processes to help in rendering excellence to the existing operational climate. In the first case the use of information technology helps the supply chain systems of an organization spread along an international sphere to get effectively connected. This activity gains effect through the incorporation of internet technology in the mode of supply chain functions of the company. Secondly the use of information technology in the supply chain paradigm enhances the visibility of large amount of information regarding changes in the external demand conditions and also pertaining to the movement of inventory along different levels. Such data helps the organization to formulate the right marketing, inventory and operational policy to help in fulfilling consumer tastes. Again in the third case the use of technological paradigm helps in enhancing the level of communication between different departments in the concern with the supply chain operations. Synergizing the activities of the different units helps the concern to gain all round productivity. Fourthly the effective use of information technology in regards to supply chain functions also helps in rightly optimizing the use of organizational resources in order to gain due productivity. Fifthly the incorporation of technology in the supply chain paradigm also helps the concern rightly execute salient functions in a timely fashion thereby qualifying in terms of excellence. Sixthly the use of information technology in the sphere of supply chain activities helps in enhancing the speed in the dispatch functions in regards to merchandise flows from the manufacturing center to the sales point. This function helps the concern in rightly meeting the needs and aspirations of the consumers in the right time and thereby enhances the brand image and goodwill of the firm (Coyle et al., 2008, p.192). Conclusions and Recommendations The supply chain management activities in the current era to become increasingly effective are linked with the demand scenario in the firm’s external environment. Technological innovations linked with consumer demand make the supply chain activities more meaningful in that such would be used for the production of the right product assortment. However the business manager is required to incorporate innovation in the technological paradigm through effectively linking it up with the supply chain functions to avoid the combination to turn into an oxymoron. The technology to be used needs to be evaluated in the light of the modifications required to be rendered in the supply chain systems. In this light the use of internet communication technology is held to transform the supply chain paradigm of multinational companies making them more cost effective and enhancing such to meet changing consumer demands spontaneously. References Coyle, J. J., et al., 2008. Supply Chain Management: A Logistics Perspective. United States: Cengage Learning. Frohlich, M., and Westbrook, R., 2001. Arcs of Integration: an international study of supply chain strategies. Journal of Operations Management, 19, 185-200. [Pdf]. Available from: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.203.6150&rep=rep1&type=pdf. [Accessed 24 May 2012]. Gan, C., et al., 2007. Innovation Diffusion With The Supply Chain: The Chinese Apparel Firms In Shenzen. Innovative Marketing, 3(3), 78-92. [Pdf]. Available from: http://businessperspectives.org/journals_free/im/2007/im_en_2007_03_Gan.pdf. [Accessed 24 May 2012]. O'Marah, K., 2005. Supply Chain-Driven Innovation. Harvard Business School [Online]. Available from: http://hbswk.hbs.edu/archive/5139.html. [Accessed 24 May 2012]. Ondersteijn, C. J. M., 2006. Quantifying the Agri-Food Supply Chain. New York: Springer. Pritchard, S., 2007. Control of the Supply Chain Turns Critical. The Financial Times Limited. Zhang, Q., 2007. E-Supply Chain Technologies and Management. United States: Idea Group Inc (IGI). Read More