Necessity of Supply Chain Management - Research Paper Example

Necessity of Supply Chain Management TABLE OF CONTENTS Introduction 3 Issues Involved in Supply Chain Management 4 Distribution Network Configuration 4 Transportation 4 Information 5 Cash Flow 5 Record Keeping 6 Conclusion 6 References 8 Introduction Business has grown and developed over the years and has expanded from the simple buying and selling into a series of activities and responsibilities, which are needed to ascertain the smooth operations of such a set up (Halldorsson etal 2007). One of these responsibilities is supply chain management and this aspect of business has become an integral fraction of the business activities that takes place in a company. Supply chain management can be described as the running of all businesses that happen to be interconnected with one another in relation to their involvement in the provision of a product or a service that is required in the creation of the final end product that is required by a consumer (Ketchen & Hult, 2006). This is to say that it deals with all the various parties that are involved in the different steps that are need in the production of a good or a service so as to ensure that everything goes smoothly. In a round of the activities involved, supply chain management deals with the purchasing and storage of the various raw materials that are necessary in production of the product, the inventory involved within the manufacturing stage (creation of the product) and the handling of the final product up to its point of consumption (Jacoby, 2009).. It ensures that no snag in terms of the materials involved in any of these stages is come across acting as a hindrance to the provision of the final product to the consumer. The necessity for supply chain management can be seen through the various responsibilities that are seen in this activity. Issues Involved in Supply Chain Management Business has grown and developed over the years and has expanded from the simple buying and selling into a series of activities and responsibilities required to ascertain the smooth operations of such a set up (Halldorsson etal 2007). One of these responsibilities is supply chain management, and this aspect of business has become an integral fraction of the business activities that takes place in a company. Supply chain management can be termed as the running of all businesses that happen to be interconnected with one another in relation to their involvement in the provision of a product or a service that is required in the creation of the final end product that is required by a consumer (Ketchen & Hult, 2006). This means that it deals with all the various parties that are involved in the different steps that are need in the production of a good or a service so as to ensure that everything goes smoothly. In a round of the activities involved, supply chain management deals with the purchasing and storage of the various raw materials that are needed in production of the product, the inventory involved within the manufacturing stage (creation of the product) and the handling of the final product up to its point of consumption (Jacoby, 2009).. It ensures that no snag in terms of the materials involved in any of these stages is come across acting as a hindrance to the provision of the final product to the consumer. The necessity for supply chain management can be seen through the various responsibilities that are seen in this activity. Issues Involved in Supply Chain Management There are various issues that are addressed in supply chain management. These issues serve to depict the necessity of this part of business to a company and they include: Distribution Network Configuration This involves the documenting and of all the factors involved in the supply chain such as the number and location of all the suppliers, distribution centers, warehouse and production facilities as well as consumers (Ketchen & Hult, 2006). This is necessary so as to ensure there is no confusion over issues such as where goods are at a certain stage of the production process and so on. Transportation This is an essential part of supply chain management as a company may be required to provide transport for the products at certain stages in their manufacture such as the collection of raw material from their point of origin to the processing plants and then the transfer of the end product from there to the end points (Blanchard, 2010). Transport is essential in these areas as one will need to consider issues such as the bulk and the nature of the products involved so as to know what type of transport will be best suited for their delivery from one point to another. Transport is also essential in the delivery of the final product to the various collection points to the consumers. Without factoring all these issues into the equation, success is likely to be a distant ambition of the company. Information Supply chain management also includes the management of intangible products such as information up and down the structured chain of command to the necessary departments so as to initiate the needed response from these areas of the business (Haag etal, 2006). The information involved could be dealing with issues such as demand signals or forecasts (that is, a noted rise or drop in the demand for a product), a change in certain activities of the business and various other messages (Jacoby, 2009). Transportation is also in need of this information as one will need to know the various pick up and drop off points that are involved in the movement of raw materials and finished products. Cash Flow Another aspect of supply chain management is the handling of the money that is involved in the various stages of the supply chain. This can only be handled by those involved in the supply chain management set up as they are aware of the various costs and expenses that are incurred in the various activities that take place up and down the supply chain (Blanchard, 2010). These costs may include factors such as transportation, payment of products needed such as the raw materials needed in the manufacturing process as well as of the individuals who are involved (Haag etal, 2006). The supply chain manager will also be in a better position to know about various issues involved in relation to the collection of cash as well. For example, they will be aware of the amount of products that were delivered to a certain retail point and thus how much money should be expected from that particular spot. Record Keeping Supply chain management also involves the storing of various records that are related to processes involved in the supply chain. These may include things such as the prices of the various goods and raw materials as well as expenses such as transportation costs over the years. Such records enable a business to note the current trends in the cost of such areas as well as recognize any changes that may have come about over time (Ketchen & Hult, 2006). This will allow them to predict any needed adjustments the business may have to make in order to efficiently adapt to the current times or changes that may occur in the future so as to maintain their level of profit margin. The keeping of records also helps in other activities such as the contrasting and comparison of different aspects when the business is faced with a decision to make over whether a change needs to made or should they maintain the current use of the materials in question for example. Conclusion In conclusion, Supply chain management is a part of business that cannot be ignored as is needed by every company in order to efficiently get their affairs in order. Without this practice, a business is likely to mismanage the various funds that are directed towards the maintenance of a supply chain as a result (Blanchard, 2010). The supply chain itself will not be properly handled as well leading to a number of setbacks occurring in the various stages of production of a good or a service. In short, a company will not be able to function efficiently without the use of supply management tactics in their business activities. References Blanchard, D. (2010). Supply Chain Management Best Practices, (2nd ed.). New Jersey: John Wiley & Sons. Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R. (2006). Management Information Systems For the Information Age (3rd Canadian Ed.), Ontario: McGraw Hill Ryerson. Halldorsson, A., Kotzab, H., Mikkola, J. & H., Skjoett-Larsen, T. (2007). “Complementary theories to supply chain management.” Supply Chain Management: An International Journal (12) 4. Jacoby, D. (2009), Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance (The Economist Books). New York: Bloomberg Press. Ketchen Jr., G., & Hult, T.M. (2006). “Bridging organization theory and supply chain management: The case of best value supply chains.” Journal of Operations Management, 25(2). Read More