Supply Chain Management - Literature review Example

Supply Management AFFILIATION: Supply Management Introduction of Supply Management Every organization needs suppliers to manage its business activities effectively. Thus, the company’s approach to the suppliers along with its acquisition policies and procedures and supplier relationships will impact the performance of the suppliers and organization as well (Ajmera & Cook, 2009). As the business world is changing due to technological advancements and advent of globalization, the organizations have to make sure that they have a strong supplier base to meet their long-term strategic objectives (Chopra & Meindl, 2012). It has been stated by Hugos (2011) that supply management emphasizes the need of creating an acquisition process which incorporates the strategic and value chain perspective of the supply management framework. The latest trend in the corporations is the development of value Supply Chain Management (SCM) structure so that every business involved in the entire chain works in a collaborative way (Christopher, 2011). Today, those organizations can compete effectively who have flexible, proactive and efficient SCM so that they can respond proactively to the changing demands of the customers. In other words, Supply Management is described as the network of facilities along with distribution choices which perform the vital activities i.e. material procurement, operations/production processes, outbound logistics, marketing and sales and distribution of the finished goods to the consumers (Naslund & Williamson, 2011). Hence, every activity within the SCM has to be properly aligned with the business purpose so that it can prosper successfully and attain its objectives effectively. Significance of Supply Management As the organizations have evolved and markets have been revolutionized, the concept of Supply Management has become wider in scope (Hugos, 2011). Supply management is concerned with activities in addition to the procurement process such as the identification of market demands, transferring the new demand into a commercial description, looking for the key suppliers, selecting the compatible supplier, documenting the contract details, delivering the products and services, payment of suppliers, inspection for quality assurance, scheduling the transportation, inbound and outbound logistics management and many more (Monczka et al., 2011). In addition to the operational concerns, the supply management is comprised of a range of strategic functions such as reducing the overall cost, producing the goods in efficient manner, enhancing the products and services quality, cutting down the lead time, eliminating the waste producing steps and availing the technological advancement options (Chopra & Meindl, 2012). Hence, the supply management has to make sure that it considers future avenues for growth and business viability so that it can survive for long period in the market. Key Drivers of Supply Management When a supply chain structure is being designed, it is crucial for the companies to evaluate the features of its framework. There are various factors which have to be analyzed to make sure that it will be able to produce and deliver the offerings to the customers on time with excellent quality (Christopher, 2011). There are five main drivers of supply management i.e. production, inventory, information, location and transportation (Monczka et al., 2011). Regarding the production aspect, a firm has to decide about the quantity and quality of its goods so that it is assured about the position of its finished products. In the production section, the company has to develop strategies for determining the plant capacities, balancing the workload, maintenance of equipment and machines and quality control procedures. Likewise, for the inventory, an organization has to decide about the minimum inventory level which should be maintained so that it does not run out of stock and can also meet the demands of its market effectively. It even has to create a schedule for order placement, warehousing, order delivery and setting lead times (Naslund & Williamson, 2011). One of the crucial requirements in Supply Management is the Information Technology (IT) system. With the advancements in the IT world, many organizations have availed the opportunities of cutting down their operational cost and developing the entire SCM on these systems. For instance, Dell and Amazon.com have started their E-commerce businesses which allow them to reduce their inventory cost and get in touch with the customers online. With such effective Internet based businesses, the companies have been conducting their business operations effectively and running profitable enterprises (Ajmera & Cook, 2009; Monczka et al., 2011). The location of the production facilities is determined on the basis of the customer needs, features of the goods, cost of production, availability of labor and etc.; majority of the companies have taken advantage of the globalization by shifting their manufacturing concerns in the low cost countries. GSK, Unilever, P&G, Pfizer, Johnson & Johnson and others have transferred their production houses to China and India to avail the cost saving opportunities while maintaining the consistent high quality level (Naslund & Williamson, 2011). Finally, transportation options have to be carefully evaluated i.e. air, freight, ship, road and rail so that the best mode is selected for the operations of the company. Now-a-days, Internet has eased the operational procedures of many companies and they are relying on the technological gadgets to enhance the level of production and provide the customers with excellent range of offerings (Chopra & Meindl, 2012; Hugos, 2011). Latest trend in SCM Due to globalization, increased access to a wide range of operational facilities, enhanced Internet availability and growth in the challenges for today’s organizations, it has become imperative for the organizations to develop highly efficient and coordinated Supply Management framework. Even the suppliers have to make sure that they respond to their client’s demands on time by implementing the latest features of SCM (Chopra & Meindl, 2012). Now-a-days, all the top ranked companies have changed their SCM to incorporate the range of modern concepts such as Six Sigma, Just-in-time Inventory, Total Quality Management (TQM), Outsourcing, Quality Management, Lean or Agile Manufacturing and etc. With the help of these developments, some of the organizations have been able to exploit the opportunities in international markets and make their Supply Chains global and efficient (Hugos, 2011; Naslund & Williamson, 2011). All of these latest procedures help an organization in managing their resources efficiently, producing goods in cost efficient manner, enhance the customer delivery process, continuously improve the supply chain, monitor the quality of suppliers, avail the best options of effective transportation modes and etc. (Christopher, 2011). However, every company has to make sure that it keeps the Supply Management simple so that every activity is visible and there should be strict accountability for all matters so that any errors are eliminated before they incur huge losses for the organizations. Conclusion As Supply Management has widened its scope to incorporate the demands of the international businesses, it is vital for the organizations to develop highly efficient and an integrated SCM framework. Every company should try to avail the best option so that it can meet the demands of the customers effectively and control the costs of production by relocating the manufacturing concerns. With the advent of technological advancements and robust growth in the globalization, the companies are availing the expansion opportunities on global level. In order to sustain the competitiveness in the international markets, it is imperative for the organizations to develop such effective and integrated supply chain which will allow it to meet the demands of each market. Although it is believed that the organizations should learn from the successful corporations but they should implement those processes which comply with the requirements of its business operations. Thus, a well developed SCM is one which supports a company in managing its resources effectively and assists it in achieving the organization’s goals. References Ajmera, A., & Cook, J. (2009). A multi-phase framework for supply chain integration. SAM Advanced Management Journal, 74(1), 37-47. Chopra, S., & Meindl, P. (2012). Supply Chain Management. 5th ed. USA: Prentice Hall. Christopher, M. (2011). Logistics and Supply chain management. 4th ed. London: Financial Times. Hugos, M.H. (2011). Essentials of Supply Chain Management. 3rd ed. USA: John Wiley & Sons. Monczka, R.M., Handfield, R.B., Guinipero, L.C., & Patterson, J.L. (2011). Purchasing and Supply Chain Management. 5th ed. USA: South-Western Cengage Learning. Naslund, D., & Williamson, S. (2010). What is management in Supply Chain Management (SCM)? A critical review of definitions, frameworks and terminology. Journal of Management Policy and Practice, 11(4), 11-18. Read More