Various Concepts Related to Supply Chain Management - Coursework Example

Supply Chain Management Executive Summary This study is centred towards analyzing various concepts related to supply chain management. Two unrelated products have been chosen in order to outline their supply chain activities. The role of consumers, quality control and decision making technique in context of chosen products has been highlighted. Contents Contents 3 Introduction 4 Main Body 4 Design of supply chains 4 Procedure of decision making 6 Role of consumer 7 Importance of quality 9 Recommendations 10 Conclusion 10 References 12 Introduction Supply chain management can be defined as strategic and systematic coordination of functions of traditional business. These business functions are taken into consideration for enhancing long term performance. In overall context these elements contribute towards supply chain operations. Every organization encompasses a well structured supply chain procedure. There are several activities involved that deals with production of goods to delivery to end users. It can even be stated as designing, controlling, planning, monitoring and executing activities. This concept comprises of certain objectives such as creating net value, developing competitive advantage, synchronizing demand and supply, leveraging logistics worldwide and measuring performance. To be more precise supply chain management is all about relationship management between customer’s customer and supplier’s supplier. Supply chain participants like distributor or retailer or wholesaler are involved in the process in order to achieve customer satisfaction and competitive advantage. In a supply chain there is proper downstream and upstream flow of services, information, products and finances. This study would highlight supply chain process of two unrelated products such as food and electronic item (cellphones). Main Body Design of supply chains Supply chain operations differ from one industry to another. The two products been selected are food product and cell phones. Food product always possesses high customer demand. In order to meet this demand it is essential to have a constant flow of inventory. From suppliers to retailers food product has to be stored in proper locations. Supply chain participants for a food product can be classified as grower, processor, wholesaler, retailer and consumer. The entire supply chain procedure for this product has been outlined in figure 1. Figure 1: Food Supply Chain (Source: Chopra and Meindl, 2007) As per figure1, throughout the supply chain, information, product or money plays a significant role. Information flow is observed from grower to consumer. There is a major aspect which is strongly associated with food product – quality. Returns are only initiated when desirable food quality is not properly been maintained throughout the process (Christopher, Payne and Ballanthyne, 2005). Coordination also forms a critical factor when it comes to manufacturing and delivery of a food product to end customers. Supply chain operations of a mobile phone can be stated as ranging from equipment manufacturer to end retailer. The manufacturer is solely responsible for producing the product through designing, structuring and forming a final model. A mobile phone’s supply chain operations have been highlighted in figure2. Figure 2: Supply Chain of a mobile phone (Source: Silva, 2005) According to figure2, original equipment manufacturer or OEM plays a key role in designing products as per customer demand. The equipment been designed is not completed until it is supported by wide array of components. Refined product delivery is totally dependent on performance of component manufacturer (Leeman, 2010). Processor or rather smelter is utilized to assemble all necessary parts of the phone. This in turn is delivered to traders or middlemen, who then reach desirable products to end customers. Retailers even keep stock of this product so as to deliver it to end users at convenience. Procedure of decision making The decision making procedure is closely knitted with the type of product being sold by manufacturers. High involvement products usually require different decision making process in comparison to low involvement products. For instance, a food product encompasses high profitability margins since customer demand is high in the market place. There are dual approach of decision making like from company’s perspective and individual’s perspective. A firm that manufactures food product are highly concerned with raw materials and quality of item. Decisions are made on basis of grower selection, influencing delivery of raw materials within required time period to right place. Lead time is reduced during food processing so as to ensure that food quality does not deteriorate. Decision making approach incorporates allocating money and time to all supply chain activities. On the contrary, customers or end users make decision based on food ingredient, quality and cost. Inventory management is decided by the firm manufacturing food product and waste recycling or returns also is taken into consideration by supply chain participants. In case of mobile phone supply chain there needs to be proper synchronization amongst all supply chain partners. It can be stated that equipment manufacturer is solely responsible for selecting device design and then implementing it to form real world product (Kumar, 2007). Component manufacturer takes decision regarding which of the components would be most suitable for a mobile phone. These components are then checked in relation to quality and dimensions. Every department is allocated a specific decision making power and it contribute towards product success in the market place. In overall context decision for this supply chain is made on basis of customer demand and flow of inventory. The main focus of firms manufacturing this product is to effectively manage inventory and reduce inventory costs. All supply chain participants are actively involved in decision making process. Role of consumer The role of consumer is significant in supply chain management. Products or services that are offered by a firm are inclined towards fulfilling customer demand. Customers are a central component in supply chain operations. Their role is significant from the initial phase of operations to final stage of supply chain management. Consumers are responsible for creating demand within the market place and this in turn affects the production flow. Consumer’s role is witnessed not only during making a purchase decision but even after product purchase. In the past years consumers had no such influence on supply chain management activities. This is because there was no availability of information in terms of determining who manufactured a product, conditions being maintained during the process and expected time of delivery. However with changing conditions and modernization customers has greater accessibility towards information. This in turn affects overall supply chain operations and enforces a firm to adopt best possible measures. Role of consumers is greatly witnessed during order tracking phase since ordered items can be easily tracked (Taylor, 2007). This kind of mechanism has increased expectations of customers. In earlier times customers did not possess any such expectation regarding delivery of goods. Increased expectation has facilitated customers to put pressure on companies in context of delivering products right on time. Thus companies need to plan their supply chain operations in such manner that lead time is reduced and products are delivered on expected time. On the other hand, price pressures are also significantly affecting supply chain activities. It can be stated that e-commerce emerged as a platform enabling customers to purchase products from around the world. Customers are able to compare prices and select the lowest price supplier. It influence supply chain operations in terms of executing the entire procedure in least possible cost. Role of consumers are also outlined in supply chain activities of mobile phone and food product. They play a major role in manufacturing process, delivery, goods return, etc. Importance of quality In business world quality has become the most influencing factor. Large or medium sized firms are all focused towards gaining quality assurance standard that is ISO 9000. The major aim behind gaining this standard is not only for staying competitive but even maintaining a proper market position. Firms has also benefitted from working in collaboration with customers and suppliers. Supply chain management has basically resulted from this type of collaborative working. This mechanism has an impact on product quality and profitability margin. Quality control within this mechanism is highly essential in terms of gaining competitive edge (Hoyle, 2007). Operational costs are also decreased if high quality standards are incorporated by a firm. Without quality control the amount of waste becomes more prevalent. On the other hand, desirable quality standard support a firm to retain large base of customers. Hazardous substances are used by wide array of firms in manufacturing process. However proper quality control prevents stakeholders or employees from being affected by such toxic materials (Oakland, 2003). Inspections performed within a company tend to increase operations costs. Quality control measure if implemented appropriately would help in reducing overall logistic costs. For instance in case of mobile phone or food product if raw materials are defective by nature it gives rise to an inefficient product line (Kujala and Lillrank, 2004). Both these products require sustaining high quality standards and attracting large group of customers. Inferior materials often require more refining and this in turn enhances manufacturing costs and workload of employees. The company’s integrity can only be protected through controlling quality of inputs in production process. On the contrary, when there is poor quality control then products are expected to wear out much before given warranty period (Mitra, 2012). Customers who return items back because of low quality tends to lose respect towards a particular organization. The better quality control over inputs of suppliers, the lesser is product failures and risk of returns. Recommendations Supply chain activities of both the chosen products such as mobile phone and food product are similar to a certain extent. These products are highly dependent on quality of the entire process and proper management of time and resources. It can be stated that supply chain activities of the food product requires more number of processing units and wholesalers located as per regional demand. Logistic costs often are high in case of centralized system so it is recommended that this product possesses a decentralized system. This would help the firm to reduce on lead time and delivery product within required time. Mobile phone encompasses a simple supply chain process. However in this process there can be wide array of retailers or store outlets for reaching out to target customers. Online platform would also be a suitable measure in relation to increasing convenience level of customers. It will even facilitate elimination of middle men and thus cost savings. Conclusion As per this study supply chain management is all about planning, designing, controlling and executing business operations. Every organization has a particular supply chain structure which is best suitable for their product or service delivery. In this study two unrelated products were chosen – food product and mobile phone. There are different supply chain participants witnessed in context of both these products. Manufacturing to delivery function is similar in case of all products but participants involved basically perform separate functions. Role of consumers are highly significant in the entire mechanism. In previous years customers were not able to influence supply chain activities. However with growth of advanced technology customers are indulged within the process ranging from enhancing market demand to order tracking mechanism. Decision making also is distinguishable since stakeholders involved in supply chain management undertakes decision as per their role. This has been highlighted in case of both chosen products. Quality control has also been regarded as an essential tool for reducing operational costs and retaining wide customer base. References Chopra, S., and Meindl, P., 2007. Supply Chain Management: Strategy, Planning, &Operation. New Jersey: Upper Saddle River. Christopher, M., Payne, A., and Ballanthyne, D., 2005. Logistics, the supply chain and competitive strategy. UK: Butterworth Heinemann. Hoyle, D., 2007. Quality Management Essentials. Oxford: Butterworth-Heinemann. Kujala, J., and Lillrank, P., 2004. Total Quality Management as a cultural phenomenon. Quality Management Journal. Vol.11 (4). Kumar, S., 2007. Connective technologies in Supply Chain. New Delhi: CRC Press. Leeman, J. J. A., 2010. Supply Chain Management: Fast, flexible supply chains in manufacturing and retailing. Germany: Book on demand. Mitra, A., 2012. Fundamentals of Quality Control and Improvement. New Jersey: John Wiley & Sons. Oakland, J., 2003. Total Quality Management: Text with cases, 3rd ed. Oxford: Butterworth Heinemann. Silva, A., 2005. The Ten Commandments of Quality Management. Bloomington: iUniverse. Taylor, M., 2007. Global economy contested. New York: Routledge. Read More