Supply Chain Management - Essay Example

Supply Chain Management Introduction Getting a product to a given market in a timely and profitable manner is essential in today’s increasingly global and competitive marketplace. Any given product must go through a cycle of design, production, and delivery in order to truly have any lasting and positive impact on the overall economic condition associated with the company that is responsible for its operations. In essence, the supply chain has become a critical component of this activity in order to ensure that consumers are presented with a continual and regular cycle of opportunity to purchase the goods and services that they require, at a time and location that is of upmost convenience to them. By way of example, consider the two different product of soft drink beverages and high-definition televisions. Each has its own respective supply chain, which impacts the ways that decisions are made in terms of the medium and speed by which products are transported to the consumer. This must be done in such a way that not only meets the demands of the consumer, but also maintains a high quality and integrity of the product that will encourage future consumption. 2. Overall Design of Supply Chains Simply put, supply chain management makes business better. The design of such a process is to ensure that the right product gets into the proper consumer’s hands, in the right quantity, and on time. The design of the process includes the entire operation of the product, from the extraction of raw materials to the actual purchase that is made by the consumer. In the case of soft drink beverages, this includes the procurement of the correct ingredients that are required to make the drink, to the actual collection of the bottles or can that the liquid will eventually be placed into. In entails the mixing of the ingredients to create the beverage, and continues through the factory process of pouring and closing of bottles. Finally, the supply chain process for soft drinks is not complete until the beverages themselves are delivered to various locations in a timely manner and the consumer actually purchases the product to take with them. This is a complex process, to be sure, and one that involves numerous factors in order to be effective. What one person might view as a simple matter of getting the proper drink into the hands of a consumer that desires the product is actually a complex process that requires numerous individuals and organisations coming together to create and deliver a quality product to the consumer. The supply chain design for television undergoes a similar process, but can potentially involve even more variables. Televisions themselves contain numerous components that might be built by multiple companies. As such, it is important to manage the devilry and proper assembly of each component in order to meet deadlines that must be adhered to in order to keep up with the changing demands of today’s modern consumer (Blecken, 2012). It is a complex process that requires the proper managing and assignation of logistics in order to accomplish that task effectively. The overall design of the supply must focus on areas of planning, forecasting, purchasing, product assembly, transportation and logistics, storage, distributions, sales, and customer service. 3. Decision Making Process The aforementioned supply design plays a tremendous role in the decision making process that is embarked upon in determining how exactly to get either soft drink beverages or televisions to the marketplace in a timely manner. The decision making process itself involves manufacturers, retailers, transportation companies, third party logistics firms, government agencies, and service firms. Consider the reality that both products, in order to entire the market place successfully, must satisfy taxing and regulatory requirements set forth be respective governments before they can be sold to the consumer. This impacts the delivery schedule and the manner by which the product itself is marketed (Shah 2013). Supply chain professionals themselves must be involved in several different areas of the operations of a company, often times simultaneously. These activities include purchasing, logistics, new product development, global sourcing and procurement, quality management, inventory control, traffic analysis, operations, and supplier relationship management. When considering the product of television, for example, part of the supply chain process involves sourcing parts for the television from various suppliers, often on an international scale (Robinson & Rainbird 2013). This means that the various components that go into the assembly of a television may actually need to be purchased from different countries, which entails a logistical issue of ensuring that the proper components get delivered to the assembly factor on time. If one supplier is late, for example, it can hold up the entire assembly process, thereby destroying the relationship that the television company has with its distributors and, ultimately, the consumer. The decision making process for soft drink beverages might not involve a multinational endeavour of sourcing various ingredients, but it does involve sourcing the proper ingredients that are of the highest quality and within a given price range. One misstep can create an inferior product appearing on the marketplaces whereby consumer quickly lose trust in the brand. At the same time, the same issue arises with the logistics of ensuring that the necessary ingredients are in stock and ready to be included in the soft drink at the time of assembly. If a continual line of soft drinks in not ready for shipment according to a defined schedule, regional stores could be without a product at various times of the year. Were this to happen, consumers would be tempted to purchase a product made by a competitor to quench their thirst for a drink in the interim, possibly causing them to lose interest altogether in the original company. As such, the decision making process throughout the supply chain cycle is critical to the overall success of the organisation. 4. Role of the Consumer It goes without saying that without the adequate number of consumers to purchase a product, the product itself will quickly become obsolete. Certainly, there are various factors independent of the supply chain that can affect this, such as the demand for the product and economic situations, but all things being equal, the supply chain plays a critical role in determining the ultimate success or failure of a product (Chen 2009). The ability of an organisation to deliver the finished product to the customer depends on a variety of aspects of the overall operation of the company, yet the consumer is not concerned with this. They are only interested in the reality of whether or not the product is one the shelf when they wish to purchase it. As such, the increased competition, complexity, and geographical boundaries that today’s soft drink and television manufacturers are operating under has only served to broaden the scope of what is possible with the supply chain. Products are no longer limited by physical location of the processing plant, but this has also opened up an entirely new logistical field that must be dealt with in order to satisfy the unique and changing needs of the consumer (Chen & Landry 2009). One are that has bought consumer and producer close together is the Internet and electronic mail. Consumers today can interact with the producers of their product of choice in order to get important answers that they need in order to make purchasing decisions. These two mediums alone have complete altered the process of communication and the exchange of data is such a way that has freed up the flow of information between the various companies involved within the supply chain. Consumers now are perhaps just as likely to purchase a product based upon some type of personal interaction with the company as they are based upon the actual marketing concept related to the company. Because of these factors, today’s consumer conscious companies are working to better implement the concepts related to supply chain management into their daily business operations as a way to reduct cost and cycle time expenses that have often eaten away at their profitability (Keely 2011). This has resulted in big-box stores, such as Wal-Mart, to increase their inventory on certain products, and decreasing any incidence of out-of-stock products. This has served to create a replenishment cycle that has literally been reduced from weeks down to days or hours. This entails making the consumer happy about being able to depend, with reasonable confidence of having access to the product of their desire at any time that they wish. This develops customer loyalty over the long run, and enhances the integrity and professional image of the company as well. 5. Importance of Quality The importance of quality within the supply chain cannot be underscored either. For some products, such as televisions, this is often difficult to achieve because their are so many different suppliers of components that one poor piece of material can affect the overall integrity of the entire product. To ensure that quality is maintained throughout the process, the connections within the supply chain must all be integrated and maintained from the beginning to the end (Daugherty 2006). Any improvement within or a disruption throughout the various links of the supply chain can potentially the entire supply chain itself. Consider the television as an example. Imagine that a manufacture of a certain ray tube within the television itself ends up being of poor quality. Due to the fact that the manufacturing process of the entire product is dependent upon the timely delivery of ray tubes in order to assemble the television, a delay in one such component can impact the ability of the television company to deliver products to wholesalers in a timely manner. This would result in a potentially catastrophic breakdown in the supply chain itself that could threaten the future viability of the product (Graves & Tomlin 2013). The same would hold true for the soft drink producer. 6. Conclusion As has been demonstrated in this report, the supply chain process is critical to the success of a product. Consumers depend upon access to their chosen product at a time and location that is convenient to them. To ensure that this happens, the entire supply chain from beginning to end must be integrated in such a way that allows for a quality product to be designed, assembled, and delivered in a timely manner such as to preclude an out of stock situation that will simply result in the consumer turning elsewhere. This would be bad for business, naturally, but can be avoided with a bit of fore planning and the proper management of the entire supply chain. References Blecken, A. (2012). Supply chain process modelling for humanitarian organizations. International Journal of Physical Distribution and Logistics Management, 40(9), 675. Chen, H. (2009). Defining and operationalising supply chain process integration. Journal of Business Logistics, 30(1), 63-106. Chen, H. and Landry, T. (2009). Supply chain process integration: A theoretical framework. Journal of Business Logistics, 30(2), 27-46. Daugherty, P. (2006). Improving supply-chain processes. AORN Journal, 84(6), S78. Graves, So and Tomlin, B. (2013). Process flexibility in supply chains. Management Science, 49(7), 907-919. Keely, L. (2011). The supply chain management process. The International Journal of Logistics Management, 12(2), 13-36. Robinson, P. and Rainbird, H. (2013). International supply chains and the labour process. Competition and Change, 17(1), 91-107. Shah, N. (2013). Process industry supply chains: Advances and challenges. Computers and Chemical Engineering, 29(6), 1225-1236. Read More