Supply Chain Management in Defence Industry - Essay Example

Supply Chain Management Name Institution Course Date Supply Chain Management Executive Summary Supply Chain Management within organizations is important for it focuses on meeting the needs of customers. The pace of change as well as the uncertainty on how markets evolve has resulted to a significant increase for to be wary of the various supply chains they take part in in order to get ahold of the different functions that they play. Therefore, for the organizations that adapt quickly on how to build and take part in strong supply chains have more leverage over those that slowly adapt to their markets. Thus, for the defence industry, which is characterized by a volatile environments, senior management in organizations have to ensure that their supply chain management strategies strongly adapts to their evolving markets. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Supply Chain Management in Defence Industry 4 Logistics Solutions in a Defence Supply Chain 5 Packaging and Production in a Defence Supply Chain 6 SCM Approach in the Defence Industry 7 Conclusion 8 References 9 Introduction Supply Chain Management (SCM) is a concept that entails organizations as well as business activities that are required to design, make, deliver and utilize a product or service (Coyle et al., 2009). SCM is anchored on two fundamental ideas. The first idea is that essentially every product or service that gets to the end user comprises of the combined effort of more than one organization. These organization that participate in ensuring smooth movement of good to the consumers are known as supply chains. The second idea is based on the attention organizations pay to events happening within their premises yet having being in existent as supply chains for a very long period of time (Coyle et al., 2009). Therefore, collectively, supply chain management is considered the dynamic management of supply chain activities with a motive of maximizing the satisfaction of customer value as well as gaining a competitive advantage (Cohen and Roussel, 2013). In addition, it represents the mindful effort of supply chain firms to create and execute supply chains in best way possible which is both efficient and effective. The various organizations that constitute a supply chain are interconnected via both physical flows as well as information flows (Coyle et al., 2009). The physical flows constitutes the transformation, hauling and storage of products and are considered the most visible part of a supply chain. On the other hand, information flows permits the coordination of several supply chain partners in assessing their long – term plans and the control of the daily flow of goods and materials up and down the supply chain. In order to gain a competitive edge over the competitors, companies today are striving to meet the needs and expectations of the customers (Fawcett, 2007). Success in doing this is founded upon developing business processes and activities that can strategize, manufacture and deliver the creative, innovative, low-cost as well as quality products and services. This report will discuss the various considerations by senior management in defence on the need for an agile approach to supply chain management. Supply Chain Management in Defence Industry The challenges that are associated with supply chain management in the defence industry comes with the highly specialized skills as well as the knowledge that accompany both the manufacture of defence based products. In addition, specialized knowledge about the storage, handling and transportation of such products is highly required in order to improve agility, efficiency and profitability. Therefore, running and managing of a successful supply chain within the defence industry is a very complicated task (Fawcett, 2007). The high value and specialized nature of both products and services within the defence industry entails a rigorous compliance standards as well as stern safety and security actions which are performed without any compromise. All these considerations are conducted so as to ensure that the interest of both the supply chains as well as those of the defence develops without any compromise (Oakden and Leonaite, 2011). When it comes to customer loyalty in with regard to supply chain management, the defence industry ought to associate with a supply chain partner who can be well trusted to deliver the highly volatile products to their customers (Gates, 2004). The defence industry ensures that an effective supply chain management is appropriately followed by making sure that both inbound as well as outbound supply chains together with logistics operations functions at peak performance and efficiency from the beginning of the operations till the end. In addition, the defence industry requires agile SCM since it allows their customers the traceability they need as well as the scalability they need whenever circumstances dictates. Furthermore, a cost effective solution has to be developed followed by the right process and methods in position (Gates, 2004). This will ensure that the supply chain functions effectively. The need for an agile SCM in the defence industry ensures saving of time, quick response to the needs of your customers and significant reduction in risks. Moreover, these SCM’s ought to encourage flexibility by showing its relevance to the needs of the customers today and at the same time scalable to fit their future needs (Gates, 2004). Logistics Solutions in a Defence Supply Chain In addition, the defence supply chain is characterized by having an extensive experience in offering logistics solutions with regards to defence manufacturing as well as spares environments which is strongly supported by a strong compliance standards (Esper, Fugate and Davis-Sramek, 2007). This range of logistics solutions touch on most parts of the defence supply chain. These services should be delivered using the “no-compromise” approach which pays a lot of attention to details so as to ensure best practices. Therefore, senior management ensure that these standards are met at all times within the SCM by conducting inbound logistics which entails the management of elements in both feeding and kitting from vendor all the way to production (Christopher and Towill, 2001). Also, warehousing services are a part of the defence supply chain since they provide scalable and flexible solutions which reacts to exacting as well as varying programme demands. Spares and reverse logistic takes care of the covering the gathering, storage and delivery of spares. Due to the volatility of the products being handled, high performance packaging of the products are undertaken to guarantee topmost security (Croxton, 2003). Packaging and Production in a Defence Supply Chain Since defence is a worldwide industry, both production and projects are seldom restricted within one territory. Therefore, hands-on experience is required in offering agile logistics support all over the world (Mentzer, Stank and Esper, 2008). Senior management should therefore guarantee that security is highly maintained when handling military products. A defence-focused solutions possess a worldwide reach that has a flexible approach to affirming their chief customers intentionally. Therefore, senior management within a defence supply chain observe the following: Global Packaging They are designed, manufactured and after all that they are packaged in proper protective packages in order to ensure that they experience a safe transit of military equipment even through the harshest form of environment. They do this so as to maintain a solid customer loyalty even if they face quite some expenses (Mangan, Lalwani and Butcher, 2008). For example, in these defence institutions, they have in-house workshops that highly specialize in the fabrication of packages that can withstand even the highest temperatures as well as robust handling. All these procedures are followed to meet the end satisfaction of their customers and at the same time encourage security. End-to-End Security Defence supply chains highly invest in high-tech security screening as well as employee vetting. This enables the facilitators to conduct dispatch of their equipment while streamlining their routes without compromising public safety at the same time saving time (Christopher, 2016). High Value Product Care Senior management in a defence supply chain always maintains their agility within the defence industry by specializing in storing, packing, handling as well as transporting complicated and high value equipment. For instance, maintaining the highest quality control whether to the smallest devices all the way to the largest military devices. Also, regular inspections as well as compliance are performed to such equipment (Mangan, Lalwani and Butcher, 2008). Agility and Service Excellence This is a fundamental area when it comes to customer satisfaction. Defence supply chains ensure that they maintain top-notch services by putting agility and flexibility at the forefront of all their operations (Mentzer, Stank and Esper, 2008). These supply chains are often willing to stretch an extra mile in order to meet their customer needs. Senior management in these supply chains encourage the aspect of flexibility which by actively responding to surge demands as well as pressing operational needs and hence making sure that their supply chains are not at any time compromised. Additionally, these SCM’s allow customers to depict on extensive resources which are designed to improving flexibility adding value to any opportunity during operation and to whatever scale, increasing responsiveness and minimizing risks (Mentzer, Stank and Esper, 2008). SCM Approach in the Defence Industry The approach of eliminating waste by either avoiding over-production, reducing inventory, minimizing products defects and minimizing processes and operations is not the best approach when it comes to defence supply chain management. First and foremost, as mentioned earlier, the defence industry is characterized by the production and supply of equipment that are highly sensitive and that are not exposed to the general public (Gates, 2004). Therefore, the issue of avoiding over-production contradicts how defence supply chains operates. This is so because the end customers who are destined to receive such products or services are specific customers (Rushton and Walker, 2007). Therefore, both responsiveness and efficiency have to be employed in such a supply chain because of the nature of the goods being served. On the other hand, reducing inventory does coincide with the nature of a defence supply chain. An inventory is defined as the amount of goods, either raw materials or finished goods, which is stockpiled in each step of a supply chain (Oakden and Leonaite, 2011). Since the chief purpose of an inventory is to ensure that there is no uncertainty within the supply chain, a defence supply chain ensures that their inventory is specific to the customers with which they produce and supply their products to (Oakden and Leonaite, 2011). An increase in the inventory in a defence supply chain may lead to constant threats on the goods in store due to its delicate nature. The minimization of product effects also differs from that employed by the defence supply chains. This is primarily because of what the customers want. Senior supply chain management dealing with the defence industry have to ensure that their products are made to standards. This is because the equipment involved are highly expensive therefore there is no room for mistakes. Therefore, it is not the best strategy when it comes to the defence industry (Oakden and Leonaite, 2011). The balance between manufacturing and SCM is very important and is what brought about the concept of agility. Balancing the two encourages manufacturing flexibility which brings about greater responsiveness within an organization (Rushton and Walker, 2007). Therefore, this balance is very appropriate especially in this setting of a defence supply chain since it involves environments that have a very volatile demand of products and at the same time the variety is high. Conclusion To sum up, Supply Chain Management encompasses organizations as well as the business activities that are required to design, make, deliver and utilize a certain product or service. SCM is based on two principles; every product that reaches the consumer is as a result of a combined effort and attention organizations pay to events that are happening within their premises. Therefore, SCM allows an organization to maximize the satisfaction of their end consumer. Organizations that are comprised of supply chains are linked by both physical flow and information flow. In this defence industry, the challenges associated with SCM include; specialized skills and knowledge, high value and specialized nature of the product and stern safety and security actions. In addition, the defence industry requires an agile SCM in order to ensure customer satisfaction. Also, a defence supply chain is characterized by strong compliance standards and extensive experience. Furthermore, these defence supply chains usually observe the following to ensure customer satisfaction; global safe packaging, end-to-end security, high value product care as well as agility and service excellence. Finally, eliminating waste by either avoiding over-production, reducing inventory, minimizing products defects and minimizing processes and operations is not the best approach when it comes to defence supply chain management. References Christopher, M & Towill, D 2001, ‘An integrated model for the design of agile supply chains’, International Journal of Physical Distribution & Logistics Management, Vol.31, No.4, p. 235-246. Cohen, S & Roussel, J 2013, Strategic supply chain management the five disciplines for top performance, New York, McGraw-Hill Education. Christopher, M 2016, Logistics & supply chain management, Harlow, United Kingdom: Pearson Education. Coyle, JJ, Langley, CJ (Jnr), Gibson, BJ, Novack, RA & Bardi, EJ 2009, Supply Chain Management: a logistics perspective, 8th edition, South Western CENGAGE Learning, Mason, OH, USA. Croxton, KL 2003, The Order Fulfilment Process, The International Journal of Logistics Management, Vol. 14 Issue. 1, pp19-32 Esper, TL, Fugate, BS & Davis-Sramek, B 2007, ‘Logistics learning capability: sustaining the competitive advantage gained through logistics leverage’, Journal of Business Logistics, Vol. 28, No. 2, p. 57-81. Fawcett, SE, Ellram, LM & Ogden, JA 2007, Supply Chain Management: From Vision to Implementation, Pearson Education, Upper Saddle River, NJ, USA. Gates, E 2004, 'The defence firm of the future', Defence and Peace Economics, vol. 15, no. 6, p. 509-517. Mangan, J., Lalwani, C & Butcher, T 2008, Global logistics and supply chain management, Chichester, England Hoboken, NJ., John Wiley & Sons. Mentzer, J., Stank, T., & Esper, T 2008, ‘Supply chain management and its relationship to logistics, marketing, production and operations management’, Journal of Business Logistics, Vol. 29 Issue 1, pp31-46. Oakden, R & Leonaite, K 2011, Supply Chains: Logistics Operations in the AsiaPacific Region, McGraw-Hill Aust. Pty Ltd., Northe Ryde, NSW, Australia. Rushton, A. & Walker, S 2007, International logistics and supply chain outsourcing: from local to global, London Philadelphia, Kogan Page. Read More