Benefits of Supply Chain Management - Essay Example

Supply chain management University Student Id Course Date Introduction Supply chain is mainly concerned with the flow of services and products that can include raw material and final products. Storage and transportation are crucial in the process of ensuring that supply chain management objectives are achieved through ensuring integration of activities, planning and ensuring proper communication. Supply chain management entails managing and planning activities that are involved in procurement and sourcing and the logistics. It also included coordinating the business partners that can include partners who are the intermediaries, suppliers, customers and services providers. Organizations are now creating close relationships with the customers and the suppliers aiming at improving the supply chain in the market. Through establishing close relationships with customers, an organization can be in a position to ensure that the management is aware of the interest and the expectations of the customers (Ahire, 2000). As a result, the organization can then tailor its services aiming at meeting the expectations of the customers to levels that can guarantee satisfaction. On the other hand, organizations are also ensuring close relationships with the suppliers to ensure that they are in a position to provide continuous supplies to ensure that no disruption of the manufacturing process. Besides, establishing close relationships with the supplies the organizations can be in a better position to ensure that the supplies are of the right quality. This paper is analysing the literature review concerning supply chain performance indicators and the supply chain practices. The analysis has entails two supply chain performance indicators that include supply chain quality management and efficiency. Also, the analysis involves three supply chain practices that include innovations, continuous improvements and customer relationships. Supply chain management The level of competition in various sectors has been increasing where the management of organizations are working towards establishing close relations with the clients and the suppliers. Establishing close relations need to ensure that there is trust among the parties where they cooperate to achieve some common objectives. The partners need to make sure that they share common vision with focus that is being the tactical issues. The preferences of the customers has been changing making it necessary for the organizations to ensure that they ensure a close relationship with the supplies to ensure supplies that can assists in meeting the needs of the customers. Due to the high levels of competition in the market organizations are now working towards ensuring that their products and services of high quality to compete well. In the process of ensuring competitiveness of the products the organization has to partner with the suppliers to make them committed to assist the organizations achieve competitive advantages in the market through providing high quality supplies. Suppliers do play a vital role in the process of ensuring that the organizations do supply products that the clients in the industry want. Supplying the relevant products can be the best way of ensuring that customers are satisfied hence making the organizations competitive (Anderson, 2005). Organizations are now creating alliances and partnerships with the distributors, supplier, and transportation companies among other partners ensure that they meet the market demand. The collaborating with the partners has been crucial in ensuring that the distribution of the products is made efficient and effective. This is the role of the supply chain management where an organization establish close relationships with its different partners aiming at offering its products to the market in a more efficient and effective manner. There are several factors that are forcing organizations to work together in in the market. These factors can include improvement of the exchange of information concerning the trend in the industry and customer tastes. Organizations are creating a network using communication technology that has been rapidly changing making information sharing efficient. The increasing competition in the industry has led to emergence of new resource together making it necessary to ensure that organizations do keep pace with the market changes. Failing to keep pace with the market changes is likely to make organizations irrelevant in the industry due to the failure to meet the customer need. For instance, Seashells Hospitality Group has been working towards ensuring that its services and products can meet the demand in the industry. Also, the economic recession has been affecting the sensitivity of the customer to prices making it necessary for organizations to ensure that they have a competitive pricing strategy that can make the organizations achieve competitive advantages (Arauz, 2009). This can be possible through ensuring that the operations of the organizations are efficient where the management need to work towards minimizing the costs of production. Establishing good relationship with the suppliers can assists an organization to achieve a decrease in the costs of production hence achieving cost advantages. Organizations that have cost advantages in the industry do have high chances of gaining a larger market share. This is because through low costs an organization can be able to ensure that the prices offered are low thus increasing the demand for its products in the market. Considering the fact that demand for products is said to increase with a decrease in the prices, an organization experiencing a decline in the costs of production can easily offer pocket-friendly price hence increasing its sales volume. Evaluating the suppliers is crucial in the process of ensuring that the supplier are in a position to offer supplies that can meet the needs of the customers. Besides, the suppliers need to be willing and able to ensure improvement of their capabilities geared toward meeting the requirement of the customers. It is important for organizations to ensure that they consider the various issues that do surround relationships with the suppliers that can include stability, creativity, communication, value and reliability. Benefits of supply chain management Large firms that are ensuring that they have the necessary supply chain management practices in place are realizing some certain benefits. Some of the benefits that the firms are realizing from ensuring effective supply chain management can include realizing increased revenues as they are in a position to improve the demand for their products in the market. This is because through effective management of their supply chain they can be able to ensure that the customers’ expectations are met leading to customer loyalty. Establishing good relations with the partners, organization are able to improve the quality of their products as the partners are willing and able to ensure high quality supplies that can ensure customer satisfaction. Effective supply management practices are considered important in the process of ensuring that costs are minimized hence ensuring that there is efficiency in the process of managing the costs. For instance, Mantra Group is an example of a company that has been making use of supply chain management in the process of achieving efficiency. The management of Mantra Group has been working towards achieving its cost saving goals through making use of the supply chain management. The company has established a goal of saving costs of around $260 million through ensuring improvements of the supply chain while ensuring optimization of the use of its resources (Levy, 2008). Besides, organizations can be in a position to manage the costs of operating better through ensuring that the suppliers can offer relatively low prices for the supplies. Supply chain management allows organizations to select the suppliers who are able to offer reasonable prices hence able to control the costs of production. Considering the increased levels of competition organizations are working towards realizing competitive pricing strategy that can only be possible if the organization manages its costs properly (Adam, et al. 2007). As result, the use of supply chain management is playing a crucial role in enabling organizations come up with prices that are affordable. Organizations that do adopt supply chain management do realize reduction in the product development cycle due to timely supplies. Ensuring reliable supplies can be possible through establishing good supply chain management practices that do promote reliability of the supplies. Also, the production process cannot be disrupted due to lack of materials as through supply chain management, an organization can be in a position to ensure that the suppliers are in a position to make supplies at the right time. Supply chain performance indicators Supply Chain Quality Management An organization need to be in a position to make a selection of the supply chain partner who can ensure quality. Many organizations do establish a vetting process before making a selection of the suppliers to ensure that they can supply products of high quality. For instance Ferrier Hodgson has been ensuring that standards are set that the supplier need to meet in terms of quality in order to be selected. This has been assisting the company in the process of ensuring that quality of supplies is assured. Considering the increasing levels of competition in the market quality has been considered essential in the process of achieving competitive advantages (Levy, 2008). Customers do expect organizations to offer services and products that are of high quality hence ensuring that the services products offered are of high quality is very important in ensuring that the expectations of the customers are met. Organizations are now achieving competitive advantages by offering quality services and products. Many organizations are making use of technology in the process of improving quality where the service delivery is made effective through automation of most of the operations. The improvement of the quality can be associated with the decrease in the number of mistakes as use of machine eliminate simple mistakes that are common in the use of human labour (Kuei, 2011). For instance, Seashells Hospitality Group has been automating most of its operations aiming at ensuring that the service delivery if of high quality. As a result, the Seashells Hospitality Group has managed to ensure excellent service encounter where the customers are highly satisfied by the services offered. . Supply Chain Efficiency Efficiency in the supply chain management entails ensuring that the resources that are available are optimally used to achieve the supply chain management goals. Efficiency can be achieved through ensuring that costs are managed in the organization leading to decrease in the costs of production. The major aim of ensuring efficiency in organizational operations is to achieve an increase in profits. Seashells Hospitality Group has been achieving efficiency in its supply chain by coming up with strategies geared towards ensuring that the costs of purchasing supplies are minimized (Juran, 2002). The ability of the organization to achieve a decrease in the costs of production through efficiency has ensured that it can offer competitive prices to the customers in the market. Various strategies are being employed by organizations in the process of ensuring efficiency in the supply chain management. Some of the strategies do include demand management where the market demand is assessed to ensure that the many can only purchase the supplies that are needed in the market hence reducing the possibility of wastage due to excess supplies. Besides, demand management assist organizations in the process of ensuring that some costs that are related to storage are eliminated as the organizations are buying the supplies that are needed hence helping in achieving efficiency. Also, talent management has been used as a strategy of ensuring efficiency in the supply chain management where the employees involved in the process of managing suppliers are trained to enhance their skills in ensuring efficiency (Flynn, 2005). For example, a company like Seashells Hospitality Group has been ensuring that the employees that are responsible for making procurement of the supplies are trained on the best ways of minimizing costs in the procurement process. The employees who show talents in cost management are assisted through being given more training to help the company realize increased efficiency. Achieving efficiency in the operations of an organization can be crucial in the process of ensuring that the company can adopt a competitive pricing strategy while still making profits. Reducing the costs of operating has been used by many organizations in the process of ensuring that they are in a position to adopt a pocket-friendly pricing strategy. Supply chain practices. Innovation Supply chain executives in organizations are looking for the best ways of ensuring that the procurement practices are innovative. The executives are aiming at ensuring that the market expectations are met through providing services that can make the organization competitive in the market. Some organizations are optimizing the designing of the products aiming at coming up with unique product features that can assist in surviving the high competition. Innovation is common in the organizations that are operating in industries that are competitive. This is because through innovations products are made unique hence eliminating the possibility of substitution. The supply chain management in organizations needs to ensure that there is an agreement with the suppliers to ensure that they are innovative (Browne, 2003). The supplies which are innovative can assist the organizations in making the products innovative where the organizations need to ensure that they communicate the level of innovation to the suppliers. Innovation is an important practice in the supply chain management where organizations are using innovative ways of delivering services and products to the customers. Organizations that are innovative in their supply chain practices are likely to achieve competitive advantages in the market through coming up with products that can meet the needs of the customers better. Customer relationships Organizations that do ensure that they have established good relations with the customers are likely to ensure customer loyalty. The process of establishing a good relationship with the customers is mainly achieved through ensuring that there are effective, efficient communications to the customers. Many customers are looking for the organizations that can guarantee proper communicating where they can be able to give their suggestions on the product development. The organizations that do engage the customers in the process of developing new products in the market are likely to ensure good customer relations where the interests of the customer can be considered in the process of developing the products (Carter, 2004). As a result, the products can meet the expectations of the clients hence becoming competitive. Organizations that do fail to engage the customers are likely to offer irrelevant products that cannot meet the interests of the customers. Organizations do manufacture products to sell to the customer hence ensuring that the customers are involved in the product designing process of crucial (Ahire, 2008). The organizations that have established good relations with the customer are likely to ensure that they gain access to the taste of the customers hence tailoring the products to meet the changes in the taste. Organizations are establishing customer relationship management systems aiming at ensuring that the customer’s preferences are known. Besides, the customers are given a chance to assess the performance of the company products in the market hence making the organizations come up with the necessary strategies to ensure customer satisfaction (Forker, 2007). Organizations can make use of supply chain management to ensure that the relationship between the customer and the company is improved through ensuring that the supplies can meet the interests of the customers. It is crucial to ensure that the organization do conduct research and encourage customers to give their opinions concerning the services and products of the organization. Continuous Improvement Organizations make use of supply chain management to improve the products through partnering with the suppliers to keep pace with the changes. The supplies are expected to ensure that the supplies can meet the market expectations by keeping pace with the market changes. Organizations can then ensure that change the operations to meet the needs of the customers through ensuring continued improvement of the products aimed at making the products relevant in the market. Continuous improvements of the products can be achieved through ensuring that the practices of the supply chain management are aligned with the organizational goals (Bentler, 2010). The products can then be tailored towards achieving the set goals where the management of the organizations need to ensure that the suppliers are properly engaged in the process of ensuring continuous improvements. Some of the strategies that organizations can employ in the process of ensuring continuous improvements can include conduct research aimed at assessing the performance of the products in the market. The organizations can then make the necessary adjustments depending on the response of the customer in the market concerning the products. New product features can be added in the process of ensuring that the products can meet the market demand (Choi, 2008). For instance, Ferrier Hodgson has been conducting research concerning its products in the market to assess the performance of the products in the market and make the necessary improvements. As a result, the company has managed to ensure that its products are competitive through meeting the market needs. Conclusion Supply chain management practices are dynamic due to the changes as new markets are opening and new products entering the market. The increasing issues of innovation in the market are affecting the operations of organizations making it necessary to ensure that the supply chain practice is innovative. The innovativeness of the organizations is the supply chain practices can be possible through adopting the technological changes taking place in the market. It is through the innovations that the needs of the clients can be best met and organization achieve efficiency. Innovations are part of change that needs to be properly handled in the process of ensuring that organizational objectives are achieved. The top management of the organization has to show commitment to adopting a change in the organization where management has to support the partnership. The change management strategies need to be formulated by both partners to ensure that they are all committed to implementing the changes in their operations. In the process of implementing change ensuring proper communication among the partners is crucial in ensuring successful implementation of the formulated strategies. However, there is the need to make sure that the information that is considered confidential and sensitive is only shared among the relevant partners. Before entering into a partnership with the suppliers, it is important to ensure that the suppliers are evaluated using measures such as delivery times, quality, flexibility and costs. References Adam EE Jr, Corbett LM, Flores BE, Harrison NJ, Lee TS, Rho BH, Ribera J, Samson D, Westbrook R, 2007. An international study of quality improvement approach and firm performance. Int J Oper Prod Manage 17:842–873 Ahire SL, Dreyfus P, 2000. 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