The Complexity of Supply Chain - Assignment Example

Question 1 a. With globalisation taking place the world has become a small place. Today, there is intense competition and people have lot of options. This is making companies to be more aggressive and at the same time see that customer are satisfied. One of the most important thing companies are working is on improving their supply chain. This will ensure timely delivery. Since, there are a lot many options so having this in place is very important. Supply Chain Management is thus a network established between dealers, distributors, retailers, transporters and suppliers to ensure that the goods are readily supplied to the customers thereby improving customer satisfaction (Harrison & Ganeshan, 1995). Supply chain forms an important aspect of every business and it concentrates on the following three parts Supply: which ensures that the raw materials are readily available and determines the manner by which it is available (Supply Chain, 2011) Manufacturing: which focuses on transforming raw materials to final goods (Supply Chain, 2011) Distribution: which ensures the network of dealer, retailer, wholesaler and stockiest to ensure that the goods finally reaches the customer (Supply Chain, 2011) Supply chain thus focuses on the different aspect of business and helps to develop a network which ensures that the business process ensures efficiency in operations. b. Supply chain management has undergone tremendous change. Companies have moved from the traditional method which had inventory piling up to a more innovative supply chain management. The implementation of different tools has improved the demand and supply function. A research shows that organisations supply chain measurement depends upon three factors and they need to devise strategies to remove the bottlenecks present in the system for more timely delivery and better utility function. (Gray & Khalid, 2006) Despite the growth in the method of supply chain the principal components of supply chain remains the same. The components of supply chain are as follows Plan: is the basic function of supply chain and includes the entire process of supply chain, from management to the metrics to be used to evaluate the performance standard (SCM, 2011) Source: is the suppliers who will provide the required resources to the business so that it is able to process them further (SCM, 2011) Make: is where the resources are converted into finished products and services by using the various other resources available with the business (SCM, 2011) Delivery: is the process of getting the goods delivered to the customer and includes a chain of distributor, retailers, stockiest and other who facilitate the process (SCM, 2011) Return: is the process when the goods are returned by the customer or certain problems are faced by them. Businesses need to solve those and ensure that the efficiency of the entire process improves (SCM, 2011). Thus supply chain has the above component and to ensure effective implementation of supply chain it is important that all the different components work efficiently. This goes in with a study which states that to ensure that the different components or parts of supply chain yield maximum efficiency it is important to develop healthy relationship between all the departments (Lummus, Vokurka & Krumwiede, 2008). This thereby highlights that the fact that to ensure efficiency it is important to ensure that the different parts of supply chain functions efficiently. c. Supply Chain is a very complex process and requires effective management to ensure maximum efficiency. Supply Chain as a result has gained valve since it involves dealing with humans and humans have a very irrational behaviour. “Effective supply chain helps to deliver the correct product at the right time” (Krishna, 2007). Supply chain in any sector is a distinct field and companies are working to improve it. The complexity of supply chain increases because any factors could have a bearing on the final outcome. Since, It is very difficult to find out what customers prefer as their behaviour is irrational. (Abraham, 2009) Marketers need to be very alert and even a slightest of information needs to be communicated else it will result in piling of huge stocks. It is important that marketers put in their best effort and try to understand what customers want so that the product can be designed accordingly. This will ensure that the supply chain process improves and the production will be according to the market requirements. The usage of software has also resulted in improving supply chain management. The improvement in supply chain due to integration of IT with the requirements of the business has resulted in “improving the supplier chain initiative to manage the stock that the supplier will keep at retail outlets”. (Lee & Cetinkaya, 2000) The use of vendor inventory management has thus ensured that “the procurement cost for materials is low which helps in easy forecasting and ordering process”. (Lee & Cetinkaya, 2000) This thereby helps to reduce the complexity faced by business as it helps to predict the actions with certainity. An enterprise which is able to reduce the complexities of supply chain has the following advantage Reduce the inventory level thereby reducing the amount parked in working capital Timely and low cost of procurement as paper work has been reduced and ensured better management Ensured quicker and timely response thereby improving the overall efficiency of the management. Thus, improvement in the supply chain process brings about a change in which performance. To ensure maximum efficiency of the supply chain management it is important that the complexities are removed. A study shows that businesses that ate able to handle the complexities of supply chain management are able to broaden market competition, spur innovation and create new methods to solve problems (Burdon, Chelliah & Bhalla, 2009). Thus it is important that to improve the effectiveness of supply chain the complexities of behaviour is identified and steps are taken in this direction to ensure that it provides maximum efficiency. Thus, supply chain management has various complexities which arises due to human involvement and the management needs to be effective to ensure that a trade off is created which will help to bring maximum efficiency from the use of supply chain. References Abraham, T. Consumer behaviour, evolution of preference. Maastricht University, 2009 Burdon, S., Chelliah, J. & Bhalla, A. Structuring enduring strategic alliance: the case of Shell Australia and Transfield Services. Journal of Business Strategy, Volume 30, Issue 4, page 42-51, 2009 Gray, R. & Khalid, B. A logistic and supply chain approach to efficiency. Research methodology in supply chain management, Part 4, pp. 87-93, 2006 Harrison, R. & Ganeshan, T. An Introduction to Supply Chain Management. Department of Management Science & Information System. 1995. Retrieved on March 29, 2011 from http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html Krishna, J. The ICFAI University Press on Supply Chain Management. ICFAI, India, 2007 Lummus, R., Vokurka, R. & Krumwiede, D. Supply Chain Integration & Organizational Success. SAM Advanced Management Journal, 2008 Lee, C. & Cetinkaya, S. Stock Replenishment and Scheduling for Vendor Managed Inventory Systems. Journal of Management Science, Volume 46, Number 2, page 217-232, 2000 Supply Chain. What is Supply Chain? 2011. Retrieved on March 29, 2011 from http://www.wisegeek.com/what-is-a-supply-chain.htm SCM. Supply Chain Management. 2011. Retrieved on March 29, 2011 from http://www.siliconfareast.com/supply-chain.htm Read More