Business Improvement - Essay Example

The nature of supply chain may vary across industries and products. The supply chain network is highly engineered as it exploits economies of scale, JIT, outsourcing, strategic inventory. With the use of advanced technology in supply chain, this paper will discuss how “the quality of a firms supply chain performance can mean the difference between business prosperity and failure” (Gattorna, 1998). Logistics is a practice to determine how to move people and materials most efficient between the source and the destination.

Chain is used to describe the various companies connected loosely, connected for the most efficient economical delivery of a product (Aghazadeh, 2004). Information about products and services can easily be linked which facilitates the supply chain management. Chalasani & Sounderpandian (2004) describe supply chain as a network of collaborating partners who collectively engage in activities such as procurement and transformation of materials into products, and distribution of products to customers.

The figure below describes the collaboration between the suppliers, manufacturers, distributors and the customer in a supply chain management system (SCM). Kaufman describes supply chain management as to … “remove communication barriers and eliminate redundancies through coordinating, monitoring and controlling processes” (Kaufman cited by Power, 2005). Zeng et al cite Lee (Table 1), who points out that supply chain integration constitutes the following three dimensions: information integration, coordination, and organizational linkage.

The supply chain concept originated in the textile industry with the quick response program and then to efficient consumer response in the grocery industry. In the 1990s as competition increased, companies became specialized, they started searching for suppliers who could provide low cost quality