A CONCISE OVERVIEW OF SUPPLY CHAIN

The present day market is marked by several uncertainties and unrests that appear to remain ever increasing due to certain prevailing reasons. Moreover, the ever dynamic customer’s demand in virtually all the industrial sectors seems to be increasingly elusive more than ever recorded in the time past (Lockamy & McCormack 2004).

Having established the above fact, a pressing question is; why are there uncertainties and unrest in the present day market? Could this be as a result of the globalisation of markets, or as a result of the growing liberalisation of economies? Apparently, these economic conditions to a larger extent as supported by (Nenni et., al. 2013), have culminated in the growing competitiveness and volatility in the modern market hence, have heightened the need for organisations to engage in supply chain process evaluations and advancement through efficient and effective supply chain processes for superior business performance. This supports Harland (1996) research that agrees that supply chain incorporates many angles, which requires lucid concepts for proper understanding.

So what is supply chain? A supply chain is a system or structure of activities, organizations, people, information, and resources involved in transforming raw materials into finished goods and then transporting them from the manufacturers to the end-users (Anna 2006). So literally, a supply chain is how a product gets from where it was manufactured by the manufacturers to where it will be consumed by the consumers.

This process of goods transformation as supported by McCormack and Kasper (2002), requires planning, designing, and regulation of the flow of material, information and finance along the supply chain to ultimately satisfy the ever-changing customer’s needs. When one envisages of all the products sold at the markets, online stores, supermarkets and shops, companies somewhere in the world produce them. However, a vital concern is how do these products most effectively move from the point of production to the final point of consumption? Researchers suggest that supply chains have become a vital segment of the international business prospect for decades hence the ultimate need for efficient and timely circulation of goods that stream across the entire supply chains (Gereffi & Lee 2012). A supply chain therefore involves all the activities and systems that either directly or indirectly deals with customer’s demands such as sourcing, transforming, processing, supplying, transporting and consuming.

To achieve these goals, businesses have assembled structures for sourcing of raw materials, conversion of materials into finished products or creating services, storing and evenly distribution of same products to customers and consumers (Krajewski, 2002). Organisation’s supply chain is liable for its achievement or losses that has resulted in the need for a proper regulation and coordination amongst supply chain associates (Lockamy, A. & McCormack, K. 2004).

Over the past years, in an attempt to advance the long-term efficacy of the supply chain, Madhani (2013), agrees that many organisations have collaborated with other supply chain members for efficiency. This concept has resulted in achieving maximum customer satisfaction and company’s profitability. Throughout the entire supply chain, timely and accurate information on basic status reports and operational metrics such as demand, supply, inventory, forecasts, production, procurement, logistics, shipment plans, work in progress, yields and backlogs ought to be easily accessible by the main supply chain members for effective planning and re-planning purposes. Thus, there are utmost needs for proper management and timely updates to the parties utilising the data.

The quest to satisfy the rising requirements of supply chains led to the advent of supply chain management. In the 1980s, supply chain management (SCM) was established to address the need of consolidating the indispensible business processes from consumers through the suppliers that provide information, products and services which add value to customers and the various companies stakeholders. The brain behind SCM is that organisations and companies associate themselves in a supply chain network by interchanging information about varying market conditions, variations and production abilities.

According to Madhani (2013), there is a significant relationship between effective supply chain management and efficient customer response, a management idea that deals on how to collaborate in retailing industries with the sole aim of ensuring maximum customer’s satisfaction. Industries in the supply chain such as suppliers, intermediaries, logistics and transportation providers must communicate and interact properly to ensure meeting up with customer’s expectations effectively (Simatupang & Sridharan 2006).

Companies become dependent on each other and must collaborate in supply chain network to coordinate their activities. Mentzer et al., (2000) agree that limited attention has been rendered towards obtaining the features that represent different areas of collaboration. This according to Min & Yu (2004), highlights why it is important to understand the aspect of collaboration which if neglected can lead to distortion in information sharing and inappropriate replenishment of products that lead to inefficiencies and low supply chain dynamics (Ahmad & Ullah 2013).

Council of Supply Chain Management Professionals agree that supply chain management involves the timely planning and management of all the activities involved in sourcing, transformation, procurement, transportation and circulation of products to the end-users. These processes necessitate proper coordination and collaboration amongst the supply chain network such as intermediaries, suppliers, service providers and customers. Basically, supply chain management is considered to be a business philosophy that addresses all facets of business activities with the aim of working consistently with both customers and suppliers to remain competitively advantageous.

Having established what supply chain is all about, many might think that this business area is a hitch-free one. Studies have it that managing supply chains in the present-day competitive world are becoming increasingly challenging. With the increasing demand and supply uncertainties, globalisation of the market, market competitions, varying product life cycles, technological complexities, non-compliance of supply chain network and logistics issues have led to greater exposure to insecurities in the supply chain (Christopher et.al., 2002).

Product and technology life cycles have lessened significantly and competitive product additions make life-cycle demand difficult to forecast. Previously, competitions in many industries have been largely dependent on key assets, scope and investments with the capacity to utilise these assets however, Day (1994), support that competition is presently dependent on the intellectuals, skills and capabilities expressed through organizational processes.

Moreover, the susceptibility of supply chains to the growing upheavals and disruptions has greatly increased. These disruptions are not only dependent on natural disasters, wars and strikes but also dependent on the changing business strategies. Many companies have encountered various challenges in their supply chain due to changes in their business models such as difficulties in sourcing of raw materials, adoption of lean practices, adoption of agile practices, the migration to outsourcing and the tendency to minimise the size of the supplier base.

Integrating successful supply chain management scheme leads to a new cadre of competition in the international market. Here, competition is no longer dependent on company versus company level but on a holistic supply chain network thus, if all the relevant information is available to the participating parties then there will be proper optimization of the entire supply chain rather than sub-optimization based on a local activities. This will lead to effective production and distribution that can reduce costs and generate a more lucrative final product for higher sales and superior results for companies.

Conclusively, for organisations to remain competitively superior in the present day dynamic market ought to develop strategically aligned capabilities not only within the company itself, but also among the organizations that are part of its value-adding networks. Also, how can companies efficiently determine what their customers need at a certain point so as to competitively remain superior? According to Ahmad & Ullah (2013), building a long-term close customer collaboration plan is advantageous in making things fall into place.

This minimises the risk and chances of customers choosing other cheaper suppliers as a result of the established benefits derived by the customers such as just-in-time delivery, lower quality control cost and high quality products.For all these processes to be satisfactorily accomplished, efficient supply chain strategies utilising data must be established to attend to the changing needs of the market and then aligning them with technology to deliver maximum customer satisfaction while concurrently delivering the greatest share value to the shareholders.

This supports Cousins et al., (2008) contribution that considerable attention must be paid towards buyer-seller relationship, not only the aspects of performance but on the holistic financial performance as well.

Responsive Supply chain (RSC)which is very vital for success in the global supply chain network that incorporates all the activities of managing a company to address the challenges of supply chain is very vital for competitiveness (Fang Du et., al. 2009). Here, market intelligence and knowledge is utilised to exploit meaningful opportunities in a very competitive and volatile market.

Companies ought to be proactively responsive to any changes in the market by capitalising their strength on such changes to create new concepts and opportunities hence increasing customer’s satisfaction and performance of the company. Strategic planning is a strategy that considers the long-term plan of a company in mapping out acceptable operational and business policies and procedures. Fang Du et., al. (2009) support that information Technology plays an important role in the supply chain network as global competition has pushed companies to elect extended Enterprise in the supply chain framework. Such ERP systems include; Oracle, SAP tools which to a larger extent has contributed immensely in responsive supply chain and must be put in place for communication improvement and continuous flow of goods and products along the value chain (Gunasekaran et al 2006). Christopher & Lee (2004), suggest that participating supply chain parties should adopt an improved end-to-end visibility which boosts confidence in accordance to the quality of supply chain information for competitiveness.

REFERENCES

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