Supply Chain management essay PDF

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Supply Chain management essay with lecturer feedback...

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This essay is about supply chain management and how it can be defined through key elements. Unlike the term ‘supply chain’, supply chain management (SCM) has many different variations of definitions, according to the Council of Supply Chain Management Professionals (CSCMP) , supply chain management can be defined as ‘the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole’. Throughout this essay I will highlight how SCM expands beyond logistics framework and the issues presented by globalisation, how organisations meet quality expectations of customers through competitive advantages and how organisations use SCM to add value to their product.

The definition as stated above, highlights the two key ideas of information and physical flows, and how these flows meet the needs of the end customer. It clearly shows how although logistics is a significant factor, it is the base framework of supply chain management. SCM builds on the logistics framework with the goal of effectiveness and efficiency through every stage of the supply chain pipeline. Well executed stage management not only manages both upstream and downstream

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relationships well, but also allows the organisation to deliver a superior product and/or service, while at the same time reducing costs at every point of the pipeline to ensure that profitability is high for the organization while maintaining high value for the consumer (Cooper, Lambert & Pagh, 1997). Whilst this discussed practise is of significant importance to creating and maintaining a successful supply chain, factors such as globalisation create significant impacts on how well the firm can execute it. With modernisation of governments and the rise of trade agreements, an obvious pattern in reduction of barriers to entry can be seen, allowing for products to enter markets with reduced costs. However, a significant issue here, and one that especially relates to New Zealand, is the increased competition. Entering foreign markets not only raises barriers such as cultural differences and time zones, but local or longer established firms which often have a competitive advantage over a new organization entering the market. This highlights how important it is to have well executed supply chain management in order to compete on the international scale and create value for the consumer, whilst also being able to maintain positive growth and economic benefits for the organization (Thomas & Griffen, 1996).

As discussed above, value creation throughout the supply chain is vital to the success of an organization, the use of strategy is one way this can be ensured. Organizations should identify their core competencies throughout the supply chain so that each member of the supply chain is able to determine how it will deliver a differentiated and valuable product to the end customer (Li, Ragu-Nathan, Rao, 2004). This strategy allows the organization to gain a competitive advantage against competitors, and is what encourages customers to buy a certain product over another. This area is where organizations should be implementing marketing

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functions to create value, these areas include: cost, delivery, flexibility, innovation and quality.

Whilst quality can generally be defined as ‘the standard of something as measured against other things of similar kind’, in SCM there can be two viewpoints of quality. From a management viewpoint quality can be defined as how the product or the service corresponds to their specifications, however a customer would define quality as how the product has met or exceeded their expectations. A key factor of successful organizations is the recognition that their product needs to meet customers’ quality expectations, and henceforth the use of strategies to ensure this can clearly be seen. Achieving a successful quality strategy requires the organization to have a ‘process-based’ management, which is a collection of processes which are managed to achieve a desired result, or in SCM allows the organization to produce a solid foundation in the supply chain pipeline (Li et al, 2004). This collection of processes promotes co-ordination between every member of the supply chain decreasing the risk of inefficiency as a result of organizations working independently. The concept ‘competitive advantage is created and sustained through a highly localized process’ has been thoroughly implemented in all successful supply chains and documented throughout academic journals from the likes of Sharma and Khandekar, Marien and Porter.

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Leading on from quality strategy to meet customer quality expectations, organizations also place significant importance on delivering value to the final customer. Due to the increasing cost and complexity involved within the supply chain, a movement from in-house SCM to third party logistics (3PL) has been largely increased over the previous decade. As previously mentioned, organizations identify their core competencies as part of quality strategy, however this is not only has great benefit for quality results, but it also enables the organization to create value by outsourcing their supply chain management. Out-sourcing provides many benefits to the organization, it not only increases value by cutting costs and allows the organization to take advantage of its scale of economies, but the 3PL brings a different perspective, knowledge, experience and technology that the organization may not possess – providing a positive outcome related result (Li, 2012). A study undertaken by Transport Intelligence (Manners-Bell, 2012) showed that approximately 85% of logistics managers in manufacturing and retail sectors outsource elements of their logistics to a 3PL provider. The main reasons for this were cost savings and the ability to gain specialist expertise. This study shows how 3PL have both value-adding properties aswell as quality strategies, which are not only recognized by successful organizations but are thoroughly used with the outcome of creating a high quality and value-added product.

This essay has explored the theory of supply chain management and the key elements of this theory. A major theme throughout this essay has been organizations recognition of meeting customer expectations both in quality and value, and how using strategy allows the organizations to meet these expectations.

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References

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D.J. Thomas & P.M Griffen (1996) Co-ordinated supply chain management. European Journal of Operational Research. 94(1) 1-15

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Li, L. (2012) Managing Supply Chain and Logistics : Competitive Strategy for a Sustainable Future. Singapore: World Scientific Publishing

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M.C. Cooper, D.M. Lambert & J.D. Pagh (1997) Supply Chain Management: More than a New Name for Logistics. The International Journal of Logistics Management 8(1) 1-14

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Manners-Bell, J. (2012) Global Logistics Strategies: Delivering the Goods. London, United Kingdom: Kogan Page LTD.

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S. Li, B. Ragu-Nathan, T.S. Ragu-Nathan & S.S. Rao (2004) The impact of supply chain management practices on competitive advantage and organizational performance. Omega: The International Journal of Management Science. 34(2) 107-124

Word count excl. references: 1002

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AA comments: This essay is a sum of the parts. You have used inappropriate sources and have not tackled the question set. Hence, you got yourself sidetracked into looking at quality. Why you didn’t use text books – or at very least the resources on Stream is beyond me. For the 2nd assignment, you may wish to adjust your approach. Mark: 40%

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