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In this competitive world every organization is striving hard to be at the top in its own field. The competition in the business environment has become intense. The winds of change are blowing in purchasing and supply. And it is one of the areas that the organisations look into for achieving competitive advantage. The changes in conformance quality standards, JIT approaches to material availability, long term relationships with fewer suppliers and a win-win approach to negotiations have helped organisations to survive and succeed in a very competitive world. It's every organisations dream to have a low cost supplier and a low cost service provider to its customers. In this changing world of competition, globalisation, innovation and technology all organisations are thriving to re-engineer their business processes to achieve a competitive edge over others. These changes have led the organisations to cost effectiveness aspect in every department of business especially supply, purchasing, distribution and management. In terms of tough competition organisations offer similar products in terms of quality, price and features. Customer service differentiation can provide an organisation with a distinct advantage over the competition. The level of service provided to functions such as marketing and production affects the organisations ability to serve the need of the customers. The organisation can achieve competitive success if they satisfy the customers through their services effectively and efficiently. This is achieved if they are capable of retaining their customers. A greater customer satisfaction is achieved by a superior service provided by the organisation. This is achieved if the business functions are well defined and are supported by other functions. This report gives an insight about the various aspects of supply chain management and operational management and also the important strategies involved. It also explains the importance of managing the supply chain in the business perspective. v Before proceeding further its important for us to know what supply chain is and what supply chain is about? Supply chain: In an industrialized or non-industrialized society goods are physically moved from production area to the service area. This exchange takes place when there is discrepancy between the amount and type of goods available and the goods needed. If there is surplus amount of goods in organisation that someone else needs, becomes a basis for exchange. This gives rise to channels where there is an exchange between producers and consumers. The alignment of firms that bring products and services to market is called supply chain.
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
All business are in need of supply and understanding the function that is necessary when developing a business can help gage the physical input of the quality and the overall functionality of the supply role. Having the right factors in supply can give us a better understand of the timing and quality. For example, to help stream line the quality of supply companies must set guidelines and performance meters to ensure the productivity and investments. This allows for less risk in knowing the av...
Today’s world competition is very strong in every kind of businesses. Every organisations must provide high quality products or services in order to survive, however their competitors also providing the same or comparable products or services. An important way to an organisation to get an edge over its competitors is to provide extra service to satisfy and delight their customers, which can retain them and also gain new customers. Therefore the achievement of customer satisfaction must be a major objective in all organisations.
“Supply chain. Product life cycle processes comprising physical, information, financial and knowledge flow or movements whose purpose is to satisfy end-user requirements with physical products and intangible services from multiple, linked suppliers.” In other words, supply chains compose a network of different companies that cooperate closely for goods delivery.
Supply chain management is basically refers to the fundamental supply chain analysis of the organization which predominantly describes functionalities from source to the delivery point. In this process of delivery, supply chain management framework divides in four categories: In Planning the products and suppliers evaluated and selected, Sourcing pull the information process including contracting, ordering and expediting, Moving is a physical process from suppliers to end user and Paying is the financial process including payment and performance measurement.
‘Supply chain management integrates supply and demand management within and across companies. It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thir- party service providers, and customers’. (Web: Council for Supply Chain Management Pr...
Today for large multinational corporations (MNC) to build or retain their competitive advantage requires effective methods in managing the global supply chain in order to assess their raw resources, inventory supplies and factory productivity. MNC look to global sourcing for several reasons including: scarcity or high cost of local raw materials, low cost of labor in developing countries, and to increase market share into new geographical areas. Effectively managing the global supply chain is quite literally the lifeblood of an MNC that produces goods to be sold around the world.
Lean manufacturing and just-in-time processing are great business strategies that can severely stress a supply chain. The supply chain and supply chain management is a critical operations management element for any major company to succeed and remain competitive in the global market. The supply chain is one of many pieces critical to maximizing value to the end customer and requires close management to minimize external impacts. If a company is relying on another company to supply the raw materials needed for their production line, then impacts to this other company could impact their supply chain. Careful risk management is needed to optimize performance. As a company expands into global markets and global suppliers, this risk and management challenge is multiplied. The global nature of the company could impact important activities such as transportation, funds transfers, suppliers, distributors, accounting and information sharing. Disruption to the supply chain can significantly reduce revenue, cut market share, inflate costs and threaten production. A major disruption would have obvious impacts to profit, but could have additional intangible impacts to the credibility of the company if products are not delivered on time.
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
Also the objection to meet high customer service has depleted a company’s capability to separate itself from its competitors. These factors help find new and different ways in creating a competitive advantage for a company.
Effective supplier selection plays a crucial role in creating a competitive edge for an organisation and in ensuring an optimistic outcome on its performance (Chin-chun, Kannan, Leong & Tan, 2006:217). Supplier selection is used in most industries to try to pick out the most valuable supplier for an organisation. This aspect is said to be one of the most important phases in the purchasing process (Johnson, Leenders & Flynn, 2011). Supplier selection does not only deal with finding the best service, the cheapest prices or the fastest deliveries (Johnson et al., 2011). It provides the organisation with the knowledge to provide the most optimal supplier (Johnson et al., 2011). Choosing a good supplier has a major impact on whether
Purchasing process is the process of buying the right material, at the right quantity, at the right moment, at the right price and from the right supplier ( Heinritz et al, 1986). It can also be defined as the way an organisation behaves towards it suppliers, as suppliers are the pillar of strength for all organisations at large. According to We...
Potato chips also called as potato crisps were invented in the year 1853 by Native American George Crum. The story behind the invention goes like this. George was employed as a chef at an elegant resort in Saratoga Springs, New York. One dinner guest felt George’s French fries too thick for his liking and rejected the order. In order to rile the guest Crum decided to make fries too thin and crisp. But seeing the browned, paper thin fries the guest was overjoyed and other guest present there also started requesting Crum’s potato chips. There after potato chips began to appear on the menu as Saratoga chips, a house specialty (John E. Harmon). From then on potato chips went on to capture the snack market.
In all, supply chain operation management has helped many global companies in handling and distributing their products as it is a one-stop solution provider from one warehouse direct to end user. By building trust among the trading partners with effective communications would improve performance metrics both the company and the solutions provider.
(2014) deduced that procurement performance can be assessed by focusing ondelivery,flexibility, quality, cost and technology. Optimal performance attainment is dependent onhow current suppliers`relationships aremanaged so asto ensure constant availability of needed quality supplies at the organization. This will ensure that sourced materials are indeed procured at the right costand atthe right time. Procurement performancestrives toenable improvements in the procurement process at the organizationso as to improve on qualitydelivery of firm products and servicesatleast possible time and