Supply Chain Management: Definition Of Strategic Advantage

Definition of strategic advantage

If a company or country has a strategic advantage, it has a particular characteristic or way of doing things that makes it more successful than others (Cambridge, 2015)

Definition of Supply Chain Management

The set of activities concerned with the design, planning and control of the system which manages the transmission of materials, parts, products and services into, through and out of the organization. (Sibanda, 2015)

Component Activities of SCM

 Purchasing & supply management (supply side) - the function that deals with the operation’s interface with its supply markets

 Physical distribution management (demand side) - managing the activity of supplying the immediate customers

 Logistics – an extension

This has caused experienced domestic personnel to opt for other job assignments. As a result, product quality within the supply chain has become a pressing issue. Defects and rework attributable to poor systems are raising the costs of doing business. One of the advantages of an intelligent supply chain management is that it incorporates quality techniques, such as quality management systems, to improve operations.

Inventory Buffers

In almost every type of business, there is variability in customer spending and demand is therefore constantly changing. This requires organisations to manage their inventories in a way that minimises holding costs while providing enough flexibility to meet customer demands. If inventory levels fall too low, businesses may have to pay overtime to produce products or lose out on revenue by making customers wait or shop somewhere else. Intelligent supply chain management systems typically include inventory buffer levels that are pre-determined with careful analysis of historical trends.

Shipping

Intelligent supply chain management has numerous advantages that assist organisations throughout its processes from the sourcing of raw materials to the delivery f the purchased final product to the customer. In this ever changing economic world there is need for organisation to be ahead and intelligent supply chain management is one way.

The basic advantages of supply chain management include; lower inventory costs, higher product quality and higher customer service levels. These benefits accrue if all stakeholders in the supply chain conform to the standards predetermined. With intelligent supply chain management these benefits increase. This is so because it guarantees quality, speed, dependability, flexibility and minimises costs involved of procurement, logistics and materials