Disadvantages Of Supply Chain Management

Supply chain management can become another tool for improving the company’s performance. It is especially advantageous in the case of financial activities, as it has been proved that the companies that learned to exploit it effectively as well increased their revenues, became more competitive, and gained more customers. The concept of supply chain refers to the whole set of activities that the company conducts to reach its consumer and supply them with the final product or service. It is believed that before the customers receives their good, it travels through the competence of various departments of one or even several organizations that are interconnected and work for the convenience of the client. It is where the word ‘chain’ comes from to the phrase. Except for the goods, the company might want to transmit information, funds, people and other similar assets through the supply chain. That said, supply chain management is about trying to monitor and turn it into the needed direction. What is specific about this type of management is that it as well controls funds. So, when there are cases in which the company receives extra revenue or has some savings, they can be redistributed and shared

That said, outsourcing is about changing internal suppliers of goods and services with the external ones who might offer more beneficial conditions of cooperation, prices or provide the company with the needed knowledge (Meredith & Shafer, 2013). It is another source of benefit of the supply chain, especially in the cases when the company works on temporary or experimental projects, so, it is better to involve outer employees that teach the existing ones. However, there should be constant control over outsourcing, as it may hollow out the company, i.e. use its technologies for producing the good under its own brand. As of offshoring, it is going overseas to find the best conditions for