Evolution of supply chain management - Assignment Example

?Supply chain management Explain the evolution of supply chain management and its growing contribution to business objectives: ? describe and analyze the stages in the evolution of supply chain management ? evaluate supply chain strategies and assess the contribution they make to the achievement of key business objectives Supply chain management had six main stages of evolution. They are as follows: a) Creation era – in the early 1980’s the term supply chain was connoted. The creation era was characterized by the need for reengineering, large scale changes, and downsizing driven by cost reduction goals. b) Integration era – the integration era marked the use of Electronic Data Interchange (EDI) systems and Enterprise Resource Planning (ERP) systems. This era stressed on value added and cost reduction supply chain management through integration. c) Globalization era – the globalization era was characterized by the emergence of global system of vendors and suppliers and the expansion of supply chain over national and international boundaries. In this era, organizations aimed to attain competitive advantage by creating value added services and products. At the same time, it aimed to reduce costs through global sourcing. d) Specialization era (Phase I – Outsourced manufacturing and distribution) – this era saw the creation and development of the specialization model which composed of numerous individual supply chains specifically for products, suppliers and customers who worked together to manufacture, design, market, distribute, sell and service a particular product. e) Specialization era (Phase I – Supply chain management as a service) – the commencement of warehouse management, transport brokers and freight carriers has matured into the aspects of collaboration, supply planning, performance management and execution. All this was possible due to the breakthroughs achieved in technology. f) Supply Chain Management 2.0 – this terminology was coined to explain the changes within the supply chain industry and the evolution of methods, tools and processes used to manage resources now. It is very important for an organization to develop supply chain strategy as it creates value for the organization. The first step is to develop a supply chain strategy. For this the first step is to understand the business strategy. If the business strategy is to reduce costs, then the supply chain strategy must be developed to support the same. It is important to find out supply chain competencies and leverage them for the benefit of the organization. The next step is to access the extended supply chain. This is attained by conducting a realistic, detailed monitoring of capabilities existing within the firm and the extended supply chain. Once the assessment is complete it is very necessary to prioritize and review the recommendations, define the risks, validate the opportunities and the requirements for implementing the supply chain strategy. 2. Explore strategies used by organizations to develop and maintain effective supplier relationships: ? determine suitable strategies with regard to the development of relationships with suppliers, using appropriate web-based technologies ? evaluate the effectiveness of strategies used by an organization ? devise effective systems for relationship maintenance The breakthroughs achieved in web-based technology have made us realize the importance of information exchange that can play a vital part in the competitive strategies adopted by different organizations. It is possible to maintain good business to business and business to consumer supplier relationships by means of web based techniques. Extensive telecommunication networks are used to develop and maintain effective supplier relationships. Electronic trading is one such method which has effectively helped to maintain vendor relationships (Croom 2000). Another web based technique used to maintain effective supplier relationship is that of electronic warehouse management. It is now possible to inform a client well in advance as to when goods may be delivered to a certain warehouse and accordingly fix a tentative slot for receiving the goods. Also it is possible to maintain many suppliers by the help of online networking sites, internet, intranet and e-mail. Effective supply chain management strategies help an organization to benefit in achieving their goals. Firms which have successfully established effective supply chain management have benefited in numerous ways. Most of them have attained the objective of cost reduction, increased productivity and profitability, increased technological innovation and enhanced organizational competitiveness (Elmuti 2002) Implementing web based technologies into supply chain management has also helped to attain speedy procurement of goods and services. This has lead to overall customer satisfaction and a proper coordination between the manufacturer, supplier and the customer. Nowadays it is very important to maintain relationships with multiple suppliers. This helps one to gain a competitive advantage and also help in cost reduction. There are various ways in which firms maintain relationships with suppliers. a) Effective communication is one of the most effective ways to do so. b) Firms invest in the operations of its suppliers. c) It may conduct periodical visits to the supplier’s site to provide guidance on improving performance. d) It may promise increased business as a performance incentive. e) It may provide suppliers with regular feedback (both positive and negative). f) Implementation of an information sharing program. 3. Investigate how web-based applications contribute to the full integration of the supply chain: ? evaluate how web-based technologies may assist integration of different parts of the supply chain/network ? demonstrate how web-based technologies have contributed to the effective management of the supply chain in an organization and evaluate its effectiveness in this The supply network consists in effective coordination between the manufacturer, supplier and end user. The breakthroughs attained in web-based technologies help in effectively integrating the different parts of the supply chain. Supply chain connectivity implies a firm’s capacity to use web-based technology and information technology to collect, analyze and disseminate data which is needed in the decision making process (Fawcett et al. 2011). With the introduction of web based technology, it is possible to share information on supplier and customer needs. Web-based techniques like internet, intranet and other online programs help to speedily gather, organize and share information among key players in the supply chain process. Intranet is an effective tool which helps to integrate inter-organizational supply chain. Other than this, internet also helps in effectively developing and maintaining supply chain networks. It is possible for all elements of the supply chain to effectively design market and sell a product or a service online. There are many online sites which help in effectively tracking the shipment of goods. By employing such means, all parties of the supply chain may benefit. Web tracking tools helps such processes by effectively tracking the status of the same. Hence, technology does help in effectively integrating the supply chain network. Take the case of online warehouse management. Manufacturers need to supply goods to suppliers who in turn sell them to customers. However, goods need to be delivered to the suppliers and this is where the concept of warehouses comes into picture. In case of goods being dispatched to international destinations, they need to be delivered at a particular warehouse. The supplier needs to pick up the products from this particular warehouse. Nowadays, it is possible for manufacturers to book a warehouse online. They can do this by estimating the time taken to ship the product from one place to another. Once the product reaches the warehouse, it is the responsibility of the supplier to deliver the product to the customer or end user. Web-based technology has also aided in tracking the status of the goods online which makes it easy for all parties involved in the supply chain process. 4. Investigate the effectiveness of systems, policies and processes for web-based transactions: ? evaluate the policies, strategies and systems used by an organization for web-based transactions Supply chain management policies, strategies and systems have undergone tremendous changes after the inception of web – based transactions. Now the policies have been made considering two aspects – one is customer service. The second aspect is cost reduction. Firms are trying to provide better customer service at a cheaper cost and in order to attain this objective the entire supply chain management process has been developed. The rise of web – based technologies has given rise to self – service (Lusch 2011). This is a concept where people go through online manuals and get their service requirements on their own. This is a way of cost reduction both on the part of the manufacturer, supplier and the end user. Also there is a dedicated customer service department who can guide the end user or the customer to use a product or a service accordingly. The second process change is that of faster output. This is acquired by getting things done through web – based techniques. It is possible to check the status of a product or a service online right from its inception to its completion. Customers have their own sets of demands to be fulfilled. For example, they may require a better product which is cost effective and also does not take much time to deliver. Web – based technology makes this possible. Nowadays products can be purchased online and the exact time period to deliver the product is also mentioned here. The policies and terms & conditions are also mentioned before purchasing the product. In fact, a customer can go through an entire description of the product or service before taking the delivery. Firms and suppliers also provide after sales service. This may be provided directly by firms or may be outsourced. There is a dedicated customer service team who is responsible to solve complaints or any other needs of the customers. It is possible to provide feedbacks online and also to lodge a complaint online. All in all, the entire policies, strategies and systems relating to supply chain has altered due to the breakthroughs achieved in technology. These policies have been made so as to foster cost reduction and also provide excellent services to the customers. References: Croom, S R, 2000, ‘ The impact of web-based procurement on the management of operating resources supply’, Journal of Supply Chain Management, vol. 36, no.1, pp. 4 – 13. Elmuti, D, 2002, ‘The perceived impact of supply chain management of organizational effectiveness’, Journal of Supply Chain Management, vol. 38, no.3, pp. 49 – 57. Fawcett, S E, Wallin, C, Allred, C, Fawcett, A M & Magnan, G M, 2011, ‘Information technology as an enabler of supply chain collaboration: A dynamic – capabilities perspective’, Journal of Supply Chain Management, vol. 47, no.1, pp. 38 – 59. Lusch, R F, 2011, ‘Reframing supply chain management: A service-dominant logic perspective’, Journal of Supply Chain Management, vol. 47, no. 1, pp. 14 – 18. Read More