Understanding and Managing the Services Supply Chain - Essay Example

Article Understanding and Managing the Services Supply Chain Summary: Services have become an integral part of the American economy. It is one ofthe biggest bread earners of the economy. The industry is fast growing and has a lot of potential. Research annals on supply chain management have little to boast about literary work done on services supply chains. The article throws insight into services supply chains. Service business can find themselves at an advantage by applying efficient manufacturing practices in their processes.

The article puts into perspective the importance of creating supply management chain tools for specific service industry. Service industries are of varying nature and each industry has its own requirements. The article also documents the rising importance of the services sector and services purchasing. It highlights the things that make up the services sector and services purchasing and how to make them more efficient. Thirdly, it also talks about supply chain frameworks that are appropriate for a services supply chain.

It develops the framework by doing comparison amongst three product-based manufacturing models : Global Supply Chain Forum Framework, SCOR and Hewlett-Packard’s Supply Chain Management Model. Towards the end, article talks about various challenges that confront the procurement professionals while managing purchasing. doing research, bargaing and then zeroing down on the supplier is quiet a task. The competition is tough and they face a myriad of challenges. The best way to counter these challenges is by implementing the supply chain management theory and their best practices for improvement.

(William, 1991) Article 2: Manufacturing and Service Supply Chain Performance: A Comparative Analysis Summary: The American economy has slowly evolved from manufacturing and graduated into the services sector. Given the growing boom of services sector it is important to understand the lessons drawn from the manufacturing sector and see if they can be extended to supply chains for the service sector. The article critiques the dearth of research done on services supply chain. Most of the major research journals have focused on the manufacturing sector.

There is little data and little secondary literature to draw inferences and learn lessons from. In order to address this deficiency, the article compares the impact of current manufacturing oriented supply chain strategies on the financial performance in both the services and the manufacturing sector. It draws analogy and tries to see how the current practices affect both sectors. The results produced by the author show both similarities as well as differences between the two sectors. It demonstrates that it is not necessary for a supply chain strategy to work for both sectors.

What works for one sector may or may not work for another sector. It is possible that another strategy needs to be applied for another sector. Thus, the article highlights the importance of being focused in supply chain. The author offers various important suggestions such as identifying benchmarks, setting out competitive priorities and then going ahead with the supply chain strategies. Suggestions: It is important to consider why companies want to out-source today? They want to out-source for economic efficiencies, cut down on costs and extract bigger margins?

It can get very difficult to specify, select and control out-side service providers at times. In-order to improve services supply chain, firms should out-source to specialist firms. These firms help create a lot of advantage in scale and scope. However, these costs must be increased costs associated with financial controls, service level management, and procurement department costs. Control and management issues are very important for any outsourcing organization.. In the services industry, it important to control services when they are not visible.

Other than that, it is important for service purchases to be managed in the same way purchase of goods are managed. A centralized procurement approach should be followed in such. However, there should be enough empowerment offered to the internal users of services. They should not feel disempowered or else creativity will suffer. If they see that poor irrational decisions are being taken their motivation will disintegrate. They should be offered enough grounds for taking creative decisions. Thus the company should strike a balance beween control and accommodation of user needs.

In this type of relationship all three types of stakeholders benefit, the vendors, the customers and the suppliers. The vendors benefit from more visible control of displays and more contact to impart knowledge to employees. Consumers benefit from a well groomed and well informed staff who and are in constant contact with vendor representation whenever their service is required. (Ury, 1993) References: Ury, W. (1993). Negotiating Your Way from Confrontation to Cooperation, revised second edition. Bantam. William Ury, R. F. (1991).

Getting to Yes: Negotiating Agreement Without Giving in. Houghton: Miffin.