Coordinating Supply Chain Management - Service to the Customer - Assignment Example

COORDINATING SUPPLY CHAIN MANAGEMENT- SERVICE TO THE By SCM and the notion that today the firms are links in a systemised supply chain Supply chain management (SCM) is defined as the administration of the flow of goods from their respective sources to consumers who may either be manufacturers or end users. Supply chain, therefore, is the entire process that connects all networks involved is providing goods and services. This paper will review past literature on supply chain management to help build the body of knowledge on how this entire process helps in improving service provision to customers. Until 1997, not much was known about the concept of supply chain management, but with the literature on this subject by David Anderson, Frank Brit and Donavon Favre under the title: The seven principles of Supply Chain Management, the concept gained more publicity and many scholars started producing tonnes of literature in this area. This new found interest in Supply Chain Management has allowed the concept to be extensively studied to the benefit of companies and customers across all industries. Some of the scholars who saw an opportunity after Anderson et al wrote their first piece in 1997 were Bowersox, Closs, & Cooper who in 2007 reviewed the decade old article and were in agreement that supply chains should be customer oriented. This pint of view represented the line of thought held by Anderson et al a decade earlier and opens a door into what the future holds for SCM. If over a decade earlier these scholars had seen the impact of SCM on customers and how the concept affected business, the it is fair to conclude that the article; The seven principles of Supply Chain Management was clearly ahead of itself. To address the unique customer demands within a supply chain, segmentation is necessary so that each cluster with identical characteristics is serviced in a peculiar manner that meets their uniqueness. EBay, one of the leading global online marketplaces, has adopted a unique model in its supply chain where for an extra cost, customers with need to urgent delivery are supplied within the stipulated time and the purchased products discounted. This is an indicator of how a customised supply chain helps serve global clients to the benefit of all stakeholders. A discussion by Wang, Heng & Chau (2007) stressed on sharing information on demand trends especially for organizations with business relationships so that level of stock among these companies is kept at the bare minimum. This alignment of demand and planning is a useful tool throughout the supply chain because it helps related businesses obtain real time data on regions with deficit further helping grow sales turnover while ensuring that customers are not starved of products. A scholarly work titled: Supply chain management: strategy, planning, and operation by Chopra & Meindl (2001) looks at how customization of supply chains impact customer service in organization, further building on Bowersox, Closs, & Cooper’s (2007) line of thought that segmentation is a useful tool in ensuring customers are properly served by the supply chain. According to Chopra & Meindl (2001), once customers are classified, then, each caste can have special consideration within the larger supply chain. This is a sure way of achieving efficiency and profitability alongside customer satisfaction. Another scholar, Hugos (2003) examined SCM from the perceptive of differentiation where products are released in strict accordance with each customer demand such that the same product is unique to each customer. This implies that for those products that are assembled, the process of assembly only takes effect after an order is placed and the customer clearly outlines what they expect. It therefore has the effect of suppliers not keeping complete products, but their components as they await customer directives. Certain industries like food industry however, cannot differentiate given the homogeneity of their products so they go for standardization. In relation to an efficient SCM, both standardization and differentiation help achieve the intended results with regards to customer satisfaction. The global cooperation, vertical disintegration and a focus on core activities Cooperation among global companies cannot be avoided in SCM and therefore, vertical dissolution has been seen in the global marketplace with companies choosing to focus on their core functions as their global partners play their respective roles in helping improve the larger supply chain. Poirier (1999) in his writings saw a lot of sense in global companies forging partnerships because in so doing, they have the potential of reducing operation costs while increasing their respective sales turnovers as they reach more customers within shorter duration. This line of though could not have been more practical to companies given the recent trends in globalization where particular inputs are manufactured continents away in China with the final assembly undertaken in either the US or UK. To effectively serve customers, the supply chain must forge partnerships so that the assembly process is not interrupted by shortages of inputs millions of miles away. There must therefore a specialised middle company that links these global partners; supplier-manufacturers-consumers. Apple for example, depends on suppliers from China for inputs into their many gadgets, so as they focus on design and functionality of the Macbook Air for example, their Chinese chip manufacturers also put all their effort in ensuring that these components meet the required standards. In between the two companies is a global courier, like FedEx who sole responsibility to ensure that the chips reach Apple in time and that the final product; Macbook Air, reaches stores around the world in time ahead of official launch. This is what happens when companies in the chain cooperate; each partner focuses on their core activities and lifts some burden on their associates. Current on a systematic identification of the core initiatives and constructs involved in SCM Constructs involved in Supply Chain management are anchored in the premise of the relationships between buyers and supplier because it’s from their lenses that a supply chain can be evaluated for its efficiency or lack of it. The following four theoretical determinants are a fair representative of important elements of the relationship between buyers and suppliers: a) Managerial Support: The overall organizational strategy is only understood holistically by those at the top. In as much as mid level managers may be cognizant of the larger strategy; they are more interested in achieving their departmental objectives and may not be useful in helping drive the larger supply chain agenda. Top managers have the ability to provide human resource and monetary support to help build the buyer- supplier association. Contracts that serve the interest of the organization while ensuring that suppliers remain happy can only be agreed upon by top managers. These contracts are the tools that ensure a seamless supply chain that is both efficient and customer centered. b) Environmental improbability: This construct looks into areas that bring uncertainty from both the suppliers and customer perspectives. Suppliers are always worried about timely delivery, consistency in quality and overall performance while customers are more concerned about the probability of incorrect forecasts of inputs and asymmetrical orders. Any of these concerns has severe effects on the supply chain both from the customer and the supplier and it is therefore pivotal that appropriate scientific and logical measures are adopted for a seamless process (Hahn et al. 1990). c) Customer as a focal point: The main driver of this entire supply chain is the end user whose interest must be met at all cost. As all the players within the chain execute their mandates, they should have once central objective of ensuring customer satisfaction. The new breed of consumers is one who does not compromise on quality but is quite impatient in relation to lead time. They also have very dynamic demands at whatever meets their needs today may not necessarily do the same the following day, as such, the entire supply chain must be customer centered. d) Supply policy: This is where a stratagem is crafted to include the interests of all those involved in a supply chain. According to Poirier (1999), to build supply chain distinctiveness, all the players must be evaluated for their uniqueness so that their respective contributions are areas of strength highlighted. It is, therefore, important to critically compare the players. The challenge of coordinating effectively the entire supply chain, from upstream to downstream activities Coordinating a supply chain from any direction posses numerous challenges and the following are some of the glaring problems: Self interest among partners: As each partner strives to meet their individual objectives, the larger intention may be lost and coordination becomes a problem with everyone pulling in different directions. Lack of a global picture among members: Those involved in a supply chain may only look at their functions without understanding the larger perceptive on how their contributions affect the global happenings. This limited scope makes coordination extremely challenging. Risk of supply uncertainties across regions: Because of globalization, insecurity and political turbulence in foreign countries has serious negative effects in properly handling supply chain. Bibliography Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2007). Supply chain logistics management (2nd Ed.). Boston, Mass.: McGraw-Hill/Irwin. Chopra, S., & Meindl, P. (2001). Supply chain management: strategy, planning, and operation. Upper Saddle River, N.J.: Prentice Hall. Hahn, C.K., Watts, C.A., Kim, K.Y., 1990. The supplier development program: a conceptual model. International Journal of Purchasing and Materials Management 26 (2), 2–7. Hugos, M. H. (2003). Essentials of supply chain management. Hoboken, N.J.: John Wiley & Sons. Piplani R, Fu Y (2005) A coordination framework for supply chain inventory alignment. J Manuf Technol Manage 16(6):598–614 Poirier, C. C. (1999). Advanced supply chain management: How to build a sustained competitive advantage. San Francisco: Berrett-Kochler Publishers. Wang, W. Y. C., Heng, M. S. H., & Chau, P. Y. K. (2007). Supply chain management issues in the new era of collaboration and competition. Norwood Mass, Books Read More