Supply chain management - Essay Example

1). This paper will discuss what a supply chain is and how managers can effectively and efficiently generate positive integration and response of its operations and services. Porter and supply value analysis Michael Porter (1980) posited that there are values required in the operational chain of an organization or an industry to attain certain competitive leverage and advantage (p. 12). Porter suggested that evaluating the internal dynamics and activities of an organization will add more value to the supply, product, and services cost-efficiently—targeting that this will gain marginal value for products or services (Porter, 1980, p.

20; Fawcett, Ellram & Ogden, 2007, p. 15). If the business operations, marketing, sales, and systems are smoothened, it is expected that the company will gain marginal value for these products and services (Gadde & Hakansson, 2001, p. 1). This precluded the fact that the company is able to strategize and identify the targeted market where their products and services can be delivered satisfactorily and in less cost (Porter, 1980, p. 20). Experts contended that if managers are able to concretely apply the supply chain analysis well as a power tool for strategic planning, the administrative and organizational model can be applied and be extended in the entire supply chain and distribution networks (Porter, 1985, p. 3). Thus, it must be understood that the successful delivery of product and the ensuing economic reward it can generate for the organization (Porter, 1985, p. 3). Business strategists likewise opined that the best possible value can only be attained if the relevance of the processes in all stages is valued and if proper synchronization of all related activities is also logically synchronized (Hugos, 2006, p.

1; Christopher, 2005, p.20; Gadde & Hakansson, 2001, p. 10). Porter (1985) cited an example of the application of value chain analysis led by a manufacturing industry. The company acquired raw materials and optimized them in the production of a certain product deemed useful and demanded by the market. The company network with retailing industries and presented the products conveniently to targeted customers either through advertisement or any form of rigorous promotion to appeal to its customers its usefulness and the entailing services it could support them (Mindtools, 2013, p. 1). Often, the retailers will package the promotion and use of the products to which it targeted to distribute.

Porter’s formula on this is shown below (Mindtools, 2013, p. 1): Value Created and Captured – Cost of Creating that Value = Margin When the organization value what it produces, the more profitable it will be and the more customers are enticed to purchase these products, the more competitive advantage is therefore built (Mindtools, 2013, p. 1). Porter contended that if the human resources of the company understand how they created value and if they are able to participate in creating more value, they are likely be able to develop the critical elements