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OMGT1021 Supply Chain Principles Solution
The supply chain management is the basis of today’s competitive business environment. It provides huge competitive environment as it has hold on entire operational management. The activities related to procurement of raw material, production and manufacturing and delivering to the customers is something that has huge level of relevance with the supply chain management. It has become very essential element of functional process and provides support to the operational activities of any organization. It also includes inventory management, logistics and transportation management, purchasing, physical distribution etc. Supply chain management also makes integration between the operations department and production process. The supply chain management allows improving the cost structure of company and most importantly the control on various production functions could be ensured by the company.
There are various advantages of supply chain management that could be availed by any organization. The major advantage is that with the help of supply chain management it becomes possible to manage the situation of under stock or over stock (Wang and Yu, 2006). Through managing the under stock situation the production process could be improved and the items could make available for customers on time. Further the over stock related situations helps on the ground of minimizing the cost and profitability could be increased. Thus the productivity control is something that could be treated as one of the major advantage of supply chain management. Further the list of advantages includes the reduction in production. The assembly line could be designed properly and cycle time could be reduced with the help of supply chain management. The construction of appropriate network design is something that has high level of relevance with the effective transportation, logistic s and distribution facilities. The goods or raw material could be moved from one place to another in quick way and in result it raises the level of competitive advantage.
Other than above mentioned benefits and advantages there are certain issues and challenges of supply chain management that create trouble for the supply chain managers. From above discussion it has become clear that the spectrum of supply chain management is very wide and it has its impact at various operational activities so it become clear that the level of issues and challenges could also remain high (Cetinkaya and et al., 2011). In order to achieve the objective of competitive advantage there is need of handling the issues of supply chain management and have to eradicate all the issues occurred in supply chain management. The list of challenges for the supply chain managers is that the technology is changing very rapidly. The technological features that help in improving the supply chain management are changing very rapidly and it creates trouble on the ground of installing the new equipments and software applications.
There are two kind of problems associated with the technical changes. First is that the frequent change and accepting the change increase the expenses and cost structure as well. Other factor is that if the company won’t align with the changes then the high level of issues could be experienced on the ground of gaining the competitive advantage. The technology generally plays huge role in the supply chain management. The information and communication become stronger and dissemination of data could also become possible in appropriate manner. It is clear that this issue is highly problematic as losing the technological development minimizes the performance capacity of an organization. The cost also occurs in providing the technical knowhow of the machines or applications to the staff and managers. Thus in this way it could be treated as major challenge for the organizations. Mostly the manufacturing firms realize such kind of problems as they have to deal with core operations and manufacturing of big items (Geunes.et.al, 2006). The automobile industry need to manage their assembly line by ensuring the lowest lead time and production cycle. But rapid change in technology creates trouble in managing the cost.
In order to deal with certain problem there is huge requirement of focusing upon the minimizing the cost structure form other areas of operations. The technology is something that can’t be neglected in today’s competitive era. It provides the business solutions and promotes the innovation within the organization. However the cost minimization stress could be put on other areas and efforts could be made to align with latest technology. The staff people need to understand the knowhow of new technology in proper manner so that the quality could be improved at very large scale and most importantly the productivity could be raised to compensate the technical expenses. The major area of concern could be the proper management of resources or avoiding the wastage of resources. It is clear that if the resources are utilized in effective way then cost could be reduced at very large scale and the saved money could be put into various other processes. Thus these management activities can help in dealing with the technological challenges.
The supply chain management has gained huge level of complexities within their internal structure. The management needs to deal with this issue at very large scale. As mentioned above that it provides integration at very large scale Chandra, C. and (Grabis, 2007). Thus the complexities could be treated as one of the challenge in accurate as well as effective planning process. The companies can face troubles in managing the supply chain as the operations are integration or dependent on each another. Like sales forecasting is something that determine the information about raw material procurement thus there is need of estimating the future sales in proper manner so that stock management could become effective. The estimation of demand always controls the production process and makes the distribution process quicker. However the sales forecasting is not directly associated to the supply chain management but still it put huge impact at supply chain activities. At the same juncture it could be stated that the supply chain management need to deal with complex structure and have to connect various decisions in appropriate manner. But increment into the number of products to be manufactured, segments of customers, location, suppliers etc. these are certain aspects of globalization which is increasing the level of complexities. Tesco is one of the organizations that faced such kind of problems. They have their operations at international level and deals in many products. The diversification is the nature of Tesco and they have faced issues in ensuring that the complexities related to information dissemination could be minimized (Miti, 2012).
In order to deal with this issue or challenge there is huge requirement of focusing upon the adopting the most appropriate demand assessment technique. It can deliver the right information to supply chain managers and they can take their decisions in proper way. Further the complexity of connecting the various activities could be solved as the information is correct and concrete. The planning could be proper and as per the organizational objectives. Further the distribution process could also improve through effective transportation facilities or cost efficient network design. Ahead the supply chain should be segregated rather than selecting the centralized supply chain management. As per the region the segregation of supply chain management should took place and then the categorization as per the product is also required. It will minimize the complexities as the information will be related only to single production process or assembly line.
The most emerging issue is that the supply chain is relatively new concept and changes are taking place on the regular basis. Different industries can’t rely upon same supply chain management strategies even within the industry the level of supply chain varies. It is clear that due to new concept the supply chain has undertake lots of changes that create trouble in designing the long term strategy. It is something that can definitely lead towards losing the competitive advantage (Operations Management In Engineering,2013). Thus the frequent changes into the supply chain management spectrum are also a problematic aspect for supply chain managers. At the same juncture the problems are associated with the acquisition of trained staff and employees those who can deal with the supply chain management and its changing dimensions. It is something that can create issues with respect to the make proper use of supply chain arrangements that has been done by the company. If the staff is not so trained and professional then the troubles could be experienced at very large scale. In order to deal with these problem two major solutions could be entertained by the organizations. First is that the company has to understand the nature of business and have to provide change rather than accepting the change. They need to think one step ahead of its competitors and required to understand the fact that the change should be implemented in proper and effective manner. Further to increase the competency of staff people there is huge requirement of arranging the training programs to the employees so that they can learn the concepts in proper way. The trajectories of supply chain management could be explained to employees through on the job training method. Thus in this way desired potential and capabilities of employees could be developed by organizations (Poon and Lau, 2000).
The list of contemporary issues includes the long lasting partnership with other firms. Sometime it happens that the big manufacturing firms create the strategic alliance with other firms. In this process both the parties required to be quick responding towards the supply chain and completing the project in time. Thus if one party fails to manage their supply chain then it affects the business at very large scale. The collaboration should be effective else the supply chain inefficiencies of one organization can affect the supply chain of another organization. The principle of supply chain suggests that the partnership to share the technique or business effectiveness must be proper. Same problem has been faced by Amazon when they created their partnership with FIH in order to produce the smart phones. But FIH fails to complete the product testing phase on time and it delays the manufacturing process of Amazon. Here the partnership strategy failure creates trouble on the ground of managing the supply chain and introducing the product on time. In order to deal with certain issues there is need of focusing on high level of monitoring towards each and every stage so that the negative consequences of partnership could be avoided. This kind of collaboration can create the sense of urgency among both the parties and competitiveness of one party could be promoted to another. Thus it is clear that this factor can help in dealing with certain supply chain management issues and challenges. Further it is a part of risk management that should be prioritized by the organizations. The example opf Amazon suggest that whenever any company enters into the product range or new kind of product category then assessing all kind of risks is required at very scale. It might help on the ground of understanding the potential risks associated with the project and proper steps could be taken appropriately (Rashid and Aslam, 2012).
On the basis of above study it becomes clear that supply chain management has huge impact at the cost structure as well as the operations of the company. The example of two giant organizations in their field also suggests that the supply chain is very complex aspects to be handled and there is huge requirement of dealing with supply chain management in painstaking manner. The list of issues and challenges include the technological changes along with other changes into its structure and strategies, high level of complexities due to wide spectrum of product range and operations at various locations and inappropriate partnership along with incompetent staff and individuals. To deal with these issues of supply chain management there is huge requirement of adopting the dedicated and committed business approach and ensuring the well integration with frequent environmental changes. Further effective assessment is another strategy that can help in managing the issues and challenges of supply chain management.
- Cetinkaya, B. and et al., 2011. Sustainable Supply Chain Management: Practical Ideas for Moving Towards Best Practice. Springer Science & Business Media.
- Chandra, C. and Grabis, J., 2007. Supply Chain Configuration: Concepts, Solutions, and Applications. Springer Science & Business Media.
- Geunes, J., Pardalos, P. and Romeijn, H., 2006. Supply Chain Management: Models, Applications, and Research Directions. Springer Science & Business Media.
- Miti G., 2012. Cases on Supply Chain and Distribution Management: Issues and Principles: Issues and Principles. IGI Global.
- Operations Management In Engineering,(2013). [Online]. Available Through <https://www.strath.ac.uk/dmem/prospectivestudents/pg/operationsmanagementinengineering/>. [Accessed on: 21st May 2015].
- Poon, W. and Lau, K., 2000. Value challenges in supply chain management. Logistics Information Management. 13(3). pp.150 – 155.
- Rashid, K. and Aslam, M., 2012. Business excellence through total supply chain quality management. Asian Journal on Quality. 13(3). pp.309 – 324.
- Wang, C. and Yu, W., 2006. Supply Chain Management: Issues in the New Era of Collaboration and Competition: Issues in the New Era of Collaboration and Competition. Idea Group Inc (IGI).