Understanding of supply chain management and mapping
Discuss about the Understanding Of Supply Chain Management.
Market globalization and communication has led to increased pressure on firms to minimize the cost and maintain a high level of service provided to customers. The customers are becoming more knowledgeable and have increased the demand for their needs. Organizations no longer rely on just quality and pricing but also other dimensions such as timely delivery of services to meet the requirements of customers (Christopher, 2016). The firms are restructuring and evaluating their current business processes to remain successful and competitive in the industry. The process is known as supply chain mapping and has been embraced as one of the most effective strategies for improving supply chain management practices. It contributes highly to increased organizational performance and competitiveness in the industry.
Supply chain mapping has been used by several organizations to reduce waste and improve the performances. The mapping allows the flow of information across the entity and the organization focusing on their primary objective for example productivity. A company supply chain should show activities done by suppliers. Organizations are organized to contribute to useful decision making. It should also show the movement as well as the essence of environment of which the supply is captured (Farris II, 2010). Mapping aims to provide an understanding of the business supply processes. The purpose is therefore to deliver the service and products of customers at the right place and at the right time. This helps in improving their efficiency in service delivery, customer brand loyalty and increasing their competitive advantage over their rivals in the industry.
Mapping of existing company supply chain should be captured by the use of a diagram or pictorial way. All the essential information such as material sourced, a key customer, products, cost, quantity, prices, and lead time taken for each entity should also be included. The sources of data used result from each of the supply chain entity (Jacobs et al., 2014). A presented supply chain mapping ensures identification of the primary constraints in the supply process, the characteristics, and the importance of the supply chain entities. Supply chain mapping enables companies to identify bottlenecks by providing transparency on how the processes are performed, where they are executed, who is handling what procedure within the process, how other operations are affected, and the primary purpose of a given process. It also enables identification of activities within the supply chain that are not adding value which can be eliminated or modified.
Implications of a good SCM (Supply Chain Management) practice
Mapping the current chain also allows identification of dynamics and complexity of chain process. Mapping supply chain illustrates main processes which are considered when improving effectiveness of the supply process. These include; supply chain entities, the link between supply chain and the objects, the product/ material flow, information flow, lead time and management policies. The mapping of supply chain also helps in developing any disturbance in the whole process (Stadtler, 2015). Therefore the objective of supply chain mapping is to get a clear view of the current supply chain entities as well as the actual company capabilities. Mapping is undertaken based on the objects involved, the information flow, material and the mode of transportation used. Formation of a cross-functional team for supply chain mapping is essential as there is a linkage between the customer and the supplier. Such a link enable to the company to improve on its efficiency in service provision by understanding the various consumer needs and responding to their complaints.
For success, a cross-functional team tasked with prioritizing processes based on the requirements of the organization is formed. The team has to include multiple functions of the organization. The mapping processes are grouped in; the context of supplier engagement, development of product, services and product testing, support for limited time frames, and support for changes that may occur (Monczka et al., 2015). Some of these processes can stand alone while others are intertwined. However, the most effective structure will be the one for intertwined operations since it helps in reducing wastage of resources in the organizations for maximizing the organizational benefits from production activities.
The supply chain map process should be carefully handled specially in giving information to the firms involved in the business process. The risks such as providing competitive analysis, getting confused and lost, the changing dynamics as well as providing weak outlook for the management are involved in the entire supply chain mapping process (Wisner et al., 2014). Competitors get to know the materials and the specific products you used. They can as well use the pricing information provided to their advantage making the organization lose their market niche. The map should only include the first firms to avoid competition in the market (Ralston et al., 2015). However, the critical members should be mapped in the business process for the organization to develop effective integration strategies aimed at improving the organization performance and attaining a competitive advantage. Mapping of critical members also helps in accessing the performance of each supply chain link and their contribution to overall organization performance.
A good supply chain management practice comprise of five convenient methods. These include; the tradition of developing strategic supplier partnerships used a long-term measure of the relationships between the organization and its partners. In most cases, it is established with the aim of determining the organizational strategy. Business operational abilities of individual partners participating in the supply chain to help them gain benefits in the supply chain process (Huo et al., 2014). Secondly, a good supply chain management practice involves the development of customer relationships where it is the goal of the entire supply chain management practice to help in reducing customer related complaints by effective relationships with customers as well as improving their satisfaction levels. Another method in supply chain management is establishing increased information sharing which defines the extent to which specific information about company products or services is communicated to the supplier partners. Leveraging on the quality of information sharing is also another practice of a proper supply chain management and defines the adequacy, credibility, and timelessness of the information been exchanged (Mackelprang et al., 2014). Lastly, we have the practice of postponement of some operations in the supply chain by the suppliers or partners to a later date. The impact of these practices if therefore to contribute to increased organizational performance and doubled the organization competitive advantage.
Every organization strives to develop effective supply chain practices. However, the process of developing such a supply chain is dependent on number factors. These factors will cut across the various functional activities in the supply chain including; production activities, supply, inventory management, transportation, information delivery and location logistics. The company is therefore required to evaluate the benefits and disadvantages of the existing options in the supply chain (Holweg & Hello, 2014). They should ensure that the supply chain process is efficient and cost-effective. Therefore the decision of who to include in the supply chain and who should not be included is influenced by the efficiency and cost-effectiveness of the system. Based on the operational activities of the company then we can identify several players in the supply chain. These can be grouped based on their functions and encompass the company suppliers, manufacturers, retailers, and consumers.
Therefore, the decision to include a particular manufacturer in the chain process is depended on the efficiency of the manufacturer regarding the production. Is the manufacturer able to produce quality and standard goods and services which in turn will be used to satisfy consumer needs? Are the manufactures production activities cost-effective or will they increase the company overhead costs? If such conditions are met, then the company can include the manufacturers in the supply chain process as this will contribute to improved service provision to customers and increased profitability of the company.
Many organizations have embraced the development of effective supply chain management since it plays an essential role of securing organizational competitive advantage and improving its performance because competition seizes to be between the organizations in the industry but among the supply chains. With the development of different corporate strategies, the end goal of any plan is to achieve long-term sustainability regarding organizational performance (Wiengarten et al., 2016). The organizational ability to deliver superior performance is dependent on regulatory ability to become fully integrated partners in a supply chain. There is a need for the organization to develop a supply chain strategy that focuses on how both internal and external business process is designed and integrated as well as coordinated through the established supply chain in a move to better their services (Martínez-Jurado & Moyano-Fuentes, 2014). Adequate supply chain will seek to improve customer and consumer relationships, enhance the general organizational performance as well as individual supply chain members.
Organizational strategic management is usually developed at different levels and therefore shifting their focus away from the things and thinking that have been pointed out above. It is the responsibility of the managers to communicate, coordinate as well as cooperate with all partners in the supply chain. Effective supply chain management requires a change from the traditional control of individual functions in the supply chain into the integration of activities relevant to critical supply chain processes (Govindan et al., 2014). However many concerns about the effectiveness of supply chain strategies and therefore integration will help in enhancing sharing of information between the supplies chain partners? It is therefore essential to understand that all the partners in a supply chain play are significant in the implementation of effective supply chain management.
Good supply chain management system or strategy does not only impact on the organization’s performance but also help the organization to gain a competitive advantage in the market. Therefore understanding supply chain management is critical to staying competitive in the current competitive corporate environment (Yusuf et al., 2014). Competitive advantage is the ability of business to create a strategic market position over its competitors. In most cases involve the development of organizations capabilities which allow the organization to differentiate themself from their rivals, and it’s entirely a function of an organizations management decisions (Genovese et al., 2017). An effective organization supply chain management contributes to improved competitive advantage through the price of costs, from time to market, quality products as well as through dependable delivery system as well as through product innovation.
If an organizations supply chain has established a strategic supplier partnership, such partnership plays a vital role in gaining a competitive advantage to the market by improving supplier’s performance. Improvement in supplier performance means that there is the high efficiency of customer’s responsiveness and reduced time to market (Huang et al., 2014). Another important aspect of a proper supply chain management is establishing information sharing strategy as it helps in increasing the levels of supply chain integration. This is done by influencing or enabling the organization to make the useful introduction of a service or good in the market as well as improving the dependable delivery of the same products and services. Information sharing contributes positively to increased customer satisfaction. There is a definite relationship or correlation between an organization’s competitive advantages (Wang & Shin, 2015). An effective supply chain management helps in creating or enhancing value creation to customers, development of competitive market prices, increased production activities which contribute to attaining a competitive advantage in the market. Such competitive position can contribute to increased economic performance, customer satisfaction as well as improved organizational effectiveness.
The development of quality brands through product innovation help in enhancing high customer loyalty face and therefore reducing the chances of competitive product switching in their targeted market segments (Blome et al., 2014). They also help the company to offer premium prices for the quality products which contributes to increased profit margin on sales as well as increased return on investment. Therefore, implementation of a good supply chain management system or strategy in an organization contributes positively to improved organizational performance and increased competitiveness.
In regarding to supply chain management structure, there are different impacts can be influenced by the structure. For an organization with a horizontal supply chain structure, methods are defined by any in the supply chain at the organization level. Therefore, it means the decisions or practices are dependent on the level of the organization (Carter et al., 2015). Such methods of the existing supply chain may involve merging with other organizations that have the same product line. Its impact is that it helps the firm or company to gain more customers as well as exercise control over the prices in the market. On the other hand, a vertically integrated supply chain structure includes all the moves made by the organization for different levels in the organization. Therefore the decisions to merge or purchase out a supply chain link is based on the position of the link which can be ahead or before the organization (Holweg & Hello, 2014). It can also be achieved by developing organization independent capabilities for handling the entire supply chain system. The impact of such a practice is that it helps the organization to gain greater control over the costs, help the organization to net a more significant profit share and reduce the time spent on production and wastage of resources. Lastly, the focal point position of an organization in supply chain management is established through partnerships with both suppliers (upstream) and with consumers or the downstream link in the supply chain (Mani et al., 2018). It contributes to increased exchanges of knowledge and competencies for the organizations forming the supply chain partnerships.
Conclusion
From the analysis above, we can deduce that supply chain mapping plays significant role in evaluating an organization’s current supply chain strategies and developing effective mechanisms to remain or improve their competitiveness. Success of the chain management practices is the function of management decisions and helps in determine and influencing organizational performances as well as profitability and competitiveness in the industry. The management should, therefore, be keen on the supply chain strategies they adopt as they should be aimed at improving or developing the organization’s capabilities. The end goal of an adequate supply chain mapping and supply chain management practices is to contribute to increased consumer satisfaction by managing consumer complaints and also helping to increased organization profitability and gaining a competitive advantage in the industry.
References
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