Supply Chain Management and Its Elements

Introduction

Managing operations and Supplies are business processes that ensure adequate supply of materials in a company at the right time at an appropriate competitive cost. When a company has an adequate supply of materials, it is able to produce goods in the right time at an affordable and competitive price (Haag, Cummings, McCubbrey, Pinsonneault & Donovan, 2006). This paper looks into the most important elements of supply chain management (SCM).

Discussion

Objectives SCM

  • Adequate supply of materials in a company when they are needed (quality objective)
  • Supply of quality materials for various purposes in a business at all times (quality objective)
  • Supply of materials at a competitive price (price objective) (Ketchen & Hult, 2006)

There are four elements considered in a supply chain management they are; forward logistics, reverse logistics, inward logistics and outwards logistics. They should be managed effectively for a smooth running of business (Simchi-Levi, Kaminsky, Simchi-levi, 2007).

To attain the above objectives, there are key areas and strategies which must be taken. These areas from the strength of a system they are;

Value determination mechanisms

Value in supplies for manufacture of good translates to value in finished goods. For an efficient supply chain management, there should be value determination mechanism set by a company (Kouvelis, P.; Chambers, C.; Wang, 2006). All goods getting in the company should be vetted for quality. Other than raw materials, there should be vetting of output in different stages of production to ensure that there is quality in the final output (Cooper, Lambert, & Pagh, 1997).

Supplier relation

A company should develop a good business relationship with its suppliers as this will assist in making sure that there is reliability in the supply of materials. On the other hand it is easy to get goods at a better price and market data from suppliers whom the company has established good business relations (Kontopoulos, 2009).

Just in time supply mechanism

A good system is developed by the company getting supplies; it is the one that creates mechanisms for efficiency and effectiveness in the system. It should undertake an internal analysis of its needs for production (Larson & Halldorsson, 2004). There are times that the company requires more products (this is mostly times of high production) and sometimes pit requires low supplies. This should be documented and the system made in such a way there is always a just in time supply. A just in time supply means that at any one point in time, the company is has adequate supply (Ward & Glass, 2008).

Supplier base management and Procurement department/team

There is more than one supplier capable of supplying a company with products that it requires for its processes. However, they should be vetted to ensure that the best option has been selected (Kaushik & Cooper, 2000). Procurement department is mandated with this task and considers factors like;

  • Reliability
  • Capability
  • Price
  • Past experiences
  • Quality assurance and effectiveness (Mentzer, 2001).

The following companies have developed a good supply chain management. The choice of the companies was after an analysis of their supply chain management in their websites. All the companies have an effective procurement department run by professionals. They are;

  • Toyota motor corporation
  • McDonald
  • Subway Restaurants
  • Walt Desnity
  • Ford Motor limited
  • Airbus limited
  • Emirates Airlines
  • Qatar airlines among others
  • Starbucks

Case of McDonald and Starbucks

McDonald Starbucks
  • Gets fresh supplies from all over the world
  • Vets for quality and quantity assurance
  • Have a strong procurement department which advertises for supply tenders all over the world; it has also contracted international companies to make its procurement
  • Buys coffee from farmers directly
  • Before accepting a supply, it must be graded and priced differently
  • Only uses internal procurement department; is structured to cater for the demand of coffee by the company (Starbucks Corporate website, 2010).

Conclusion

Having a good supply chain management makes a company have continuous production. It ensures that there are adequate supplies at an appropriate price and time. When this is attained, a company gains competitive advantage. It has a quality, quantitative, price and logistic objectives.

Lessons learned

Previously, I believed that reading text books on a certain topic, offered me adequate information that I need to know about an issue, however after this research course, I have realised the need for media as a source of getting background information that can be interpolated by and made to make more sense through books. The need to undertake interviews and observations in companies has also come clearer. When I thought of a business research project, my mind of thinking of how it can be undertaken on big companies like Coca cola, however the course has shown me that information is freely available all is needed is to collect and interpolate it. Now I believe I can undertake a research project better.

After undertaking this course, I have realised of the need to have good relations with internal customers, which include suppliers and employees. Previously, I had thought that if a company focuses on its customers alone, then it is likely to be successful, however, I have realised that customer satisfaction is the end product of a number of internal processes. The need for an efficient supply chain management has dawned to me. I have a clear vision of how a business should undertake this noble task. In summary I have learnt;

  • The need to undertake an in-depth research on an issue
  • The need to collect secondary information
  • The need not to fully rely on secondary courses
  • I have also appreciated the course and
  • I have developed an wonderful experience in research skills
  • The major aim of the course was to learn and appreciate the benefits of an operation and Supply management chain (OSM); I have learnt and understood the processes and strategies involved like product and service design, demand management, process management and constraint management.
  • In the area of quality determination, I have learnt various quality management and assurance procedure like quality control, value assurance and management processes, inventory control and demand management,

From the course, I believe I can effectively manage a supply chain department, logistics and inventory control department.

References

Cooper, M.C., Lambert, D.M., & Pagh, J. (1997). Supply Chain Management: More Than a New Name for Logistics. The International Journal of Logistics Management Vol 8, Iss 1, p 1–14.

Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R. (2006). Management Information Systems For the Information Age (3rd Canadian Ed.), Canada: McGraw Hill RyersonISBN 0-072-81947-2.

Kaushik K.D., & Cooper, M. (2000). Industrial Marketing Management. Volume29, Issue 1 , January 2000, Pages 65–83.

Ketchen Jr., G., & Hult, T.M. (2006). Bridging organization theory and supply chain management: The case of best value supply chains. Journal of Operations Management, 25(2) 573-580.

Kontopoulos, G. (2009). Online Inventory Management Systems Advantages. Web.

Kouvelis, P.; Chambers, C.; Wang, H. (2006). Supply Chain Management Research and Production and Operations Management: Review, Trends, and Opportunities. Production and Operations Management, Vol. 15, No. 3, pp. 449–469.

Larson, P.D. and Halldorsson, A. (2004). Logistics versus supply chain management: an international survey. International Journal of Logistics: Research & Application, Vol. 7, Issue 1, 17-31.

McDonald Corporate website. (2010). Web.

Mentzer, J. T.et el.(2001). Defining supply chain management. Journal of Business Logistics, 22(2), 1–26.

Simchi-Levi D.,Kaminsky P., Simchi-levi E. (2007). Designing and Managing the Supply Chain, third edition. New York :Mcgraw Hill.

Starbucks Corporate website. (2010). Web.

Ward Jr., M., & Glass, L. (2008). INVENTORY MANAGEMENT SYSTEMS. National Petroleum News, 100(1), 24. Retrieved from MasterFILE Premier database.