Supply chain management involves the provision of networks or related businesses which ensure the provision of services and products to the client. It involves the development of a commodity from a point of origin, its mining, fabrication, wrapping and circulation. Management absorbs the purposing and monitoring of procedures in the supply chain with the aim of creating expertise in business requirements and improves comprehensive power (Hassan, 2005). it as a form of governance entailing planning and administration of activities involved in sourcing and acquisition, alteration, and all executive actions.
The concept of SCM has not changed much over the years, effectively maintaining some basic underlying theories. The term was coined in the 1980s and experienced widespread mainstreaming in the 1990s. Previously, businesses employed such terms as “operations management” and “logistics” (Skjott-larsen & Jespersen, 2005).
A supply chain has several definitions depending on the application (Nawrocka, 2008). It is the formation of companies that bring goods or services to the market. Chopra & Meindl (2001) further interpret that it consists of all direct and indirect interactions involved in meeting the requirements of the end-user. Producers and suppliers are not the only ones involved, rather the succession encompasses carriers, merchants and clients.
From the definitions of the supply chain, we can conclude that SCM involves manipulating the presentation of the supply chain to achieve desired results. The process recognizes the established logistics and also includes available dimensions of customer service and marketing (Beske, Gold & Seuring, 2009).
The supply chain and its drivers are faced with decision-making alternatives that affect its impact. Organizations deal with the drivers through subcontracting and partnerships. In the present society, organizations determine their core competencies in the series and outsource the rest (Skjott-larsen & Jespersen, 2005).
Nevertheless, this has been in progress recently. In the industrial age, for example, profitable companies endeavoured to possess a greater percentage of the supply chain in order to achieve utmost effectiveness through economies of trade, a process defined as vertical integration. The companies which owned much of the supply chain, Ford, for example, prospered in dealings, as it had all the materials needed for making, and resources necessary to satisfy the entire chain.
The markets continued to grow, and consumers became demanding on their preferences (Font, Kornilaki, Schwartz & Tapper, 2008). The standard model began to disintegrate as it could not react to user needs and make the stipulated range of products. Globalization, high competition in markets and express systematic alterations direct supply chains, where different companies combine efforts, each organization specializing in its capacities (Geng, Lai, Sarkis & Zhu, 2008). Each group is thus able to handle fast changes and obtain indispensable skills to participate in their business.
Through management and effective strategies, companies can work with suppliers, interest groups, administration agencies, and the greater residents to ensure that their relationships are useful and cope with opposition. Procurement methodologies like outsourcing add value to the supply chain and increase supplier diversity. Ensuring that the supply chains are all-encompassing strengthens the organization and coerces shared competitive advancements for all suppliers.
Effective supply chains enable an organization to accomplish and prolong a competitive advantage in a dynamic field which is rapidly globalizing and facing market uncertainties (Mahmood, Muhamad & Tahar 2009). Companies that precede such challenges, and maintain strong supply chains face a considerable gain in prosperity. The SCM practice has limited structure, each supply chain with its own unique production challenges and business requirements (Mentzer, 2001). Through SCM, critical drivers of the series including fabrication, record-keeping, location, transportation, and information are studied to ensure efficiency. Appropriate decision making in the listed five activities defines the capacities and value of a system’s supply chain.
List of references
Beske, P., Gold, S & Seuring, S 2009, Sustainable supply chain management and inter-organizational resources: a literature review, Corporate social responsibility and environmental management, 17, 230–245
Chopra, S & Meindl, P 2001, supply chain management: strategy, planning, and Operations, Upper Saddle River, NJ.
Font, X., Kornilaki, M., Schwartz, K & Tapper, R 2008, Sustainable supply chain management in tourism, journal of Business study and the environment, 17, 260-271.
Geng, Y., Lai, K., Sarkis, J. & Zhu Q 2008, The role of organizational size in the adoption of green supply chain management practices in China, Corporate social responsibility and environmental management, 15, 322-337.
Hassan, M 2005, Engineering supply chains as systems, systems engineering, vol 9, No. 1.
Nawrocka, D 2008, environmental supply chain management, ISO 14001, and RoHS.
How are small companies in the electronics sector managing? Journal of Corporate social responsibility and environmental management, 15, 349-360.
Mentzer, J 2001, supply chain management, SAGE, California.
Skjott-larsen, T & Jespersen, B 2005, supply chain management: in theory and practice, Copenhagen business school press DK, Copenhagen.