Supply Chain Management: Key Issues

A supply chain encompasses the entire process and movement from the source through the production and distribution process and ends at the customers end. Clearly, all organizations have some form of supply chains however; some may be very simple while others may be long and complex involving numerous distinct groups and organizations. The complexity depends on the product offered and the nature of industry. The speed and efficiency with which all the processes in the supply chain occur are a crucial determinant of the success of any organization. This being the case, effective supply chain management is the single most important determinant of customer satisfaction which yields to customer royalty hence guaranteed revenues. Issues of quality, timeliness and cost minimization are all addressed. It guarantees competitiveness in the market (Supply Chain Management, 2010, par3-7).

Leagility is an important concept developed by combining the qualities of a lean supply chain as well as an agile supply chain to make the resultant chain more effective. Lean supply chains are best applied in supply of goods sold in large quantities and whose demand can fairly be determined. Agile supply chains are best applicable for products whose demand changes. Leagility combines the advantages available from each of the two. Clearly despite the distinctive categorization each of the two supply chains needs some elements of the other. Even for fast moving products whose demand is predictable hence enabling the establishment of rigid schedules, there will be instances when disturbances happen requiring some degree of agility (Mason, 2000, par6).

The importance of the location of a distribution center cannot be over emphasized. The most important traditional consideration for distribution centers is proximity to the market. The main reasoning behind this was the fact this would cut down on the cost of multiple deliveries to customers. Other important considerations for the location of a distribution center include the presence of requisite infrastructure such a rail systems, efficient road networks as well as waterways to ensure the most efficient transport system is available. In addition, the presence of complementary businesses especially those offering logistical services could be an important factor as well.

Internet selling

Internet selling requires one to take several issues into consideration to ensure its plausibility in relation to the kind of business and products offered. First, one has to establish the need for face-to-face meeting in selling the products. Sensitive products such as insurance services and other such transactions often require people to meet in order to develop trust. This then limits the use of internet. In addition, the fact that online selling reaches a wide customer base requires the company to make international shipments. This requires resources which may not always be available.

Efficient logistics

The efficiency or otherwise of third party logistics as opposed to in house operations is dependent on several factors. First is the size of the firm. A small firm with limited resources may not be able to acquire adequate equipment to conduct efficient operations. Outsourcing from 3pls with the requisite equipment, personnel and other resources would make them more efficient. However, this is pegged on the ability of the third party to understand and fully internalize the client’s processes. A big firm on the other hand may find it reasonable to fully undertake its operations and invest in experts, equipment and other resources.

References

Mason, R. (2000). Engineering the leagile supply chain. International Journal of. Retrieved from, emeraldinsight.com

Supply Chain Management, (2010). RCG University. Web.

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