Pros And Cons Of Global Supply Chain Management

Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;

The supply chain management is considered as a management concept from past two decades as the customers are concerned about timely and safe delivery. The competitiveness has been increasing among the companies to deliver the products as quickly as possible to the customers all around the world. This has made the supply chain management as a vital tool for the management. This is also measured as a competitive parameter for the companies.

Supply chain is the process of getting a product from point A to point B. With how advanced technology has become, there are more ways than ever to transport the product. The goal of a supply chain managers is to get the product into their hands. The mangers negotiate with the suppliers to purchase the raw materials. Then, they ship those materials as efficiently as possible through trucks, ships, and trains. Then finally, they do everything they can to make the product gets to the store on time so the consumer can enjoy the product. Why is this so important? Well, without it, we as the consumer wouldn’t enjoy that fresh produce that Kroger provide or the convenient drive thru pharmacy. Everything we own is because of a company’s supply chain, and without these supply

* A company’s competitive position and profitability can be improved through the use of Supply Chain Management System (SCMS) which if successfully implemented will lead to exemplary customer service. (Oz, 2009)

One of the most positive aspects of globalization continues to be the exponential increase in job creation and the development of increasingly more sophisticated, high speed supply chain management systems that drive entire industry's value chains. Globalization is extremely powerful in getting companies who had been very inward-centric and

Supply chain management is increasing in importance because “In today’s hypercompetitive environments in which competition is among supply chain networks rather than individual firms, firms are confronted with the need to effectively manage increasingly extending supply chain activities beyond the boundary of the firm,” (Lee, B.C., et al., 2010, p. 657). As stated previously, the broader the supply chain the more risks the company is open to. The second line of protecting the supply chain is creating strong relationships with the suppliers. The longer a company has a supplier, the stronger the relationship (Bayraktar, 2010), but to get to that point there needs to be similar: corporate and national cultures, vision, technology rate change, and quality information to share (Lee, B.C., et al., 2010). When all of these characteristics align, there is trust and open communication. Since supply chain management can be considered information sharing (Lee, B.C., et al., 2010), trust and open communication are necessary for information sharing to take place. Without trust and open communication, there is a very weak supply chain and even more vulnerability to risks. Trust and open communication are extremely important in global supply chains. Extra effort from the operations manager is needed when languages and time zones complicate communication.

Supply chain management plays a very crucial role in the success of any organization and how it can cater to a customer’s need and provide the maximum satisfaction. Supply chain management is essentially managing the flow of goods/services of an organization. It involves raw materials storage, transportation, inventory management, distribution and procurement.

Effective supply chain management (SCM) has evolved as an essential prerequisite of securing competitive advantage and boosting organizational performance as supply chain is an integral part of the organization. This article covers the seven most popular SCM practices (Strategic Supplier Partnership, customer relationship, level and quality of information sharing, demand management, procurement, inventory management,) and describes how SCM can give a company competitive edge and improved performance.

What is Supply Chain Management (SCM)? Supply Chain Management is the synchronization of a firm’s processes with those of its suppliers and customers to match the flow of materials, services, and information with customer demand. To provide the highest degree of customer satisfaction at the lowest possible cost is the flow in supply chain in management of material and information. The commitment of supply chain partners is important and requires to work together to coordinate order generation, order taking, and order fulfillment in Supply Chain Management. To maximize customer value and gain a competitive advantage in the marketplace is the active streamlining of a business’ supply-side activities in Supply Chain Management. Development and implementation supply chains by suppliers is the effort represents Supply Chain Management that are as efficient and economical as possible. To product and development, the information systems are needed to direct these undertakings which is cover everything from production by supply chains.

In the 1980s, the term supply chain management (SCM) was developed to express the need to integrate the key business processes, from end user through original suppliers.[8] Original suppliers are those that provide products, services, and information that add value for customers and other stakeholders. The basic idea behind SCM is that companies and corporations involve themselves in a supply chain by exchanging information about market fluctuations and production capabilities. Keith Oliver, a consultant at Booz Allen Hamilton, is credited with the term's invention after using it in an interview for the Financial Times in 1982.[9][10][11]

The world was changed to globalization. Some of business turned themselves to global company for the great opportunity to reach new markets and supply or more resources that can improve the competency of company working process. Especially, in procurement department, it can be divided into 2 parts. That is purchasing and sourcing. The definition of sourcing means the process to finding proper resource from supplier. Supply chain is a system of a firms, people, information, activities, and resources that involve sending a products or services from supplier to consumer (Nahmias, 2013). Global sourcing was created according to atop paragraph. Global sourcing is the firstly process in supply chain (or someone called global supply chain) to finding a new supplier, selecting the supplier from AVL (Approved vendor list), Contract negotiation (Mostly in pricing), find the proper way to bring the shipment flow from any obstacle .The reason why they using global sourcing is a pricing gap between supplier country and ordering country. Ordering company can take advantage from global resources. The second reason is goods or products are special one because nowhere can find expect this supplier. Global sourcing and retailer are involved at the same like another company. Retailer can classify the type such as online store, grocery store, superstore (market), department store, etc. Retailer need to orders many products come to store and stock it. They have to face risk for stocking such as

Supply chain management (SCM) is the supervision of materials, information, and finances as they move in a process from supplier to manufacturer to retailer to the cessation consumer. There are three crucial flows of the supply chain: The product flow, the information flow and the finances flow. SCM involves coordinating and integrating these flows both inside and between

Strategies through achieving a competitive advantage resulted in the existence of the terms `Globalisation` and supply chain management (SCM). Because in today`s emerging and industrialized environment companies seek to achieve competitive advantages and are no longer competing with their own expertise but with the talent in their entire global supply chain. [1]

1. Supply-chain management is the management of the activities that procure raw materials, transform them into intermediate goods and final products, and deliver the products to customers through a distribution system.

INTRODUCTION A Supply Chain is a network of facilities and distribution options that performs the function of procurement of materials transformation of these materials into intermediate and finished products and the distribution of these finished products to customers. It is the process used by the companies to ensure that their supply chain is efficient and cost effective. It also basically a collection steps which a company follows to transform raw materials into finished products the five different stages are Plan Develop Make Deliver and Return Plan A plan or strategy