CHAPTER FIVE
5.0 Problem/Opportunity Resolution
The aim of this chapter is to review relevant academic literature in the area of supply chain flexibility, it will show the different views of various academics on the concept of supply chain flexibility and its dimensions. This chapter will also examine the following research questions; the effect of environmental uncertainty has on supply chain flexibility, the impact of Supply chain efficiency and effectiveness on firm performance and the impact of overall supply chain flexibility on firm performance. Finally, from this review potential solutions on how Procter and gamble can improve productivity will be identified.
5.1 Views on supply chain flexibility
5.1.1 Basic concepts
Supply chain management has become an important issue in today’s business world, it is used by many companies to improve their competitive advantage (Vickery, Calantone & Droge, 1999). In a supply chain, the customer is the most impart part and seeing that every company seeks to please their customers, supply chain management therefore helps companies in satisfying the needs of the customer which involves the management of various aspects such as manufacturing, suppliers, transportation, information and retailers to deliver value to the customers (Chopra & Meindl, 2007).
According to Slack, Chambers & Johnston (2007), Flexibility deals with the ability to change the way an operation is carried out. They point out that in order for a company to be
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.
A supply chain is a net work of firms. Thus, each firm in the chain should build its own supply chains to support the competitive priorities of its services or products. Two distinct designs used to competitive advantage are efficient supply chains and responsive supply chains. Efficient supply chains work best in environments where demand is highly predictable. The focus of the supply chain is on efficient flows of services and materials keeping inventories to a minimum. The firm’s competitive priorities are low-cost operations, consistent quality, and on-time delivery. Responsive supply chains designed to react quickly in order to hedge against uncertainties in demand. Work best when firms offer a great variety of services or products and demand predictability is low. Typical competitive priorities are development speed, fast delivery times, customization, variety, volume flexibility, and top quality. Tables below show the environments and design features that best suit each design.
Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay
Flexibility is related with an operation’s capability to change. Flexibility is a more difficult objective because we the word flexibility mean so many different things. Flexibility always means 'being able to change the operation in some way'
The business world nowadays is very different from the past. It is fast changing, challenging and full of opportunities. In order to sustain the business, the companies need to minimize costs, maximize profits and make the business environmentally sustainable. The management of the organization achieve these goals through supply chain management has recently focused (Fawcett, et al., 2007).
To start, Schroeder, R., Goldstein, S., and Rungtusanatham define supply chain as “the set of entities and relationships that cumulatively define materials and information flows both downstream toward the customer and upstream toward the very first supplier.” Schroeder, R., Goldstein, S., and Rungtusanatham goes on to identify supply chain management as “the design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer.” Organizations have to prepare themselves to the best of their ability in order to provide or their customers. Customers expect to receive the upmost service, regardless of the type of organization they make contact with.
Supply chain management is a complex undertaking that must involve more than one organization’s efforts to succeed. A tremendous amount of skill, time, and money must be present to build and develop relationships, discover and implement a strategy, and use the capabilities of the chain to build quality at an efficient financial rate. Allowing for these requirements, it leaves one to wonder whether supply chain management is a viable option. The answer is yes, because an organization needs a strong supply chain to compete and be profitable in the marketplace. The key points for supply chain management should be to meet customer demand, produce excellent customer value, enhance responsiveness to change, build a network that can resist risk, and develop financial success.
Chopra, S., Meindl, P., & Vir Kalra, D. (2016). Supply chain management: strategy, planning, and operation (6 ed.). (pp. 439-440). Person. Retrieved October 7, 2017
Supply chain management places importance on managing the customer relationship, as well as the supplier relationship. By effectively managing these relationships, the company can become more competitive, while increasing the quality of the product to the customer. Placing emphasis on the supplier relationship and the businesses along the supply chain increases product efficiency and quality. The importance placed on the customer relationship focuses on the demands and needs of the customer. Through effective communication within the relationships along the supply chain, a basic balance of supply and demand is established.
Young (2012) writes that supply chain management (SCM) is a function of collaborating firms working to improve operating efficiency and to leverage strategic positioning. In addition, Young references this function as not only the physical attributes of product distribution, but also to include related information, such as production or delivery status, and the capability to access such information. Such capabilities allow SCM to be an important link in fulfilling customer needs and providing value. Young adds that in the current customer-driven market, the perceived value of the entire relationship
Flexibility means change what you do. It means according different requirements or things to fast handle with, making change or decisions , flexibility arranging and coordinating operations’ work.
As we all know supply chain is one of the most important areas which if handled properly can provide competitive edge to the companies. Supply Chain Supply change management is the control of resources, information, and capital Management of supply chain management is the most challenging and complex task because of ever changing needs of companies, products and customers. The instabilities in the market are also one of the reasons. When a company faces problem of excessive inventory, increasing costs, decreasing profits, poor return on assets and poor customer satisfaction then the company has to improve or look after its supply chain or if a company is entering into a new market or new technologies then it should have a well settled plan for its supply chain management. Same was the case here as well.
The Benefits and Problems For a Firm Trying to Increase the Flexibility of Its Operations
Macro flexibility: it refers to speed in which a company 's supply chain can adapt and execute latest and new strategies which should support changes in companies existing strategies or market place changes. For example: A company decides it wants to build a consumer direct e-commerce channel, with new SKUs in the mix. How fast the supply chain out in place and what it needs to do to make that happen?