Why Is Supply Chain Important For Businesses? Supply Chains?

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Why is a supply chain important for businesses? Supply chain is a chain of interconnected links that facilitates the movement of supplies, materials, products, and so on (Arway, 2013, pp.3). Supply chain management has become the critical backbone to businesses today (Management Study Guide, 2013). The reason comes from the fact that effective market coverage and availability of products at market locations depends on the effectiveness of supply chain management. Any fault in product not being available at the right time can cause drop in customer interest and demand which can be catastrophic. On the other hand, effective and secure supply chain can successfully boost customer service in following four aspects (Council of Supply Chain…show more content…
Today, consumers also download e-books, games, MP3s, and films from Amazon’s website. In addition, Amazon entered the e-book hardware industry in 2007 and released the original Kindle reader (Amazon.com, 2013). During the past five years, Amazon’s sales have more than quadrupled from $15 billion in 2006 to $61 billion in 2012 (Biesada, 2013). Amazon’s North America market accounts for more than half of its sales. However, international markets are also important. Especially, Japan, Germany, and U.K. are each contributing more than 10 % of Amazon’s total sales. Amazon has also expanded to China, Brazil, France, Italy and Spain markets. Amazon is one of the supply chain management leaders. According to the Gartner Supply Chain Top 25 for 2012 survey, #1 admired company in supply chain leadership was Apple; while #2 was Amazon (Hofman & Aronow, 2012). However, in SCM World’s survey on global supply chain practitioners, Amazon was top rated and beat Apple on three aspects of supply chain: (1) agility (the ability to quickly and cost-effectively shift amounts and types of production and delivery to improve operational performance in volatile conditions); (2) collaboration (the ability to work across organizational boundaries to solve systematic operational problems and create new
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