Executive summary
In the line of production, a company requires raw materials and other goods for the process. These goods are derived by suppliers whom the business have limited control over. A supply chain management takes into account all logistic involved in the supply of goods and service to/from a company; it covers inward logistics, outward logistics, reverse logistics and forward logistics. When well implemented, it is likely to offer a competitive advantage to a company.
Introduction
Supply chain management refers to process undertaken by a business in the supply of goods and services into the business and sometime extends to supplying goods to a customer. The logistics starts from ordering until delivery of goods; it is the major task of procurement department although it is conducted in collaboration of other departments.
Companies involved in a supply chain vary, and thus company needs to develop a strategy that caters for all the companies (Mentzer, 20-34). This paper discusses how a company can develop an effective integrated supply chain network.
Supplier’s integration analysis
Before taking any step in implementing a supply chain management, the initial step is analyzing the current system and the logistics that take place in the company. In this section, the company should identify key suppliers to the company; the kind of goods they supply and rate them according to dependability level.
Re-order level, if is maintained in the company, is established where the minimum amount required a manufacturing process to take place is analyzed. This information is recorded. Duration that a certain supplier takes to supply goods is established and recorded.
Value determination
Different suppliers offer different quality of goods; the available information about the value of goods from a certain customer are interpolated. One of the major aims of a supply chain management is to ensure that that goods used in manufacture are of the right quality and quantity; this goes ahead as it is reflected in the final products of the company.
Integrated purchasing strategy
At this level the company aims at interpolating the demands for good that it has for a certain period; it is not always that a supply is constant throughout the year however; it varies with time and season. After understanding, the amount required at a particular time Gantt charts are used to interpolate data and form the background of the case. Computers can be used to give data analysis of the trend in supplies required.
Supplier base management
With the data at hand, including data about reliable suppliers whom the business had not done business with earlier, a supplier base is developed. The amount of order in terms of amount to supply that will be given to a certain supplier.
The minimum quality and quantity that can be accepted is developed and the system of supply is devised. Duration given to a certain supplier to have supplied the goods is set; the system should have a system where it can record the level of quality met by a certain supplier for better and easier analysis in the future.
Procurement department/team
The team to be mandated with the task of vetting and allocating orders should be established; it should contain experts in procurement and involves head of department who will advise the department on quality and quantity they require. This department should be vetted to ensure that only people of high integrity have been deployed. If the team is compromised, chances that a well arranged supply chain will fail is very high.
Supply chain synchronization
This is developing mechanisms for checking on the quality and quantity of goods and services to be supplied. After deliveries have been made, the company receiving the supply should counter check against the specification of the ordered goods. A person who will be responsible for this task should be recognized early enough. Checks and balances should be set to ascertain that there is transparency in this area (Mentzer, 20-34)
Briefly, when developing a supply chain policy, it is important to look into the following areas and ensure that data for each process is interpolated,
- Have a Supply chain synchronization
- Establish a Procurement department/team
- Set a Supplier base management
- Integrated purchasing strategy
- Set minimum quality and Value determination mechanisms
- Interpolate available data and undertake a Supplier’s integration analysis
Implementation
With the set data at hand, the next step is implementation of the process. This will involve establishing the current needs of the company in terms of goods and materials required, advertise of bids (if step can be ignored if there is an already existing and reliable supplier has been established), choosing the suppliers who will be given orders.
Developing is a quality management (T.Q.M), strategy and thus it should be explained to internal stakeholders (employees), they should understand the changes that are taking place. The following are the areas to be looking into:
Strategic supplier alliances
The company should establish a health link with its suppliers; the link should be a win-win benefit, where the managers should aim at establishing suppliers who can be relied upon for quality, quantity and in time delivery.
When developing these alliances the help of line managers who have used products from these suppliers should assist in choosing who should supply what. Costs of supplying and logistics of supply should be discussed.
Just-In-Time (JIT) logistics,
These policies ensure that there is a good control of the supply system. Just in time means that goods and services required in a company are supplier early enough that there is no deficit at any one time. It aims at having an adequate supply, at the right time, at the right cost and the right quantity.
When this system is put in place, there are a set quality-level measurement put in place, reorder level established, have a control panel of quality and quantity.
In total quality management that results to competitive advantage, there should always be adequate supply of goods and services for a production to take place. An analysis of the external market and competitors’ value is important since it assists a company to gauge its standings (Hooley and Saunders 12).
Possible obstacles
The obstacles that the system is likely to get are opposition from employees; some employees may oppose the system as they may feel that they will be denied a chance to exploit the company.
An efficient supply chain uses computer analysis to make decisions; this is a costly engagement. There is also the need to employ experts to collect data and interpolate it. Procurement on the other hand is a time consuming expensive engagement.
Conclusion
To have a competitive advantage, a company should ensure that it has managed its internal process well. One of the areas that determine the quality of products that a company makes is supply. It should thus manage in a strategic manner such that at any one time, there is adequate supply for a continued production.
When developing a supply chain strategy, it is important to look into the following areas; have a supply chain synchronization, establish a procurement department/team, set a supplier base, integrated purchasing strategy, set minimum quality and value determination. The result is a just in time supply where a company has strategic supplier alliances.
Works Cited
Hooley, Graham, and Saunders John. Competitive Strategy: The Key to Marketing Strategy. New York: Prentice Hall, 1993. Print.
Mentzer, John. Supply chain management. Newbury Park, CA: Sage, 2001.Print.