Reasons for Ignorance of the Supply Chain Management Issues
Inventory management highly depends on resource or facilities management to enhance economical expansion. Supply chain managers must therefore be progressive and efficient in planning production and distribution. In order to keep production and distribution costs at minimal levels, interdependence between supply of raw materials, production and supplying is critical.
Senior managers therefore often ignore supply chain management because it requires flexible production of quality goods or services at minimal costs to ensure customer’s satisfaction at all times, especially during the market fluctuation periods. The main challenge is ability to offer and maintain innovative dimensions to remain competitive in the market, and this calls for introduction and delivery of dynamic and technologically high quality inventories into the market at sustainable costs.
Management of cost is a huge challenge to any production or supply firm. Effectively managed cost assists in building a business vision or goal and demands that the top officials be in a position to recognize performance break and narrow the competitive gap through utilization of the available resources. Successful supply chain means that the consumer is not kept waiting after ordering and this is achievable via proper balancing of resources to meet demands (Lambert, 2008).
According to Wisner (2008), the current economical crisis means that the financial system remains unstable thus calls for critical but quick decisions regarding trade especially on money matters. Today technology is equally taking over the trading industries at a high rate, there is need to convert the physical elements of transactions to automated systems to enhance trade at the lowest feasible costs.
The high diversification of transactions means that companies need to invest in hi-tech information management urgently in order to facilitate goods transfer and compensate the low investments rates. Some main challenges that top managers have to deal with ensure smart investment on available resources.
Supply Chains Strategies
In relation to Lambert’s writing (2008), it is important for the executives to understand that there are various unique methods of managing supply chains inventory, such as forecasting demands. Forecasting methods include graphical, historical or statistical analysis, for instance, graphical analysis involves modelling outputs, especially when the chains are many as in the case of Wal-Mart.
The strategy mainly offers a clear picture of the reality and chances for expansion through analysis of hindrances as well as catalysts. Statistical forecasting calls for accurate graphical representation to form a clear understanding of performance elements as opposed to the historical analysis that mainly entails prediction based on past performances.
There is need for analysis of some of the benefits of upgrading production and delivery firms to supply chains for instance, Wal-Mart supply chain forecasts enables the firm to learn the procedures of controlling some of the consumer’s systematic shifts such as sudden divert of demands.
The shifts complicates when the chain store of the company fails to carry out required observations. Forecasting is important because it enables the management to find information regarding insufficient supplies within the market niche, which would otherwise be hard to note for accurate or timely supplies.
The main drive to for modernization of supply chains emerges from top managerial need for more efficient and faster achievement (Dutton, 2009). According to Dutton (2009) Peggy Larue; the director of global transportation at “Clothier Abercrombie and Flitch”, for top managers to fully understand and grasp the supply chain opportunities and implications, it is vital for them to consult or gather more information from the top managers, since performance logic spans a wide area.
It is necessary to show the management importance of focusing on heterogeneous way of working, which requires synchronization of activities and transformation from reactive form of operation to formation of deliberated trading history (Rudski, 2008). Top officials must know the significance of considering technology advancement to minimize costs, harmonize transactions and synchronize sequences as well as procedures to avoid waiting costs, and retain customers through timely deliveries especially within the global markets.
Emphasis for coordination of activities enhances firm’s ability to deliver solutions of the complex problems through integration of various aspects from different business provisions. According to Lambert (2008), delineating the management to the importance of globalization makes them appreciate and implement the supply chains for more complex but limited resources that are more profit oriented.
The ability to understand importance of modulated business components assist them to design subsystems and meets a wide range of business requirements such as production, manufacturing and procurement of components at highly reduced pricing, to meet future demands.
Joint planning, integration and coordination process reduces performance cost and offers a chance for business expansion to other market niche. The senior managers have to understand the benefits of increasing returns on investments such as assets, improved customer services due to specialization and, reduction on the time required for delivery.
Benefits of Working with 3PLs, 4PLs and Vendors
Globalization of the supply chains is crucial because it reduces procurement costs as well as decreases on the risks of international transactions such as purchasing behaviours.
The use of the 3PLs, 4PLs and vendors in promotion of supply chain management assists in outsourcing of inventory and venturing into countries that are more productive because of flexibility of choice. For instance, India was a rare consideration to venture into some years back, but today their advancement in technological matters makes most transactions easier, faster and cheaper (Lambert, 2008).
Today, globalized supply chains bring about cheaper but paramount quality options due to improvement of the transiting periods. Globalization brings about change for growth and that is the aspiration for every firm (Lambert, 2008).
Improved transit time leads to better supplies and thus better monetary gains from the customers. Lastly, some of the market niches are only attainable through global sourcing because they require global supplies. Vendors are able to provide a single shopping station for all requirements. 3PLs and 4PLs provides better technology, additional resources, more sufficient modes of doing business as well as shorter lead periods for transacting such as online trading.
References
Dutton, G. (2009) Selling the supply chain upwards, World Trade, Troy. 22(9) p. 34.
Lambert, D. M. (2008). Supply chain management: Processes, Partnerships, Performance. California, CA: Supply Chain Management Inst Press.
Rudski, R. (2008) Supply Management Transformation: A Leader’s Guide, Supply Chain Management Review. New York, NY: 12(2), p 12.
Wisner, J. D., Tan, K., & Leong K. G. (2008). Principles of Supply Chain Management. Kentucky, KY: Cengage Learning Press.