Introduction
Inadequate analytical dimensions of supply chain such as business responsibility, customer service quality and cost may compromise the functionality of a supply chain in the company. From a theoretical perspective, the value creation model cannot align cost effectiveness when the logistics of operation are inadequate.
For instance, lack of strong control systems and poor benchmarking approach at present has compromised the organizational strategy of cost reduction, customer satisfaction, and reduction of risks. Basically, a supply chain management strategy identifies the need for commodities, appropriate suppliers, quantity and quality of the commodities.
It also evaluates effectiveness of supply practices already in place. The expansion of capacity and mechanization of production demands that the supply system matches production efficiency while assuring quality of the supplied goods. The supply chain determines the success of a company’s management strategy and ease of business sustainability.
A well outsourced supply chain is a prerequisite for confidence and trusts without and without a company’s market catchment. Accessibility and transition in the supply chain plan will ensure efficiency and proactive response analysis to further improve on the demands of prospective clients. Therefore, the company should introduce a hybrid supply chain management system to improve on efficiency, reliability, and scope of the business operations. The suggestions are discussed below.
Strategic outsourcing of the supply chain management system
There are several alternative suggestions which the company may adopt to improve on its supply chain management, in terms of efficiency and cost management. Among the alternatives may include the following strategies.
Logistics outsourcing
Logistics outsourcing relieves a company of fixed costs irrespective of seasonal trends and market demand. Through a competitive process, the outsourced unit will develop a balanced control system for a sustainable level of efficiency, costing, dependability, speed, quality, and flexibility through value delivery, value addition, and creativity.
In relation to this company, the outsource logistics team will have the responsibility to rationalize the scientific aspects of the supply chain such as the use of statistical tools, their application, and evaluation criteria in monitoring and managing the logistics.
When the outsourced logistics regulator is properly balanced, efficiency in the supply chain management is achievable within the first four months of implementation.
Benchmarking of the mapping, executing and managing processes
Benchmarking of the channels for planning and execution of production and distribution goals has the effect of reducing costs of supply chain management since the company will be in a position to monitor all the control systems and their logistics.
Thus, the major part of the success puzzle for supply chain control system should be operated on the periphery of soft skills involving the timeless vision of organizational principles, defining value of the business and determining requirements. Besides, building teams and mitigating tasks in the production-distribution channels for the products will restore efficiency in the supply chain management strategy of the company.
Customer retention is achievable through the creation of reliable and affordable marketing channel that is essential in monitoring a matrix that maps out potential competitors and identifies weaknesses and strengths of the clients. Input from the production section is processed to chart a supplier’s trend in adherence to quality, quantity, and timeliness of deliveries.
Communication of the quality guidelines minimizes the risks of product rejection/return. In the absence of a guide, variance is more probable. In such a case, the delay before replacement may slow or halt production. Consequently, potential revenue from processed products is missed. Therefore, a clear benchmarking strategy in the company would increase its efficiency in the supply chain management.
Improving the Decision Support System
The company should endeavor to create a decentralized decision support system. Despite having this efficient operations management system, the company has not fully established a mechanism for monitoring progress at micro level and majorly depends on macro auditing in decision making and has to deal with the risk of internal fraud and redundancy.
The decentralized system may incorporate planning, development, implementation, and discovery. Reflectively, the process captures organization chart, status reports, process map, compliance requirements, review structure, activities, dates, and resources employed within a specified period of time.
Sharing supply sub-system facilitates direct transactions and generation of reports that rate a supplier’s performance. Due to its dynamic reporting, anomalies in supply quality are communicated instantaneously to the supplier to initiate corrective action.
With a supplier audit, non-conformance to specifications in supplied commodities and modes of supply are identified. A report of the audit is then discussed with the supplier to implement a corrective remedy. As a balanced assessment of a supplier’s performance, the scorecard is thus an objective tool to guide quality in supply.
Managing the proposed supply chain outsourcing
Automation of the outsourced supply chain management strategy
An improved approach to supply management through automation will establish a broader partnership with customers. The buyer will make an effort to learn the supplier’s values, vision, challenges, and operating environment.
A spirit of collaboration established will offer a positive contribution to the partnering businesses. Such cooperation will turn supply into a competitive advantage instead of sole cost. This should be backed by a legal contract.
It further provides for explicit conditions in executing the contractual partnership. Due to their explicit nature and legal enforcement, a contract assures quality of supply to the agreed specification.
Cost management in the outsourced supply chain
The element of increased competition as part of the future development is well assured when the objective of outsourcing is aligned to cost reduction in doing business. However, what makes this strategy effective is the constant formulation and implementation of strategic policies based on its knowledge of the customer needs in the supply chain management.
Sustainable development is vital to business environment when outsourcing is incorporated in the business development goal. Therefore, a business organization must put in place stringent measures and strategies aimed and monitoring expansionary modules in the outsourcing of supply chain agents within feasible levels.
Generally, outsourcing and supply chain management strategies are interdependent to ensure that the business is sustainable. For implementation of the strategy, the management is to balance both the short term and long term consideration towards decision making.
Integration of entry strategy, comparative advantage, and market segmentation in the supply chain outsourcing
In order to achieve desired margins in sales and total revenues generated, a proper supply chain outsourcing plan should integrate entry strategy, comparative advantage, and market segmentation since in most cases, there is always a strong competitor or competitors that passing might prove challenging due to existence of consumer perceptions and household names.
To increase credibility and maintain professionalism, the outsourced supply chain plan should encompass processes and features that flawlessly facilitate healthy and lifetime relationships between the business and its clients.
Among the new development elements that can be incorporated to build trust, include establishment of a strong distribution and fair retribution process when interacting with the appointed agent who will be managing the outsourced supply chain system.
Delivery and customer satisfaction
Besides quality in service, delivery and customer satisfaction depend on the marketing segmentation as part of the outsourced supply chain program. Therefore, customer retention is achievable through the creation of reliable and affordable marketing channel that is essential in monitoring matrix that maps out potential competitors and identifies weaknesses and strength of the clients.
Moreover, the reporting criteria adopted by the outsourced supply chain agents should reflect the success of marketing calendar and set targets generated from time to time. Essentially, success of brand and product management in a new market depends on a proper alignment of a functional idea into the creation of flexible, involuntary, and quantifiable measurement of perception among the target audience in the supply chain.
Reflectively, this idea should have essential elements that can easily sway the mind, either positively or negatively. Therefore, such an organization should brand its business as the most competitive in terms of charges for service delivery and reliability in its outsourced supply chain.
Conclusion
Supply management system plays a critical role in business process. A modern approach to its management proposes building stronger relationship with a customer to minimize variation in quality. Important tools in safeguarding quality are the supply management system, supplier manual, supplier scorecard, and supply contract.
Thus, when outsourcing the supply chain function, it is necessary for an organization to balance the goals and competence of the outsourced agency. This will improve the efficiency in the company’s supply chain, since its scope of operation is global.