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Supply Chain Management as a Value Driver Analytical Essay

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Updated: May 27th, 2020

Introduction

Supply chain management refers to various stages involved between acquisition of raw materials and availing a finished product to a consumer. It involves different players including suppliers, manufacturers, wholesalers, retailers and consumers. Supply chain management involves administering of resources, data and finances as they progress from a supplier to a consumer.

Supply chain management consists of three main sequences including product sequence, information sequence and finances sequence. Product sequence involves passage of materials from a supplier to a consumer as well as any service sought by a consumer after purchasing a product.

Information sequence includes sending of orders and granting updates on delivery condition while finances sequence involves deliberations pertaining to credit terms, payment periods, products and ownership title plans.

Stakeholders in supply chain management use two main kinds of software: projection softwares and implementation softwares. Projection softwares show the best method in filling an order while execution softwares track physical condition of products, utilization of raw materials and financial data relating to all players in a supply chain.

Supply chain strategies

Supply chain strategy refers to deliberations and decisions concerning supply chain management that contribute to overall business strategy. Business strategy can either be cost reduction-based or differentiation-based.

Wal-mart is good example of a company that has applied various components of supply chain strategies. The company has adopted both lean and agile strategies. Lean strategy is evident when Wal-mart utilizes inventory maximization and transportation maximization methods to decrease costs. On the other hand, Wal-mart applies cross docking to respond efficiently to customer demands.

Concerning lean strategies at Wal-mart, the company starts with strategic identification of goods at lowest prices possible from suppliers who can constantly meet Wal-mart’s demand. To sustain flow of materials, Wal-mart creates strategic partnerships with suppliers and offers them long-term and great volume purchases at fairest possible prices.

Such suppliers transport materials to Wal-mart’s distribution units where cross docking takes place prior to delivery to other stores. Cross-docking marks Wal-mart’s agile supply chain strategy. It involves receiving goods from manufacturers and directly availing them to customers in the shortest time possible. Cross-docking assists Wal-mart in reducing holding charges and avoidance of overstocked stores.

Wal-mart’s supply chain strategy grants the firm various sustainable competitive edges. Such edges include low product prices, decreased stock carrying expenses, enhanced products variety as well as competitive bidding for customers. As such, Wal-mart has become and remained a great force in the market.

The Human Factor in Supply Chain Management

As much as technology plays a crucial role in supply chain management, human resource component plays an equally major role. If suppliers failed to produce required materials or products, the supply chain would have no product to supply. Staff members can disrupt supply chain by going on strikes. Customers can shun products and stores selling certain products.

All these possible reactions lead to massive losses by various organizations. To avoid such scenarios, organizations should pay suppliers on time and as agreed. Staff members require learning, training, and fair remunerations. Customers need updated information on all products and presence of needed goods at all times. Organizations must avoid stocking products that degrade the environment.

References

Kwon, I.-W. G., & Suh, T. (2004). Factors Affecting the Level of Trust and Commitment in Supply Chain Relationships. Web.

Rouse, M. (2010). . Web.

Supply Chain Musings. (2010). Supply Chain Strategy: Lean and Agile at the Same Time? Web.

University of San Francisco. (2013). Walmart’s Keys to Successful Supply Chain Management. Web.

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1. IvyPanda. "Supply Chain Management as a Value Driver." May 27, 2020. https://ivypanda.com/essays/supply-chain-management-as-a-value-driver/.


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IvyPanda. "Supply Chain Management as a Value Driver." May 27, 2020. https://ivypanda.com/essays/supply-chain-management-as-a-value-driver/.

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IvyPanda. 2020. "Supply Chain Management as a Value Driver." May 27, 2020. https://ivypanda.com/essays/supply-chain-management-as-a-value-driver/.

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IvyPanda. (2020) 'Supply Chain Management as a Value Driver'. 27 May.

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