Supply chain has become part and parcel of modern businesses. It enables a business to drive its objectives and increase its productivity. The majority of firms embrace supply chain management practices at all levels of the organization. These levels include the strategic, operational and tactical. Organizations can adopt supply chain management at the strategic level to craft wide-organizational decisions.
At the tactical level, the business can include critical aspects of the supply chain to help management achieve the desired organizational goals. The organization can also customize supply chain practices at the lowest level to enhance service delivery. We can, therefore, infer that a strong connection exists between supply chain management and business processes in an organization.
The organizations have diverse goals and objectives when it comes to using supply chain management. However, majority of businesses uses supply chain management to develop product life cycles. Most organizations use strategic decisions when considering products to manufacture and supply to the market (Long, 2003). Thus, when the product gets old, an organization innovates and comes up with new products. The supply chain management comes in, playing a significant role in pushing the new products closer to the consumers.
Timely distribution of goods to consumers is relevant to any given business. It contributes to efficiency, as well as reliability in meeting the customer’s needs on time. The supply chain management enables the organization to distribute their products closer to the targeted consumers, thereby shortening time delivery to the market.
Businesses seek to improve their operations and attain a competitive advantage over other similar firms. Supply chain management offers unmerited benefits for businesses to achieve this goal. An organization can eliminate barriers and allow smooth flow of goods. The business leverages on these practices to strengthen the business through lowering prices, innovating new products and redesigning existing ones (Brigham & Ehrhardt, 2014). These aspects give the business a competitive edge over its competitors
Global business environment creates opportunities, as well as challenges in the supply chain management. One major challenge posed by supply chain management is the environmental issue. Golinska and Romano (2012) point out that the globalization of trade, Just-in-Time deliveries, and outsourcing business operations with other countries has had a negative impact on the environment. These activities have increased the frequency of both air and road transport to deliver goods between countries and continents. As a result, more carbon dioxide is being emitted in the environment.
Detrimental government policies are also a concern with supply chain management in the global environment. Though many countries have sound and concrete measures to guide and speed up the dispensation of goods, some have harmful policies that hinder the supply chain practices. Some countries have detrimental policies that limit global multinational organizations to locate and manage inventory locally. The policies created by the companies add extra challenges making it hard for the firms to operate in value chains.
The role of outsourcing has also been a concern for managing the supply chain in a global environment. Golinska and Romano (2012) indicate that supply chain operators encounter disintermediation. Disintermediation is where a lead organization may decide to eliminate a middle man and carry on with the business. Long (2003) argues that this practice is not efficient for any business. Business should build sufficient knowledge and establish relationships with the other stakeholders to strengthen their businesses.
Brigham, E. F., & Ehrhardt, M. C. (2014). Financial management: Theory & Practice (14th ed.). Mason, Ohio: Cengage Learning.
Golinska, P., & Romano, C. (2012). Environmental Issues in Supply Chain Management–Main Challenges. Web.
Long D. C. (2003). International logistics: global supply chain management. UK: Blackwell.