Supply Chain Management

Supply Chain Management: Importance as to Maximizing Customer Value and Achieving a
Sustainable Competitive Advantage
As the world dawned with continuous changes and improvement in which business must
adapt to the modernity and continuing innovation of an individual, its existence and expansion
are the reasons of its essentiality as it provides a lot of products and services to the human beings
that highlight its significance to the economy, but to successfully sustain and achieve continuous
operation, one must maintain a good operation and management as it is what businesses do.
Operations are the core of what a business organization does while one of the primary factors
when it comes to managing the production of products and services is supply chain management.
According to Stevenson (2018), operations and supply chains are intrinsically linked, and no
business organization could exist without both. Whether a large cosmopolitan enterprise groups
or micro-companies, pay a high degree of attention to supply chain management as it has a great
impact on all areas of business.
Supply chain management is viewed as an active management of set of activities to
exploit customer value and to attain a sustainable competitive advantage. It affects customer
satisfaction and has an influence on cost savings projects and overall productivity as it
characterizes a conscious effort by the firms to develop and run supply chains in the most
effective & efficient ways possible. Supply chain system covers everything from planning,
coordination, operation, control and optimization of the various activities and processes, and its
goal is to correct products required by customers (Right Product) at the right time (Right Time),
in the right quantity (Right Quantity), right quality (Right Quality) and the correct state (Right
Status) to the correct location (Right Place) -"6R", and to minimize the total cost.
It is also sometimes referred to as value chains as we are talking about the supply chain
not only a supplier connected to the user's logistics, information and capital chain, but a value-
added chain that imitates the concept that value is added as goods and services progress through
the chain in which typically comprise separate business organizations, rather than just a single
organization. Moreover, supply chain has two components for each organization—a supply
component and a demand component. The supply component starts at the beginning of the chain
and ends with the internal operations of the organization. The demand component of the chain
starts at the point where the organization’s output is delivered to its immediate customer and
ends with the final customer in the chain. The demand chain is the sales and distribution portion
of the value chain. The length of each component depends on where a particular organization is
in the chain; the closer the organization is to the final customer, the shorter its demand
component and the longer its supply component. Supply chains are the lifeblood of any business
organization. They connect suppliers, producers, and final customers in a network that is
essential to the creation and delivery of goods and services. Managing the supply chain is the
process of planning, implementing, and controlling supply chain operations. The basic
components are strategy, procurement, supply management, demand management, and logistics.
The goal of supply chain management is to match supply to demand as effectively and efficiently
as possible.
With the emergence of competition in current market scenario, an efficient supply chain
can give a business the edge that it needs. It helps them remain competitive as markets change,
and as the marketplace becomes increasingly global, the need for better efficiency is crucial. As
management goals change, too, there is a move away from the past traditional relationships to
incorporate and organize all business processes throughout a value chain of multiple companies.
Supply chain management is just one more screw that can be tightened on the ship of business to
help it sail better through the turbulent waters of industry. But it’s a complicated process, one
that benefits from having robust project management tools to plan, monitor and report on the
many aspects of the supply chain that need control.
1. Paces with Technology. Advances in information technology and the increasing use
of outsourcing has also added to the expansion of the supply chain. This has created a
need for a more collaborative network, so different enterprises can work
harmoniously together.
2. Creates Productive Environments. These changes in how businesses are managed
have led to the development of supply chain environments. Multinational companies,
joint ventures, strategic alliances and other partnerships, as well as technological
advancements, have contributed to more cooperation among those in the supply chain
network. As supply chains become more holistic and cooperative, companies must
adapt.
3. Proactive Strategy. But supply chain management is not merely reactive, it also helps
to stimulate innovation and productivity by assisting companies with organizational
learning. The more extended a company is in terms of its supply chain, the more
adaptive it has to be. That leads to creative thinking, which results in innovation and
increased productivity.
4. Satisfies Customers. Customer service also benefits. Customers demand quality and
they expect products to be available where and when they want them or delivered
when on time. Supply chain management will also help with sale support after
they’ve made the purchase.
5. Reduces Operating Costs. But it’s not just the customer who benefits. As noted, SCM
is instrumental in cutting operation costs. When smartly applied it can decrease
purchasing, production and total supply change costs. This improves a company’s
financial position by adding to profit leverage, reducing fixed assets and increasing
cash flow.
Businesses have shaped human society more than others and having supply chain
management in which streamlines everything from product flow to unexpected natural disasters.
With an effective supply chain management, organizations can analyze problems and disruptions
correctly. It plays an important role in moving items quickly and efficiently to destination.

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Supply Chain Management: Importance as to Maximizing Customer Value and Achieving a

Sustainable Competitive Advantage

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