Theories on Ensuring Successful Supply Chain Management

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Introduction

Supply chain- A supply chain is the sequence of organization their facilities, functions and activities that are involved in producing and delivering a product or services. The sequence begins with basic suppliers of raw materials and extends all way to the final customers. Facilities include warehouse, factories, processing centers, distribution centers, retail outlets, and offices.

Supply chain management- is the strategic coordination of business function within a business organization and throughout its supply chain for the purpose of integrating supply and demand management. Supply chain managers are people at various level of the organization who are responsible for managing supply and demand both within and across business organization.

Supply chain-

Supplier

Supplier

Storage

Distributor

Retailer

Customer

Storage

Mfg

Supplier

Need for supply chain management

The need to improve operations.

Increasing level of outsourcing.

Increasing transportation cost.

Competitive procedure.

Increasing globalization.

Increasing importance of e-business.

The complexity of supply chain.

The need to manage inventories.

Global supply chains-

As business increasingly make use of outsourcing and pursue opportunities beyond their domestic markets their supply chains are becoming increasingly global. For example product design often uses inputs from around the world and products are sold globally. Some manufacturing operations may be outsourced to countries that have low labour or material costs and some services may be outsourced to countries such as china and India where young well educated people are willing to work for work for wages much lower than those domestic employees earn. As business recognize the strategic importance of effective supply chain management they are also discovering that global supply chains have additional complexities that were either negligible or nonexistent in domestic operations. These complexities include language and culture differences currency fluctuations armed conflicts, increased transportation costs and lead times, and the increased need for trust and cooperation among supply chain partners.

Creating an effective supply chain

Creating an effective supply chain requires linking the market, distribution channels, processing and suppliers. The design of a supply chain should enable all participants in the chain to achieve significant gains hence giving them an incentive to corporate. It should enable participants to-

Share forecasts

Determine the status of orders in real time

Access inventory data of partners

Requirements for a successful supply chain

Successful supply chain requires-

Trust- it is essential for major trading partners to trust each other and feel confident that partners share similar goals and that they will take actions that are mutually beneficial.

Effective communication- effective supply chain communication requires integrated technology and standardized ways and means of communicating partners.

Supply chain visibility- it means that a major trading partners can connect any part of its supply chain to access data in real time on inventory levels shipment and similar key information.

Event management capability- it is the ability to deter and respond to unplanned events such as delayed a warehouse running low on a certain time.

Performance matrixes-these are necessary to confirm that the supply chain is functioning as expected or that are problem that must be addressed. There are varieties measures that can be used relate to such things as late deliveries inventory turnover, response time, quality issues and so on.

Review of literature

Tedeusz sawik. Omega- The author depicted that the optimal selection of supply portfolio in a make to order environment in the presence of supply chain disruption risk. A set of customer orders for products the decision maker need to decide from which supplier custom parts required for each customer order to minimize total cost and the impact of disruption risk. The selection of suppliers and allocation of order is based on price and quality of purchased parts and reliability of delivery. The two type of disruption scenarios- scenario with independent local disruptions of each suppliers and scenarios with local disruptions. The problem is formulated as single or bi objective mixed program and value at risk and conditional value at approach is applied to control the risk of supply disruptions. The portfolio optimize the supply by calculating value at risk of cost per part and minimizing expected cost per part simultaneously.

Derek Atkins, Liping Liang- In this article the author depicted that there are two papers in the theory of supply chain outsourcing under completion. The first paper studies the impact of competitive intensity on the outsourcing decision from the supplier’s point of view for linear supply cost; the second paper examines the impact of supply economies of scale from the retailer’s point of view when selling perfectly substitutable products. By considering competitive intensity and supply economies of scale simultaneously, they find that equilibrium channel structures are primarily determined by the competitive intensity, which is true even under supply. The key message in the second paper of scale economies driving retailer’s outsourcing supply decision is highly dependent in the assumption of perfect substitutes. The finding has no qualitative difference when either the suppliers or the retailers are the channel leader and make the outsourcing decisions.

Jan Olhanger- in this article the author depicted that there is concerns both manufacturing and supply chain operations. The customer order points is getting increasing attention as an important input the design of manufacturing operations as well as supply chain. The impact of the position and role of the CODP in issues of concern for the production and supply chain management. The focus is on the design and strategic planning aspects of supply chain and the design of manufacturing planning and control system. The purpose a dual design approach for production and supply chain planning systems. One type of system for operations upstream the CODP and another type of system for downstream operation in order to fully support the characteristics and objectives of each respective part of the supply chain.

Yingxue Zhao, Shouyang Wang, TCE cheng, Xiaogi Yang, Zhimin Huang- Author depicted that manufacture retailer supply chain commonly adopt a whole sale price mechanism has often led manufacturers and retailer to situation of conflict of interest. Such conflict between retailer and manufacturer can result in an inefficient supply chain. Motivated by this problem we talk a cooperative game approach in this article to consider the coordination issue in a manufacturer retailer supply chain using option contract. The study that compared with the benchmark based on the whole sales price mechanism option contract can coordinate the supply chain and achieve improvement. There is also discussing scenarios in which option contracts are selected according to individual supply chain members risk preferences and negotiating powers.

S k vickery, C droge, P Setia, V Sambamurthy- in this article author depicted that the role of supply chain information technologies and supply chain organisations initiatives in business performance in manufacturing firms. They explain two competing models both of which incorporate as a mediator between the use of SCIT and firm performance the model differ in how the impact of SCIT are manifest. In one model SCIT and SCOI are hypothesises to have separate effect on agility which then impacts firms performance in the second model the interaction of SCIT and SCOI impacts directly. That result show that is full mediator related to firm performance in both models. The model with complementary interactions fit better. This result shows that how manufacture companies can position their investment in SCIT and SCOI to enhance overall performance.

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