Strategic Supply Chain Management

Supply chain goals

The overall goal of a supply chain is to bring together various organizations together with activities connected to the movement of goods as they change the value from being raw to finally being usable to the end user who is usually the consumer (Minis, 2011). Therefore, the overall goal of the supply chain is to ensure that the good demanded to reach the end user through various channels that are linked to one another as the product moves from one point to another before reaching the end user (Shapiro, 2007).  As such, the transformation of the product occurs in the supply chain to ensure that it is usable by the consumer.

 

Responsive and efficient supply

A responsive supply chain a faster reaction to changes in demand for a certain product in the market (Li, 2007). This model suits a business environment where the demand predictably low and the error of forecasting high. Also, the product involved has a short life cycle, and the introduction of new products are frequent with the product variation being high. The design of a responsive supply chain encompasses an emphasis on faster reaction times within the supply chain, quick delivery times, volume flexibility and customization. The features that accompany the design of a responsive supply chain intermediate or flexible flows, large capacity cushions, low levels of inventory, and small cycle times.

A supply chain that is efficient, on the other hand, focusses on the coordination of services and material flow to ensure the inventories are reduced greatly and increase the efficiency of service providers and manufacturers in the supply chain (Bidgoli, 2010). An efficient supply chain is best suited to a business environment that has high predictability in demand, life cycle of the product is long, the error in forecasting is low, the introductions of new products are irregular, and the variety of products is minimal, lead time in production is long and the lead time in fulfilment is short. The features in the design of such a supply chain includes capacity cushions that are low, bulk volume production, and line flows.

Optimizing supply chain management to improve results and remove obstacles

Optimization of the supply chain entails the use of tools and processes in ensuring that operations regarding distribution and manufacturing take place optimally. Organizations study supply chain to come up with empirical information on the various products and the related operation costs. Carrying out such research using an electronic platform and information they have gathered over time helps them determine if the supply chain has some ineffectiveness in it. . Thus, organizational need to ensure that inventory in the supply chain is organized optimally to minimize unnecessary operations and their resultant costs (Hugos, 2010). The organizations should thus maximize on gross margin return on inventory invested and reducing operations costs and eventually increasing the gross profit of goods and services in the supply chain. The manipulation of large databases has enabled organizations to increase their forecast and thus help them anticipate demand. Many organizations to use applications that involve best-fit models or stochastic models to manipulate the data to increase optimization and increase profitability as a result. Such date increases predictability of demand in the market and helps the organization prioritize their activities. Studying the customers and differentiating is important in supply optimization. There are deliveries that are more critical and urgent than others. As such, large companies like mail order pharmacies with a huge customer base need to differentiate between their customers in knowing which products they need to reduce shipping costs and other operations costs (Plenert, 2014). Another example is ABC Inc. that a seed company that had the problem of differentiating its customer needs. It got a consultant who was able to come up with a software that would help in forecasting customer needs and make a production plan and to meet production and distribution needs.

Recommendation on supply chain optimization

Customers are an important part of supply chain management. Not all customers have the same preferences since most require different services from companies. Companies should, therefore, create information systems from the beginning of their business or include former customer data to ensure that as they grow they can forecast on the needs of the market and have a vivid picture of demand for the various products in the market. Most companies lose contact and even lack most of the knowledge they had before they expanded their operations. Therefore keeping up with the customers will help in reducing unnecessary costs and ensure that profitability and efficiency in the supply chain are maintained optimally.

Business should also learn from others that have dealt with similar problems. Companies should study their customers to determine if their needs are urgent or not. Urgency matters since it will help companies concentrate on those customers that have urgent orders and prevent any catastrophes hat may occur if a product is delayed which in turn may paint the company in bad light. Therefore, organizations should add more weight to increasing efficiency in the supply chain management by focusing on demand and the end users of their products.


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