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Key Elements of Supply Chain Design


“The key challenge is to integrate supply chain capabilities to provide a seamless solution from potential design through to end delivery. End users are looking for a complete supply chain where there is single accountability and responsibility for delivery,” said O’Brien.

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To begin with, it should be stated that it is often regarded as the network of suppliers, factories, and distribution departments, which are engaged in the retail of the raw materials and the manufactured goods. Originally, the raw materials were delivered to the manufacturer, and then the goods were retailed to customers. It is necessary to emphasize that the flow of this process should be adjusted without any delays, and the credibility of failure should be minimized, as it is crucial not only for a manufacturer but also for the industrial sector in general.

The design of the seamless supply chain is a matter of strategic, tactical, and operational levels of planning and management; consequently, the design process should be optimized. The strategic level entails the creation of the network of suppliers, supply routes, manufacturing powers, warehouses, etc. The tactical level is the phase of planning and scheduling the chain for meeting the manufacturing and consuming requirements. The operational level is the level of actual implementation of tactical and strategic plans.

Supply Chain Design

For the supply chain was really seamless, and the end-users could really rely on it, there is a strong necessity to optimize the design process. The supply chain functions should be integrated into a single system, and the dynamics of the enterprise should strictly coincide with the dynamics of the supply. It is explained by the fact that if the delivery of the raw materials is delayed, the production process fails, employees stay workless, and the customers change the business partners. According to Boone (2002): “these events may be dealt with locally, i.e., they lie within the scope of a function. In other cases, the problem cannot be “locally contained”; modifications across many functions are required. Consequently, the supply chain management system must coordinate the revision of plans/schedules across supply chain functions.” The overall design process should take into account numerous factors and particularities of the sphere it is intended for; nevertheless, the general features that should be attributable to a seamless supply chain are the following:

  • The supply chain functions should be easily decomposable from the integrated system for quick redesign or restructuring in the case of urgency.
  • Each functional agent should have its own plan of action if the system is intended to be decomposed. Anyway, each agent should clearly realize its functions and responsibilities.
  • The functional domain of every agent should be able to get extended.

In the light of the fact that Supply Chain design and management is the highly responsible process, Boyer (2005) emphasizes the fact that: “supply chain management is a cross-function approach, which should be aimed at managing the movement of raw materials into an organization. As organizations strive to focus on core competencies and becoming more flexible, they have reduced their ownership of raw materials sources and distribution channels.” For the system corresponded with these requirements, the design process should be divided into several phases:

  1. Creation Phase. This phase is intended to define clearly all the functional agents of the supply chain and provide the action plans for every agent.
  2. Integration Phase. Integration entails the start of the activity and testing of the possible weak points.
  3. Globalization Phase. This phase is intended to launch the activity of the whole chain and search for new functional agents in the case if the existing ones would fail their assignments.
  4. Specialization Phase Stage One Outsourced Manufacturing and Distribution
  5. Specialization Phase Stage Two Supply Chain Management as a Service

The fact is that several models exist for managing and creating the faultless supply chain. The movements of the raw materials are comparatively easy to trace and correct in the case of necessity; however, the supplies of the manufactured goods are less controllable; consequently, the Specialization Phase, Stage Two, should be aimed at creating an effective monitoring system.

As for the matters of monitoring in general, it should be stated that it is the basis of the effective and seamless supply. Nevertheless, the supplier should be trusted, for the monitoring did not require too many resources. The Resource-Based View, which is regarded to be one of the most effective theories for supply chain design, is mainly based on a monitoring system; nevertheless, proper planning and careful implementation will help deal without serious monitoring.

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The design of the seamless supply chain is generally a matter of proper management and careful and thorough planning and implementation of the designed principles. The fact is that it is impossible to create a perfect supply chain; nevertheless, it is quite simple to control the functional agents of the chain and restructure the chain itself in the case of necessity if these changes are properly planned.


  1. Boone, Tonya, and Ram Ganeshan, eds. New Directions in Supply-Chain Management: Technology, Strategy, and Implementation. New York: AMACOM, 2002.
  2. Boyer, Kenneth Karel, Markham T. Frohlich, and G. Tomas M. Hult. Extending the Supply Chain: How Cutting-Edge Companies Bridge the Critical Last Mile into Customers’ Homes. New York: AMACOM, 2005.

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