When Stages of the Supply Chain Are Considered Separately, why Is Sub-Optimization Likely to Occur?
One of the adverse outcomes of increased performance monitoring is the inclination of the organizations to aim attention at a limited scope of goals. Such a process is called sub-optimization (Nohrstedt, 2015). The major reason why sub-optimization occurs is the hierarchical character of the majority of companies, due to which the employees are stimulated to concentrate on their local interests and neglect the higher-level objectives of the overall organizational performance. A productive way of measuring sub-optimization is evaluating the level of the employees’ and managers’ involvement in the work dedicated to emergency preparedness (Nohrstedt, 2015). When the personnel is actively engaged in such a kind of training, there is a lower risk of sub-optimization within an organization.
To organize the successful operation of a supply chain, it is necessary to provide a centralized system and a regular flow of operations (Jacobs, Berry, Whybark, & Vollmann, 2011). A framework for supply chain logistics requires the integrative thinking approach (Grant, Trautrims, & Wong, 2017). When the stages of the supply chain are considered separately, there is no consistency, and the elements of the supply chain are not connected. Under such circumstances, sub-optimization is rather likely to occur. The quality of the supply chain falls, and there is no possibility to track the deliveries.
Green, Zelbst, Meacham, and Bhadauria (2012) emphasize the significance of sustainability in supply chain management. The authors remark that the consistent flow of supply chain stages makes it possible to organize successful operational performance which, in turn, improves the organizational performance (Green et al., 2012). Therefore, the consistency of the stages in the supply chain is of utmost importance since it enables the organizations to avoid sub-optimization.
In What Ways Are Warehouses Beneficial to Customers?
Warehousing is a crucial element in the logistics management system. Warehouse management provides several benefits for customers. The most advantageous features are concerned with place and time utility (Jacobs et al., 2011). This means that warehouses situate the products nearer to the clients both in terms of time and distance. However, the idea of keeping warehouses is not always worthwhile.
Defining its productivity is the task of the market value of the product closeness (Pheasey, 2016). Customers find warehouses a rather good opportunity to save time on getting to the place where they make purchases. When warehouses are situated close to the markets, there appears a positive competitive advantage. Jacobs et al. (2011) define such a situation as the “warm puppy effect” (p. 402). The meaning of this suggestion is that having a possibility to go to a warehouse gives customers the impression of comfort. However, this effect has not been properly quantified yet, and the only available way of determining the proximity value is calculating the costs of keeping warehouses.
Another advantage of warehouse management for the clients is at a lower price. Because warehouses store large amounts of products, they are capable of setting the prices lower than the markets. Such a benefit is highly appreciated by the customers who prefer to make purchases in these places. Considerable choice opportunities attract people who like to compare and contrast the goods and choose the most suitable ones.
One more positive feature of warehouse management is the possibility to choose from a variety of production companies. Unlike small markets that have contracts with a limited number of delivery organizations, warehouses cooperate with many plants and factories. This opportunity is especially favored by customers.
References
Grant, D. B., Trautrims, A., & Wong, C. Y. (2017). Sustainable logistics and supply chain management: Principles and practices for sustainable operations and management (2nd ed.). New York, NY: KoganPage.
Green, K. W., Zelbst, P. J., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management practices: Impact on performance. Supply Chain Management: An International Journal, 17(3), 290-305.
Jacobs, F. R., Berry, W. L., Whybark, D. C., & Vollmann, T. E. (2011). Manufacturing planning and control for supply chain management (6th ed.). New York, NY: McGraw-Hill.
Nohrstedt, D. (2015). Paradigms and unintended consequences: New public management reform and emergency planning in Swedish local government. In J. Hogan & M. Howlett (Eds.), Policy paradigms in theory and practice: Discourses, ideas and anomalies in public policy dynamics (pp. 141-164).
Pheasey, D. (2016). A practical introduction to supply chain. Boca Raton, FL: CRC Press.