Every company’s goal is to effectively manage its resources, including products, as they move through the supply chain at the proper time, at a competitive price, and in the best quality. Supply chains bridge the gaps that occur when suppliers are located far from customers and help to eliminate the supply-demand mismatch. Supply chain management is an important function to ensure that products are moved as efficiently as possible. After reading and analyzing the book Diagnosing Greatness: Ten Traits of the Best Supply Chains, I have realized that any trading enterprise should manage its supply chain to carry out its activities more efficiently.
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Supply chain management is the proper organization of goods and services, starting with the creation of a product and ending with its consumption. It includes production, logistics, warehousing, and distribution of not only final products but also of raw materials and inventory that are necessary in this process (Poirier et al., 2009). The goal of supply chain management is to interconnect production and shipment. Thus, companies should control and keep the track of internal inventory, distribution, and sales.
Supply chain management considers factors that can influence the efficiency of all the processes. Possible scenarios are taken into account and solutions are developed for them. I have learned that there are various components that affect the entire supply chain, such as transportation, warehousing, sourcing, and purchasing (Poirier et al., 2009). After understanding the processes necessary for a proper operation of supply chain management, I can say that all of these elements are equally important. They must be carefully considered, not only in terms of the current competitive environment but also in the anticipation of changes in the future.
Transportation is essential for a smooth delivery, and companies should know that logistics takes a unique position, linking this organization with external suppliers, on the one hand, and customers with products, on the other. Thus, such factors as economic uncertainty, changing fuel prices, customer expectations, globalization, a changing transport industry, and labor laws can influence shipment and change the whole supply chain. Warehousing is important in the process as well, and managing warehousing functions requires a separate combination of skills (Poirier et al., 2009). Sourcing strategy is also an essential part of supply chain management. The company has to decide if it wants to do all the activities internally or use outsourcing and cooperate with an independent institution.
Organizational resources such as logistics execution and sourcing are the most important elements. A company’s supply chain includes geographically dispersed sites where raw materials and finished goods are purchased and stored, and distribution channels that connect these sites through which products move (Poirier et al., 2009). Logistics consists of managing the material and related flows, procurement management, and transportation. These elements may be operated by the focus company, suppliers, buyers, third party representatives, or other outsourcing companies.
Thus, building a strategy of sourcing is an important component of the supply chain management. Sourcing determines the cycle related to procurement, namely the identification, evaluation, and establishment of contractual relationships with the optimal group of suppliers (Poirier et al., 2009). Strategic sourcing agreements define areas of expertise to help consumers develop a successful, long-term strategy and build strong supplier relationships. It optimizes the company’s purchasing capabilities to reduce costs and delivery times for goods and services.
Collaboration is another prerequisite for the successful supply chain management. I realized that companies must pay more attention to improving internal operations which include alignment of release dates, enterprise resource planning, and automation of sales departments. Streamlining internal processes will allow any company to intensify cooperation with consumers and suppliers (Poirier et al., 2009). Ideally, there should be a perfect virtual enterprise that connects many suppliers and customers so that they all work as a single mechanism. They should maintain conflict-free connections between resource planning systems for basic transactions and legacy systems, production and warehouse systems, and solutions for consumer support.
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I think that modern companies need effective systems for managing warehouses, transportation, and solutions to other logistics problems. It is important to manage an extended supply chain when all planning processes are interconnected (Poirier et al., 2009). Today, new technologies have a significant impact on how supply chains operate across all industries. Companies have to shorten planning cycles and look for new ways to optimize supply chains to meet the high demands of customers (Poirier et al., 2009). This requires a comprehensive and scalable planning system that will allow them to quickly respond to customer requests.
The supply chain encompasses all activities related to the movement of products, from the stage of raw materials to the delivery of ready goods to the end-user. I have understood that integrated planning is important in the management of supply chain. It relates to the integration of production, warehousing, and transportation among geographically dispersed suppliers and markets. To successfully operate in a highly competitive market, trading, manufacturing, and logistics companies need to maintain high-quality goods and services, ensure accurate delivery, quickly respond to changing customer needs and maintain optimal cost levels.
Poirier, C. C., Quinn, F. J., & Swink, M. (2009). Diagnosing greatness: Ten traits of the best supply chains. J. Ross Publishing.