Essay Sample on Supply Chain Importance

Abstract

Corporate interest has risen over the years over sustainable supply chains especially to small and medium-sized manufacturers. Supply chain sustainability as the overall approach to maintaining the supply chain is thoroughly addressed, and its impact on the supply base, customer base, and internal operations and how it can be implemented in companies is a constant business topic. Many companies and enterprises seem to be leaning towards supply chain sustainability and some governments in various countries are starting to view it as a regulatory requirement.

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There is need therefore to discuss the function of sustainability in supply chains, the importance that comes with it and the whole concept of the shift from traditional firm-level supply chain to the competition of firms through supply chains levels due to worldwide growing environmental and ethical awareness. To achieve this, the paper is divided into three parts: the first part discourses the scope, importance, and impact of sustainable supply chains. Section two discusses the importance and opportunities for organizations to apply sustainable supply chain practices.

Lastly, the paper talks about how to develop a roadmap for supply chain sustainability and how the map can be used to a conventional global chain. From shareholders through the government to consumers, there is an increase in pressure for the need to develop sustainable supply chains. The change cannot only be achieved by an individual company's efforts but only if all members of the supply chain work cohesively with each other. The purpose of the paper, therefore, is to systematically review the outcomes of sustainable supply chains, particular importance to organizations and how to incorporate them and finally provide information to enterprises on how supply chain sustainability is beneficial globally if carefully developed.

Introduction

In the business world, there are producers, the consumers as well as the distributors. All of them play a very important role in the welfare of the business, and their roles are joined together by a single method that is referred to as supply. The practice of supply ensures that one product gets from one point to the other through transportation. Usually, both supply and transportation are thought to be the same thing because they both result in the movement of a product from one person to the other. The quantity of goods supplied in a market relies on the price alongside other factors including the prices of substitutes, factors of production, availability, and technology amongst others. While holding the other factors constant, the prices of the commodities determine quantity supplied. Supply is a useful factor to analyze a market based on the quantity supplied and prices of the commodities.

Logistics companies are an essential part of the supply chain in almost every industry available; these companies create value in the supply chain due to their reliability. Almost all business organizations in the modern era are looking to expand their operations either globally or region wise, delivering products or moving materials to these new regions has posed a challenge to most of these companies something the logistics companies deal with very efficiently and in a very professional manner.

When a firm is global, there is a need to have a well-designated department that handles all their activities which revolve around moving their products. It is through the movement of these products that firms are able to make sales to their customers and at the same time be able to offer a well elaborate flow of raw materials that they use to create the particular product. Supply chain management offers all the needed logistics in regards to getting raw materials for the company and supplying the finished product to the customers in the most efficient way possible.

The Scope of Sustainable Supply Chains

The supply chain is the order of processes that a commodity undertakes from the producer to the end user while supply chain sustainability is the holistic view of issues affecting an organization's supply chain network in terms of risks associated with the chain, for example, economic costs (Iowa state university, 2012). It involves the production and distributing of products through partnerships that a firm adopts with suppliers and distributors to deliver value to customers. Since most producers do not sell their products directly to the consumers, managing the supply chain is important because it enhances the conversion of inputs into outputs as well as the movement to the final consumer.

Any time a client is looking to start up a construction project, he/she will contact a supplier who will then offer his services with the help of a specialty contractor. In most cases the specialty contractor will consult with a general contractor and both will strategize on when and how the construction will take place. Companies are responding to pressure from consumers and investors and sometimes employees, companies across the world by striving to implement sustainable components in their supply chains to design them in a way that they can deliver and not only focus entirely on customer satisfaction but even conforming with international laws (Giannakis& Papadopoulos 2016).

In a supply chain, Forecasting goods and services demand is essential to every supplier, a company, or the retailer. Forecasting determines the amount of product that should be purchased, manufactured, and transported. Demand forecasts, therefore, are crucial to the fundamental operational process of shipping from the suppliers' unfinished materials to finished products in the customer's possessions, consumes a lot of time. Thus, precise demand foretelling leads to well-organized, active and profitable operations with more exceptional levels of customer service. On the other hand, inaccurate forecasts will indeed result in inefficient, unproductive and ineffective costs of operations accompanied by poor customer service experience (Arndt, 2004).

The critical aspect of sustainability is the application of the holistic view that focuses on areas that mostly impacts the supply chain and how they can be improved. The approach, therefore, encompasses the entire lifecycle of a product or service through the whole supply chain making it insufficient to be confined within the walls of the company but prompts the company to look beyond this confines when addressing sustainability. A well-crafted sustainable supply, therefore, measures the profits and loss as well as the social and ecological extents as a global strategy because business can no longer revolve around financial performance. The principle that sustainability is the intersection of social, economic and environmental performance has conceptually been referred to as the triple bottom line (Christopher, 2016).

Therefore, sustainability concepts that the success of a business should not only be measured by traditional financial returns but also by their ethical and ecological performance. The argument is that companies that evaluate their performance using the triple bottom line are more likely to meet their short-term objectives and succeed in the long run implementing sustainability in supply chains more complicated especially for companies that are profit motivated(Iowa state university, 2012)

Importance of Sustainable Supply Chains

Most experts predict that supply chain operations will become an integral part of companies and therefore the need for sustainability (Turker and Altuntas2014). Supply chain sustainability is important because it improves community relations by becoming aware of the impacts that corporations have on society. Loyalty and trust are therefore fostered between the customers and the company and as a result of the reputation the company is maintained (Epstein, 2018). It is critical that the company is in good terms with the community for it to continue conducting business daily for profits to keep trickling in.

Secondly, Johnsen, Howard, and Miemczyk (2014) put across that sustainability in supply chains leads to reduced costs regarding reduced consumer lawsuits because of improved product design and brand equity by ensuring that manufacturers and suppliers are ethical. Reduction of materials, labor and transportation cost, is another primary goal of a sustainable chain. Efficiency is realized if the company reduces cost while at the same time providing consumers with the right quality.

Additionally, environmental and social risks are managed because the company makes sure it adheres with the government requirements of corporate social responsibilities while ensuring that it disposes of waste well. Verification of the supplier through quality approach is done before purchasing a product to make sure that it complies with the health and safety regulations stipulated by the government at its location.

Moreover, when there are sustainable production stakeholders to meet the customer's needs through the provision of quality products and increase productivity. An excellent sustainable supply chain ensures that there are no stock outs and that customer demands are met on time resulting in satisfaction and therefore customer retention. The chain understands that it is more expensive to get new customers than to retain the old ones and thus to avoid the extra costs and hustle customer satisfaction is one of its main agenda (Iowa state university 2012).

Therefore, there is a need to integrated supply chain and sustainability. The supply chain is only concerned with the distribution of goods and services, but sustainability goes deeper into distribution and views supplying and distribution as the whole institution.

Impact of Sustainable Supply Chain

A sustainable supply chain can be expensive to implement, but once in place, it reduces consumer lawsuits that would be raised if the supply chain did not observe the government regulations, for example, unlawful disposal of waste. Reduced costs ensure in turn reduce costs of operations and a continuous flow of funds (Iowa state university, 2012). Secondly, there is a retention of consumers because of the better quality and reliability of products, and because the company ensures that they get the best performance. A company can, therefore, increase price regarding quality without consumer disputes because of the satisfaction level. An increase in price leads to higher profits and thus enhancing its revenue generating ability further (Beske and Seuring2014).

A company that employs sustainable supply chain also responds quickly to change in consumer demands resulting in fewer out of stock and fast deliveries. Consequently, when a consumer is happy and satisfied, the organization also stays in business. The ability to come up with new designs for products is fast because a sustainable supply chain identifies changes in demand trends fast enough and act on them to suit the current market.

Additionally, a sustainable supply chain encourages teamwork for employees because of its greater involvement with all the players in the chain, and thus there is an increase in motivation. The sense of belonging, in turn, attracts competent workers who are skilled and willing to improve and improve in problem-solving activities, (Iowa state university 2012).

Economies of scale are also achieved and not only for the firm but the entire supply chain because of the effective cost of production. In turn, there an increase in profits because of a good customer base and lower costs of production brought about by a great collection of revenue (Iowa state university 2012).

Improved return to risk profile for the sustainable firm that is reflected in higher market s...