Essay Sample on Supply Network Strategies

Introduction

Supply network strategies are effective tools that enable companies to compete favorably in the market. Through the supply network strategies, it becomes easier for the companies to distribute its product into various regions where it has to deliver the product to the customers.

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For an effective competition, companies must be strategically placed within the market to be able to gain market access and deliver its goods and services effectively. Recent studies by Moraitakis, Huo, and Pfohl (2017) posit that a firm needs to unlock its strategic potential by aligning the competitive priorities to its supply network strategies. A good supply network strategy aligns its supply capabilities and resources to the market conditions. Going global requires a more diversified supply chain network strategy that will necessitate proper navigation of the wider market coverage. As the company expands its territories, the need for a more diversified and innovative network becomes necessary. Due to their complex networks in managing hundreds of sub-suppliers located in many places, large multinational companies make use of network sourcing strategies. Through the network sourcing strategies, the companies acquire their raw materials centrally and distribute to the entire network of sub-suppliers (Moraitakis, Huo and Pfohl 2017). This implies that with an increased level of commitments, responsibilities, and capacity, companies need to expand their supply chain network by adopting new strategies that suit the situation and that will enable proper navigation into the market. An organization must develop a strategy to be able to meet its supplies and compete favorably with its competitors.

The end of a supply chain network is to reach the customers who are the most valued in a network of strategies. A company must strive to reach the customers and provide them with an easy to access atmosphere. Companies are endowed with a plethora of strategies such as collaboration with other companies to be able to reach the customers. According to Slack and Lewis (2003) companies need to adopt new and appropriate technologies. This is further enhanced by Thomas (2013) who found that in the global contexts, firms develop a framework of global manufacturing networks and extend their coverage. To achieve such strategic network frameworks, supply network strategies necessitate the design. The outcomes include the ability to address the supply chain challenges in the global context and gaining a competitive advantage over competitors (Moraitakis, Huo and Pfohl 2017). It is hence possible for companies to manage a network of supply chain in order to reach its customers in their respective markets. However, to succeed, firms need to adopt network strategies through proper management, partnerships, vertical integration, use of technology, collaborations, innovation, and competency. In addition, the companies should be able to coordinate, differentiate and reconfigure its network management to achieve maximum benefits (Slack and Lewis, 2003). Competition in the market plays significant roles in designing suitable supply network strategies. It has been shown through research that there is a relationship between the firms' competitive priorities and the supply network strategies. Therefore, supply network strategies and the competitive priorities exist coexist.

A conceptual model on supply network strategies classifies strategic alignment and integration of new product development as the two broad determinants that lead to supply chain competence. Competence of the supply chain indicates a level of perfection where it is working as intended and achieves its intended results. Strategic alignment, integration of new product development, lead to innovation and supply chain competence. However, to achieve that, the firms must have the adsorptive and desorptive capacity. Innovation is an important bridge that leads to supply chain competency. In the other hand, the firms absorptive and desorptive capacities are the pathways that lead to innovation and consequently to supply chain competency. The figure below shows the conceptual framework that governs the supply network strategy entity.

There is no definite definition of supply network strategies; however, some researchers have tried to define it. Gadde, Hakansson, and Persson (2011) describe supply network strategies as the manner in which the companies initiate their relationship with suppliers to become more efficient and innovative in their performance. As companies grow and become diverse, they star adopting long-term investments and face greater competition. To sustain their increased growth, and competitive advantage, companies, start adopting innovative business methods of operation. An organization has to transit from their initial short-term perspective of supply networks towards a more competitive and long-term strategic perspective. Transition into a complex system requires the adoption of a supply network strategy that incorporates the entire transformation system such as resources, competencies, and capabilities. From the various scholars, it is evident that supply network strategies are the initiatives that the company adapt to reach their suppliers and customers through innovation, management, resources, and capabilities. Supply network strategies are of great significance and concern to the companies because if disrupted, severe problems affecting both the company and the economy can arise. If the supply network is not effectively managed, any sever unanticipated events can lead to critical interference to the normal flow of raw materials and goods. Based on their study, Bello and Bovell (2012) report that severe disruptions of the supply chain network can implicate huge costs both to the company and the economy of the country. The recent evolution of globalization is associated with the disruptions in supply networks. If the supply network is not probably managed, a serious problem can arise. The supply network becomes vulnerable such that any disruption can lead to its failure. It was further established by Kessler et al. (2012) that with the increased complexity and global perspective of businesses, supply chain management experience many challenges. A focus on recent studies by Moraitakis, Huo, and Pfohl (2017) further established that the possibilities of undetected bottlenecks and inefficiencies in supply networks due increased complexities of global supply networks are high.

Although there is some literature showing that supply network can result to severe challenges, conversely, supply chain network is of great importance since when it is effectively, appropriately and timely used, it leads to many benefits in a firm. Moreover, it necessitates the delivery of goods and services in a timely manner (Bello and Bovell, 2012). It can, therefore, not be abandoned for any business that intends to become successful or maintain the competitive advantage. Research has shown that supply network disruptions are inevitable; however, their prevalence can be minimized through the adoption of suitable strategies. To properly manage the supply network, suggests the use of strategies such as outsourcing, innovation, management, alignment among others (Bello and Bovell, 2012). Supply network are enhanced through collaborations, alliances and management or resources. According to Zhang (2011), forming alliances allows an organization to elaborate their collaborations. When implemented properly, such strategies can ensure that the disruptions are minimized and ensure smooth supply network. It has also been established that supply network behavior, the network perspective, network management, both qualitative and quantitative network dynamics, coordination, differentiation, and reconfiguration are effective behaviors that can minimize disruptions of the supply network (Slack and Lewis, 2003). Such strategies try to enhance the relationship between the competitors, suppliers, customers, those who complement and the company. A good supply network strategy creates a value net to the company. New studies show that other strategies include the use of lean, agile, or lean/agile (Ambe, 2014). Studies in the recent years by various researchers such as Moraitakis, Huo and Pfohl (2017) and have cited the need for the use of alternative strategies that can necessitate the growth of the company and industry. Moraitakis, Huo, and Pfohl (2017) posit that a better supply network can be developed by aligning it. All the above shows that the challenges faced in the supply network are not critical to the extent that they cannot be managed. With proper and effective use of the strategies highlighted, it is possible to overcome them making the business prosper.

Strategic Alignment

The growing complexities facing the supply network can hinder the competition with other firms. Edirisuriya and Johannesson (2009) posit that the demands from the customers are on the rise and unlimited. Customers will keep on demanding more from the seller and this demands that utilization of better strategies that will meet the demands of the customer. Hence, the utilization of strategic alignment can be of great use to the company. Recent research has indicated that strategic alignment has been used in vehicle manufacturing companies in South Africa and has been found to be successful (Ambe, 2014). Moreover, Edirisuriya and Johannesson (2008) found that for any company intending to establish global sales, global supply network is inevitable and must use strategic alignment.

To address the many challenges that face the supply network in a global context, strategic alignment needs to be adopted. Since the strategy of the entire business does not differ significantly from the supply network, it is imperative to align the two. Morrison et al., 2011) defines strategic alignment as method that allows proper understanding of the business and how its processes relate to the strategies. According to Bleistein, Cox and Verner (2006), strategic alignment applies when the goals and the activities of a business exist in harmony with the systems that augment them. Although the article uses strategic alignment in the context of use of IT in a business, the concepts fits in the supply network perfectly. While Bleistein, Cox and Verner (2006) relates how IT should align with the business strategy, supply network relates how strategies used in the supply network relates to the business processes, vision and strategies.

Strategic alignment ensures that the business process and resources are effectively organized for effective competition (Morrison et al., 2011). Additionally, strategic alignment allows the business to develop plans that are achievable in accordance to the visions of the company. However, aligning the supply network requires proper planning and management. Imperatively, supply network, planning, and management do not work in isolation but in tandem. Additionally, the entire business and the management must be ready to take up the responsibilities and implement the strategies laid down. As identified by Li et al. (2006), strategic alignment requires that long-term relationships are implemented. The establishment of a long-term relationship between the company and the suppliers ensures that the reputation of the company is enhanced, and the cost of incurred is reduced De Souza Miguel et al. (2011). Such an initiative allows the company to compete globally and gain a competitive advantage over other firms. Ambe (2014), posits that strategic alignment aims at enabling a business to achieve the goals that it has set to achieve within the set duration. According to Ambe (2014), successful implementation of the supply netwo...