Research Paper on Benefits of Supply Chain Management, Simplification & Collaborative Commerce

Introduction

Supply chain management systems are critical to the success of a business. However, to fully harness its benefits, supply chain management, supply chain simplification, and collaborative commerce must be linked harmoniously. Supply chain management refers to a network of all business procedures and pursuits involving the acquisition of raw materials, production, and distribution management of finished goods. It ensures the creation of the right product, at the appropriate time, as well as the delivery of the product to the right customers, at the right time (Stock & Boyer, 2009). Supply chain simplification is a sequence of procedures involved in the provision of service or product to a customer. It helps increase efficiency in production and also reduces cost. Collaborative commerce refers to the electronic empowerment of business undertakings among organizations, business partners, and consumers throughout the industry to ensure efficiency. This paper seeks to discuss the relationship between the concepts and analyze the effectiveness of supply chain management systems in chosen companies.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Relationships Between the Concepts

Supply chain management deals with the acquisition of raw materials, their manufacturing, as well as the delivery of the manufactured goods to the required destinations. Supply chain simplification picks from where supply chain simplification leaves. After goods have arrived at the destination, supply chain simplification comes up with procedures of delivering the products to the final consumer. Collaborative commerce simplifies the two by making use of new technology to search for potential markets and the acquisition of raw materials at a low price.

Factors to Consider While Analyzing Supply Chain Management Systems

Every firm should take caution while choosing supply chain management systems because it is among the significant determinants of the success of a business. First, the system must ensure proper inventory management by capturing data electronically. This helps to manage products efficiently to avoid wastage due to the expiring of products. Storage of data electronically helps the organization to make better decisions since it reveals which products are purchased more hence increasing production.

The system must also allow cost management. Organizations should effectively manage the costs at every stage of value addition. This ensures products reach the consumer at affordable prices. The responsiveness of the system should also be considered. The supply chain should be responsive to customers' needs to enhance customer loyalty, which in turn leads to better performance. Responsiveness also helps the business cope with changes in consumer needs, weather challenges, disruptions in the supply chain, and competition. It should also be environmentally friendly by reducing wastage and adhering to the laws of the land. Various legal and political factors also dictate the type of chain management system chosen by a business. For instance, various legislations can either encourage or discourage trade. This, in turn, affects the supply chain. Political unrest also affects the acquisition of raw materials as well as the supply of finished products (Sarac, Absi, & Dauzere-Peres, 2010).

Examples of Successful Supply Chain Management

Walmart has one of the most successful supply chain management. It operates more than 11,700 stores have employed 2.3 million workers, and controlling the inventory of US dollars 32 billion (Ladd, 2018). Having an efficient supply chain management has helped it to maintain such a big list. The whole organization is committed to reducing the cost of supply to enable customers to save. The company has worked to reduce the number of supply links by working directly with manufacturers. The elimination of intermediaries has helped lower costs. The company has also collaborated and entered into partnerships with various suppliers to further enhance its supply chain management (Ladd, 2018). One of the shortcomings of Walmart is that in some countries like Brazil, customers have to travel long distances to reach Walmart. This leads to massive traffic congestion and difficulties in maintaining stock.

The Coca-Cola Company also has a successful supply chain. Its products are available globally. The company's focus is placed on the consumer, who is the end of the supply chain. Therefore, the company has over the years sought to enhance customer experience through streamlining of the supply chain. For instance, replenishment of dispensers and automated reporting are some of the innovations that have enabled the company to remains ahead of its competitors. Coca-Cola has also heavily invested in supply-chain insights technology as well as real-time location. The company also seeks to reduce the carbon footprint of its supply chain by enhancing material sourcing, manufacturing, package, as well as delivery. The major downside of the company's supply chain system is that it significantly contributes to pollution. However, as discussed above, the company is on a mission to address this (Nagendra & Kansal, 2015).

Examples of Unsuccessful Supply Chain Management

Several companies got it wrong when it comes to supply chain management. For instance, in 2017, Mattel had to recall its toys after it was determined that they contained high levels of lead. This brought to the fore the challenges associated with reliance on offshore suppliers. The toys were made in China (Ovenden, 2019). General Motors is another company that experienced an unsuccessful chain of supply management. In the 1980s it decided to increase robots in the factory from three hundred to fourteen thousand. Unfortunately, the robots did not work as expected, leading to a decline in productivity and a rise in costs. This ultimately led to a reduction in the company's market share (Ovenden, 2019).

Advantages and Disadvantages of Building Supply Chain Systems

First, supply chain systems reduce costs through efficient inventory management. Second, it raises output due to improved communication and collaboration of the parties involved. This leads to increased profits. However, as departments increase, departmental wars arise. Also, as organizations increase, decision making becomes slow due to the high number of people involved. Lastly, focus on supply chain systems may cause the firm to give more attention to information technology instead of customer needs (Garrido-Azevedo & Carvalho, 2012).

Conclusion

This discussion has shown that supply chain management is usually a significant determinant of success. Businesses, therefore, must strive to link the various elements of supply management systems harmoniously. Moreover, several factors must be considered when choosing a supply chain system. When well implemented, companies can achieve similar successes to those achieved by Walmart and Coca Cola.

References

Garrido-Azevedo, S., & Carvalho, H. (2012). Contribution of RFID technology to better management of fashion supply chains. International Journal of Retail & Distribution Management, 40(2), 128-156. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/09590551211201874

Ladd, B. (2018, September 9). Playing To Its Strengths: Why Walmart Must Focus On Its Stores And Logistics. Retrieved from Forbes: https://www.forbes.com/sites/brittainladd/2018/09/09/playing-to-its-strengths-why-walmart-must-focus-on-groceries-stores-and-logistics/#5435c82c1e06

Nagendra, A., & Kansal, S. (2015). Reducing Carbon Footprint through Green HRM. SAMVAD, 8. Retrieved from http://www.samvad.sibmpune.edu.in/index.php/samvad/article/view/98297

Ovenden, J. (2019, May 22). 5 Great Supply Chain Failures. Retrieved from Innovation Enterprise: https://channels.theinnovationenterprise.com/articles/5-great-supply-chain-failures

Sarac, A., Absi, N., & Dauzere-Peres, S. (2010). A literature review on the impact of RFID technologies on supply chain management. International Journal of Production Economics, 128(1), 77-95. Retrieved from https://www.sciencedirect.com/science/article/pii/S0925527310002835

Stock, J. R., & Boyer, S. L. (2009). Developing a consensus definition of supply chain management: a qualitative study. International Journal of Physical Distribution & Logistics Management, 39(8), 690-711. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/09600030910996323