Supply Chain Management in Thailand Essay

Supply chain management has become a critical issue among different industries across the world. It assists in enhancing competitiveness and profitability for organizations as well as other members integrated within the network. Besides, efficient management of supply chain activities has become a critical tool for minimizing uncertainty of supply and enabling delivery of superior customer service (Chaiwuttisak et al., 24). However, mere implementation of supply chain management concept does not necessarily translate into high organizational performance. The survival, success, and sustainability of competitive position of firms within an industry requires implementation of various, critical supply chain features. Therefore, this paper aims at exploring logistics and supply chain management components and analyzes how they establish strategic advantages with the primary purpose of maximizing and sustaining their competitiveness and performance.

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Supply chain management emerged as an area that requires particular consideration across Thailand. Empirical evidence shows that supply chain networks are currently able to span across multiple geographic locations, thus increasing levels of risk; both operational and environmental. A critical case is in point occurred in 2011 when Thailand experienced floods that disrupted distribution channels. The result was a dire shortage of supplies for industries. The resulting disruption did not only affect the manufacturing sectors but also extended to the food and beverage industries across the nation (Heckmann et al. 124). The Thai Floods, as well as other environmental incidences, are some of the factors that influence the need to establish a risk management program and sustainable logistics management strategy across supply chain networks.

Supply chain management plays a crucial role across all industries in Thailand. Various research findings have determined that supply chain management is a critical component that can assist the economy to improve effectiveness within the service sector in the country. Thailand has a number of state of the heart hospitals that make it a critical player as a medical hub in the region. Besides, the nation predominantly known for high growth of manufacturing industry has also been experiencing unprecedented growth of the service sector. The advent of globalization implies that supply chain networks are not merely confined to Thai national borders (Fujita and Nobuaki 83). Therefore, the government has been relying on specialized logistics service providers to deliver superior supply chain and logistics services for the local as well as international clients. Some of these service providers that have played instrumental role in assisting the government deliver services include customs brokers and freight forwarders. They assist in undertaking the critical role of facilitating the movement of products across the country as well as developing efficient and effective logistics solutions for their clients.

Over the years, Thailand has gained the global reputation of a producer of high quality, low-cost commodities. Many factors influence the competitiveness of globally traded items. However, these increase the total cost of supply chain networks. Therefore, when designing a supply chain system that will enhance competitiveness and improve performance, the government often take into consideration some inherent factors, which include transit time, uncertainties and risks, safety and security of goods and the costs of transferring the commodities from one location to another.

Adequate consideration of these supply chain factors improves the benefits of trading activities. Enhancing the competitiveness of existing supply chain networks require all stakeholders need to adapt their trade to reflect the supply chain requirements of a customer. In the same enthusiasm, according to Heckmann et al. (127), Thai government must focus on providing the logistics service providers with the critical factors that are necessary for guaranteeing and stimulating their level of service required to ensure efficiency in storage and transportation of goods.

The increasing expansion of global markets coupled with the need to provide superior products and services at relatively low costs has forced Thai firms to identify alternative means for reducing costs. This is achievable through outsourcing logistics activities. In essence, this practice has played a critical role in reducing operating expenses while also enabling the firms to gain competitiveness. Besides, the need to outsource logistics activities among Thai firms has been partly fuelled by the rising need for the firms to focus on their core competency areas. It is in this spirit that firms have been outsourcing their non-core activities to third parties. Through 3PLs, companies can improve the efficiency and competitiveness of their services by acquiring the services of clients with considerable experience and necessary expertise that helps to do the work using minimum cost (Mohd et al. 101). According to the existing research evidence, 3PLs plays a critical role in improving the competitiveness and efficiency of supply chain management across Thailand. The third-party companies can design systems that enhance their competitive advantage.

Conclusion

Supply chain management process such as scheduling, shipment, and production of materials is decentralized and remote across Thailand. These processes are usually operated independently. As a result, they are in most cases characterized by low feedback thus affecting other supply chain processes. Besides, most companies face the imminent challenge of the high cost of logistics facilities, which results due to the cumbersome administrative barriers, inadequate physical facilities and legal framework that does not align with the modern business practice. However, logistics service providers have become a useful tool in this area. They perform among other things value-adding and other critical functions that benefit all players across the supply chain network. Chaiwuttisak et al. (29) opines that logistics service providers perform the crucial function of developing and designing effective supply chains that integrate different members into a seamless supply chain system. The improvement of logistics function makes it possible to realize the potential of an integrated supply chain among Thailand organizations.

Works Cited

Chaiwuttisak, Pornpimol, et al. "Blood supply chain with insufficient supply: a case study of location and routing in Thailand." Lecture Notes in Management Science 6 (2014): 23-31.

Fujita, Masahisa, and Nobuaki Hamaguchi. "Supply chain internationalization in East Asia: Inclusiveness and risks." Papers in Regional Science 95.1 (2016): 81-100.

Heckmann, Iris, Tina Comes, and Stefan Nickel. "A critical review on supply chain risk-Definition, measure and modeling." Omega 52 (2015): 119-132.

Mohd Yusoff, Yuhainis, Hasbullah Ashari, and Mohamed Najib Salleh. "The Impact of Supply Chain Management as Mediator between Strategic Orientations and Supply Chain Performance." International Journal of Supply Chain Management 5.2 (2016): 101-107.