Supply Chain Management in Fmcg Term Paper

Pages: 10 (4046 words)  ·  Bibliography Sources: 15  ·  Level: Master's  ·  Topic: Business

SAMPLE EXCERPT:

[. . .] The focus of business in terms of reaching out to new opportunities for growth is also a notable factor in reducing business challenges faced in current environment. Large product volumes and increased customer preferences effects global manufactures and distributors. The internal and external factors influence business performance. The developments in technology have also enabled the manufactures to perform mass customizations and developing environment friendly products and services.

The capabilities of supply chain management have enabled the companies to treat suppliers of raw materials, manufacturers, distributors, and customers as strategic business partners. The concept of one time sales has long been vanished from almost all industries including FMCGs. The strategic partner's status also helps small scale partners to increase their capacity and overcome capacity shortages through effective relationships with large corporations.

The businesses are also focused to provide assistance to minatory and gender-based suppliers in establishing a secure base for business development. Numerous companies in all industries also minimize the control of suppliers over their production by building strong relationships with minority suppliers. It also leverages the supplier to affiliate with large corporations. Moreover these corporations also advertize these activities as their corporate social responsibility initiatives.

Usage of Supply Chain Management:

The usage of supply chain opportunities and technology trends has not only influenced a frequent use of these techniques but at the same time it provides a sustainable base for business growth. The opportunities in supply chain management are efficiently used by organizations throughout the world by large as well as small scale businesses according to their requirements (Autry, Grawe, Daugherty, & Richey, 2010). The applicability of the solution is dependent on the strategic objective and goals of a corporation.

The businesses present in FMCG or related industries have particularly utilized supply chain management opportunities to grow and increase business performance. These opportunities are described as usage of RFIDs, allowing the vendors to manage their inventories, manufacturing products with minimal raw material inventories, and globally sourcing high quality yet low priced solutions. The supply chain management techniques are also used in optimizing a variety of business operations (Johnson, Leenders, & Flynn, 2011).

Furthermore the application of supply chain management is also vied as an integrated approach for procurement, manufacturing, distribution, and supply of products within the global market. The positioning of a supplier is affected by its presence in a particular market. Major U.S. corporations have shifted their manufacturing and procurement departments to Middle East, China, India, and other East Asian counties (Gupta & Wang, 2011). The shift of manufacturing facilities is enabled through effective control system offered by the elements of supply chain management.

The businesses also take advantage of supply chain offerings by establishing their presence in strategic locations throughout the world. The establishment of warehouses at strategic locations provides an advantage to efficiently deliver products (Li, 2012). The increased requirements for customer service and timely delivers are managed appropriately through global infrastructure assisting logistical operations. It is a significant improvement in increasing global reach of suppliers, manufacturers, distributors, and retailers alike.

The businesses in FMGC sector keep an effective track of their deliveries by placing a RFID tag in for pallets or whole shipments. The information received through RFIDs is effectively used to maintain stock levels as well as track physical locations of the products. The placement of RFIDs with individual products is increases traceability of the products requiring recall or short life cycles. These issues however require a detailed analysis and investigation of customer preferences (Hugos, 2011).

Forecasting is also supported by latest supply chain solutions. The effective use of data and information available to track product movement trends allows the business to plan their production, delivery and replenishments of inventory. The organizations also utilize supply chain operations to respond effectively to customer requirements (Hugos, 2011). FMCG business is critical in terms of its delivery and post delivery services for retailer, supermarkets, and customers. It is essential to provide some leverage to customers of perishable products in terms of product's shelf life.

Business development:

The opportunities in business application of supply chain management are used to develop products, services, and ultimately business to support strategic objective of corporations to attain significant growth in terms of market share and revenues. The supply chain solutions are implemented with an objective to correct current business mechanism as well as take the company's business to the next level. The execution of supply chain implementation and operation is termed as a key to success (Iyer&Zelikovsky, 2011).

The business opportunities are significantly created by fulfilling the prerequisite of supply chain applicability according to the spirit of collaboration and integration of business functions. The integrated approach for business processes is also essential in gaining advantage of the business development activities. The integrated performance of supply chain is well denoted as an example of musical group playing their part to present a unified performance as a whole (Iyer & Zelikovsky, 2011).

The corporations around the globe recognize the importance of business development in currently volatile business environment. These efforts are leveraged with applications of modern technology and solution to create an immediate, medium, and long-term effect on business development (Iyer & Zelikovsky, 2011). The business executives require establishing grip on current as well as future aspects of their business within their target market relevant to their industry segments.

The forecasting features of supply chain solutions enable businesses to plan their current state as well as identify gap between their desired goals (Iyer & Zelikovsky, 2011). These activities are supported through analysis and interpretation of data available in a standardized supply chain solution. Sophisticated computer aided applications and ERP solutions integrate business processes data to provide useful information for business development decision makings.

Business performance:

The business performance is one of the advantage supply chain management leverages as a return for investment of resources, finances, and infrastructure to incorporate supply chain management solutions. The major activities in terms of business performance, focused by supply chain management initiatives are cost reduction, increased revenues, inventory management, and last but not the least reduction of capital requirements.

Cost reduction:

The application of supply chain management allows establishing a global presence enabling the organization to apply effective control measures. The cost of manufacturing, delivery, warehousing, and human resources is significantly reduced by applying principles of supply chain management. The magnitude and impact of cost reduction is directly proportionate to the efforts of application and applicability of the solutions (Wisner, 2011).

Revenue Increase:

The coordinated approach of business processes provides significant results in terms of sales increase and providing additional opportunities to attain growth. The business collaborates with each other within the supply chain to achieve better understanding of the system. The collaborative approach compliments business efforts to target increased geographical as well as demographic target market. Revenues are also generated through focusing on improvements in existing products and services (Wisner, 2011).

Inventory management:

The supply chain also provides an optimized approach for maintaining inventory of raw materials and finished goods. The optimum level of inventory management is an advanced planning and control features that allow a business to maintain only required capital investment. The reduction in capital required to maintain high levels of inventory enables the entity to divert the capital in additional activities as well as lowering the investment expenses (Wisner, 2011).

Overall Business Performance:

The business performance of an organization is increased due to the complimenting effects of individual supply chain activities. The activities mentioned above provide a significant base for increasing business efficacy. Numerous individual activities are also supported by the activities of supply chain including customer's service, complaints handling, shorter lead time to market products and services, and finally the performance of human resources. Reduced labor is required to support automated business process through implementation of supply chain solutions (Wisner, 2011).

Competitive advantage:

The competitive advantage can be described as a unique leverage created by the organization within the industry or target market through implementation of sophisticated techniques and practices (Reuter, Foerstl, Hartmann, & Blome, 2010). These practices are tailored to provide assistance to business processes after aligning with the strategic objective of the corporation. A number of businesses have created significant competitive advantages through effective implementation of supply chain solutions.

The notable examples of such corporations can be Whirlpool Corporation, Wal-Mart, and Toyota. The effectiveness of supply chain solutions is created through careful analysis of current business operations and analyzing the gap between desired business objectives. The corporations than establish options for improvements. These options are also prioritized to keep track of the significant requirements. Using Ansof matrix is also a widely accepted approach for identification of strategic requirements.

The competitive advantage gained by above mentioned examples of large corporations is through effective management of supply chains. Whirlpool Corporation gained leverage through its customer centric supply chain management turnaround program. Wall-Mart has created a competitive advantage through efficiently using RFIDs to increase its supply chain performance and later implementing Vendor managed inventory (VMI) program. Furthermore Toyota… [END OF PREVIEW]

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