Supply Chain Management Processes Dissertation

Pages: 22 (6606 words)  ·  Bibliography Sources: 17  ·  File: .docx  ·  Level: Master's  ·  Topic: Business: Management

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[. . .] Therefore, packaging and presentation are critical components in the marketing phase of supply chain management. Garcia-Arca & Prado (2008) state that the significance of packaging and presentation in supply chain management has resulted in the emergence of packaging design model. The model promotes the idea of packaging logistics since it is generated from the concepts of packaging and logistics. Through this model, the design and development of packaging in supply chain management is based on four basic components. These components are definition and understanding of design requirements, identification of a suitable organizational structure, use of best practices, and development of a control system (Garcia-Arca & Prado, 2008). The design requirements that shape packaging and presentation in supply chain management include logistics, environmental, and marketing factors. These factors are taken into consideration when determining packaging design since packaging and presentation decisions in supply chain affect logistics and sales performance.

Potential suppliers. Suppliers are critical external stakeholders in supply chain management largely because of the provision of supplies that are used in manufacturing finished products for customers. Suppliers are external stakeholders who provide raw materials, which are then transformed into finished products (Boon-itt, 2010). Developing a list of potential suppliers is a foundational step in supply chain design. Ryu, So & Koo (2009) state that supply chain design and management requires developing relationships with potential suppliers. This is largely because the success of supply chain management processes is linked to the nature of the collaborative relationships between the supplier and buyer. Through an emphasis on the role of partnerships with potential suppliers, Ryu, So & Koo (2009) suggest that the design of the supply chain requires consideration of potential suppliers as critical external stakeholders. The needs and capabilities of potential suppliers should be taken into consideration when making decisions on supply chain design. These capabilities and needs in turn become the premise for developing collaborative relationships with these potential suppliers, which in turn influences/shapes the flow of essential supplies in the company.

B. Outsourcing of Work to Other Companies/Nations

Murugan & Dharmalingam (2016) examine the structure and direction of supply chain management in relation to existing literature. As part of their review of existing literature, these researchers identify outsourcing as an important component in modern supply chain frameworks. Business are increasingly outsourcing work to other companies or nations as part of supply chain design. Decisions to outsource work to other business or nations is attributable to the perceived benefits of outsourcing on the effectiveness of supply chain processes and management. Murugan & Dharmalingam (2016) suggests that outsourcing decisions in supply chain management are influenced by evaluation of cost trade-offs between production costs and market mediation. In this regard, outsourcing can either lessen or exacerbate the link between production costs, market mediation and variety.

Core Competencies

Mclvor (2000) concurs that outsourcing of supply chain management functions has become common in the modern business environment. This researcher has stated that outsourcing has moved beyond peripheral activities like catering and cleaning to critical activities like manufacturing and design. In concurrence, Mohiuddin & Su (2013) contends that outsourcing in modern supply chain management processes incorporates outsourcing core competencies and non-core competencies. Similarly, Premus & Sanders (2015) contend that companies in the modern business environment have gone too far as they outsource core and non-core competencies. Mclvor (2000) contends that some of the core competencies that are currently outsourced to other companies or nations include design and manufacturing. In concurrence, Mohuiddin & Su (2013) state that core competencies that are outsources to other companies or nations are the highest level of knowledge and skills that are shared across functional units. These competencies are outsourced since they add the most value to the organization with regards to integrating and harmonizing strategic business units.

Non-core Competencies

Mclvor (2000) and Premus & Sanders (2015) state that non-core competencies that are outsourced to other companies or nations as part of supply chain management are peripheral activities. These peripheral activities are outsourced to help enhance the company’s focus on its core competencies in order to enhance its efficiency and effectiveness in manufacturing finished products and achieving overall profitability. According to Mclvor (2000), some non-core competencies that are outsourced by business organizations include cleaning and catering services. These activities are not the highest level of knowledge and skills in the organization, but play critical roles in enhancing operations in the company.

Pros/Cons of Both

Premus & Sanders (2015) state that outsourcing core and non-core competencies as part of supply chain management is associated with some advantages and disadvantages. These advantages and disadvantages emerge from the fact that outsourcing has developed to become a major industry trend over the past decade. According to Mohuiddin & Su (2013), the advantage of outsourcing core competencies as part of supply chain management is enhanced organizational performance. Improved performance from outsourcing core competencies is attributable to the fact that it enables the company to transfer work and activities to external providers who are knowledgeable, use innovative technologies, and specialized resources. The use of expertise in these critical business activities in turn enhances the quality or products and/or services generated by the company, which in turn improves overall organizational performance. Heikkila & Cordon (2002) state that outsourcing core competencies helps to lessen operational costs, enhances the speed of production, and promotes organizational flexibility. However, this strategy is linked to some disadvantages including emergence of numerous business risks as the organization does not handle its critical business activities and functions. Secondly, outsourcing core competencies results in exchange of proprietary information, which could in turn result in loss of these core competencies.

Mohuiddin & Su (2013) states that outsourcing non-core competencies enables the company to focus on its critical business activities, which is a major advantage. Through enhancing focus on core competencies, outsourcing non-core competencies in turn enhances organizational performance, reduces costs of operations, and enhances competitive advantage. Similar to outsourcing core competencies, this strategy could result in numerous business risks that could in turn affect an organization’s operations and competitiveness in the market (Heikkila & Cordon, 2002). Such risks could emerge if the outsourcing process results in loss of critical business information relating to core competencies or critical activities.

C. Analysis of Off-Shore Chains

As outsourcing has continued to dominate modern supply chain systems, especially because of rapid technological advancements and globalization, off-shore chains have emerged (Szuster, 2013). Off-shore chains are established as part of supply chain management to help lessen operating costs, enhance the recruitment and retaining of highly-qualified personnel, and promote operations in a less strict environment. Off-shore chains handle different kinds of work for an organization ranging from core competencies to non-core competencies. Some of the critical activities handled by off-shore chains include manufacturing and service delivery while non-core competencies include transportation services. Szuster (2013) states that offshoring in supply chain management is a practice or strategy that increases risks in supply chain processes.

Potential Threats for Customers

Off-shore chains have potential threats for customers as they enhance risks associated with supply chain processes (Szuster, 2013). According to this researcher, off-shore chains could result in manufacture of low-quality products, which is a major threat to customers since they will be unable to access desired products. If the production processes are compromised in the offshore chains, low quality products are manufactured. This in turn compromises the ability of the company to attract and maintain its customers. Schoenherr (2010) contends that offshoring could result in the production of expensive products and/or services. While off-shore chains are established to help reduce operational costs, the company could end up using high pricing strategy to help cover for the costs of off-shore chains. This implies that customers would in turn be required to pay more for their products and services.

Potential Threats for Non-customers and Management

Tate & Ellram (2012) argue that offshoring could generate potential threats to an organization’s management and non-customer/other stakeholders. Based on their evaluation of offshore outsourcing in the service industry, Tate & Ellram (2012) found that offshore outsourcing poses significant threats on formalization, centralization, and complexity. In essence, off-shore chains have been found to negatively impact critical components of organizational formalization, centralization and complexity in relation to production processes. In addition, these researchers contend that offshoring has been found to generate more complex structures in production processes. This in turn generates new demands on non-customers and management in the organization with respect to streamlining operations. Additionally, Tate & Ellram (2012) states that off-shore chains generate difficulties for the management and other organizational stakeholders to remain flexible toward ongoing adaptation and improvement.

Structure of Supply Chain

Vonderembse et al. (2006) state that there are different structures or design of supply chain as different approaches are adopted to establish and maintain relationships among manufacturers, suppliers, distributors and retailers. These researchers postulate that the structure of supply chain is… [END OF PREVIEW] . . . READ MORE

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Supply Chain Management Processes.  (2019, May 31).  Retrieved January 28, 2020, from https://www.essaytown.com/subjects/paper/supply-chain-management-processes/3543044

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