Literature Review Chapter: Supply Chain Management Systems

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Supply chain management systems have become a common solution that firms are using to address a host of challenges. In order to determine the impact of different strategies there will be a focus on their long-term effects, potential weaknesses and how they can be addressed. These elements will provide specific insights that will help in analyzing the best approaches firms can use to enhance their procurement and logistics procedures.

Over the last several years, a variety of firms have been focusing on improving Supply chain management. This is because these practices are shown to be an effective way for them to increase productivity and reduce costs. According to Singh (2011), this is becoming a vital area that is helping companies to address the needs of customers and improve their flexibility inside the global marketplace. The combination of these factors is giving them more adaptability in dealing with a host of challenges. (Singh, 2011)

To fully understand how this is taking place requires identifying the trends. This will be accomplished by conducting a literature review and providing recommendations about the best practices. Together, these elements will show what patterns are the most common and those that are just emerging inside the sector. This is the point that the impact of supply chain management practices on firms will be clear.

Findings

Supply Chain Management and its Uses

Supply chain management practices have become very common inside a number of different firms over the last ten years. This is because changes in customer demand and the ability to quickly respond to these needs has led to a shift in everyone's mind set. The results are that those organizations which are unable to embrace these transformations will be at a competitive disadvantage. (Singh, 2011)

For example, in 2000, Erickson briefly lost 3% of its market share to Nokia. The reason why is because their chip supplier in New Mexico had a fire at their plant. This caused inevitable delays. Over the next three quarters, the firm had to struggle to make up for the challenges. This is because globalization and the outsourcing of production can impact a firm's ability to deliver various products / services to customers. These factors are showing how all firms have to incorporate supply chain management as a part of their solutions. This means that more of an emphasis must be placed on enhancing these procedures and their ability to address a host of challenges. (Singh, 2011)

Management

The management of a supply chain is one of the critical factors that are having an impact on the ability of firms to compete in the global marketplace. According to Singh, this is becoming a common technique which is designed to provide improved customer service. As a result, this considered to be one of the most effective approaches in helping to enhance efficiency and reduce costs. This improves the customer's experience and helps firms to more effectively respond to changes inside the marketplace. (Singh, 2011)

However, maintaining this level of focus can be challenging. The reason why is because consumers tastes and technology are quickly changing. Those organizations that are not prepared to adjust will have trouble competing in the future. When this happens, there is a possibility that they could have a major disadvantage. To overcome these issues requires that firms have an active supply chain management strategy. This means developing one that is quickly evolving with the transformations in the marketplace. Those organizations that are able to achieve these objectives have a distinct advantage over others. This will help them to manage and address any kind adjustments early. (Singh, 2011)

There have been a number of studies conducted which are taking a general focus. This is because they will identify various trends. Yet, they will not address how these changes could make many ideas obsolete. In this information, Singh uncovered the most common issues impacting the management of the supply chain. However, many of his findings mirror the general themes that were discussed in previous research. (Singh, 2011)

Our study will use these ideas as a basic foundation for working off of select beliefs. Then, we will be studying current and new strategies. This is the point that the information will augmented with the previous findings. Once this happens, is when the objective and accuracy of the research will increase. (Singh, 2011)

Applications

To address the needs of firms, venders and independent contractors have created a number of applications / approaches which can be utilized. For example, Uthayakumar (2011) found that the two stage supply chain is an effective tool in helping to reduce costs. This is because it is focusing on having the vendor and buyer working together. Their objectives are to decrease expenses and increase productivity. This has been shown to be an effective strategy by concentrating on reducing costs and enhancing the ability of different organizations to work together. (Uthayakumar, 2011)

Evidence of this can be seen with Uthayakumar saying, "The benefits of order cost reduction and credit period incentives are studied and analyzed. The numerical examples elucidate these benefits. In all these examples, the joint total cost with coordination is less than that of the system without coordination. This model may be extended to multiitems." This is illustrating how the two stage supply chain approach is more effective in addressing a host of challenges. The primary benefits that it offers are improved productivity and reduced costs. These factors are pushing buyers and vendors to work together utilizing these ideas. (Uthayakumar, 2011)

This information is expanding upon other topics that are discussed by integrating management techniques with specific applications. For the research, this is providing specific directions towards investigating the problem and any possible challenges that may be uncovered. At the same time, this will address potential gaps in the research by looking at many different sources.

Another idea that is utilized by firms is parameter optimization. According to Kumar (2007), there are several different factors that are interacting with each other to create the final product for any organizations including: inputs, random variation, decision variations and outputs. The combination of these elements are working together to have an impact on the productivity and output of the firm. (Kumar, 2007)

Evidence of this can be seen with Kumar saying, "The supply chain simulation using Arena and other software tools such as Excel, Visio, VBA, OptQuest, and Crystal Reports provides a virtual laboratory to analyze various scenarios for optimal design. The structure of the games and the customizability of the parameters allow many different business and operational issues related to a supply chain can be analyzed under controlled conditions. The simulation model not only provides a framework for learning but the concept of templates introduced in this paper also can be used in any business operation to design their supply chain(s) in order to achieve synchronized material flows." This is illustrating how the basic approach that is being advocated by Kumar can help a firm to increase productivity and reduce costs. As a result, any business can utilize these ideas as a basic foundation in understanding the problem. (Kumar, 2007)

In this study, a mixed approach was used. This is when there is focus on conducting qualitative and quantitative research to understand the underlying trends. These methods helped to illustrate how this strategy improved productivity. There are gaps in the research, as this approach has only been tested on a select amount of organizations and many of these ideas are continually evolving. This helps our research by providing a basic foundation for understanding key strategies and trends. We can use this information to support the general patterns and in helping to formulate a hypothesis that will be tested. (Kumar, 2007)

Alliances

One possible strategy that will help to streamline the application of different theories is to form strategic alliances. According to Reza (2009), Vendor Management Inventory (VMI) approach is an effective tool that is having a positive effect in achieving these objectives. This is because it is having vendors and buyers work together in addressing a host of challenges. The ideal conditions for using these tools are when the firm is facing shortages. The reason why is from both suppliers and producers having the same objectives. This means that they can streamline their operations and focus on reducing costs. It is at this point they will be more effective in reaching out to different stakeholders.

Evidence of this can be seen with Reza saying, "This model is developed for a two-level supply chain consisting of a single supplier and a single retailer and examines the inventory management practices before and after implementation of VMI. The results of analytical examination show that VMI implementation in economic order quantity model when shortage is backlogged sometimes has the ability to reduce total costs of supply chains." These views are showing how the two tier system is addressing supply chain management issues. This resulted in other ideas being developed to show how alliances are an important part of this process. In the… [END OF PREVIEW]

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