1
Running head: SUPPLY CHAIN MANAGEMENT OUTLINE
BUSI 610
Supply Chain Management Outline
2
SUPPLY CHAIN MANAGEMENT OUTLINE
Literature review
Research conducted indicates that supply chain management (SCM) is a key element while
conducting business all over the world; SCM plays a major role in development and
implementation of globalization demands by establishing efficient supply chains and networks
between suppliers, manufacturers, traders and retailers (Limbore, 2016). There is the need for a
well networked relationship between suppliers, manufactures and retailers to make sure that
goods and services are doing well in the market. In case any step in the supply chain has been
broken it will affect the performance of the business. Supply chain management is the focus of
both multinational and micro-companies in the face of financial crisis and any developmental
changes. Even in the past years when supply chain management did not have a proper definition
companies used to apply the control in their operation and management issues (Wei & Xiang,
2013). A typical supply chain management system has the order of sourcing, intermediaries,
distributors, retailer and finally the consumers (Uber Content, 2015).
The role of SCM in retail business today
With the retail business taking a positive boom in the global markets, SCM has been one of the
major factors that retailers use I improving performance and efficiency in the business. This has
been contributed to by the change in consumer thinking from the skeptical understanding in the
past to a recent understanding where consumers understand price points. Organizations
understand that they have to look for ways to reduce cost of operations and still produce high
quality products (Uber Content, 2015). But according to research traditional tools cannot keep
up with the competitive field of retail business and they have to embrace technology to help
improve SCM and store management system so that they can achieve significant benefits.
3
SUPPLY CHAIN MANAGEMENT OUTLINE
Effects of SCM on customers and financial performance in an organization
The major significant of SCM is to help the business remain on the competitive edge in the
global market and to be able to thrive in the globally challenging environment (Cooper & Ellram,
1993). Comparing the traditional approach to the modern approach of managing financial and
customer systems in an organization, the modern way has improved due to use SCM in their
management. The system is able to help maintain clear records of all transactions in the business
and thus making the business more accountable to their funds and expenditure. The system also
can reduce the cost of transaction and therefore saves the business a lot of expenditure hence
improving their finances. Another positive effect the system has is on the customers who are able
to access information they need about different products and services. This aspect of information
sharing gives an organization the chance to remain sensitive to global market by getting
feedbacks from all involved stakeholders.
Impact of SCM in competitive advantage and organizational performance
According to research conducted there is an indication that competition among businesses has
shifted from organizations to supply chains and it is because of this SCM has become important
in improving organization performance, improving productivity and maintaining a competitive
edge in the global business operations (Li et.al, 2004). This has been possible through the
approach of five dimensions that include: customer relationship practice where the system is able
to support communication and feedbacks form customers that help in improving services to
ensure customer satisfaction. Strategic supplier partnership that makes sure that the organization
has constant supply of raw materials and other resources for business continuity. Improved level
of information sharing that makes it possible for the business to gather information from
4
SUPPLY CHAIN MANAGEMENT OUTLINE
different sources that help them improve their services and stay ahead of their competitors and
improved quality of information sharing that makes it possible for an organization to receive and
send information through a safe, efficient and effective channel that makes transaction easier and
faster (Li et.al, 2004). Since 90’s competition in businesses intensified and markets became
global and this translated to the challenges that were related to getting goods and services to
their rightful locations, at the right time and with minimal cost being involved. Due to these
challenges businesses realized that they needed to improve the whole supply chain so that they
can make it more competitive (Li et.al, 2004).
Impact of technology use in improving SCM
Research indicates that use of technology in SCM has helped increase performance in different
investments such as ensuring market equity capitalization and stock price changes (Dehning &
Richardson, 2005). IT-based supply management system has been helpful in different sectors
such as manufacturing, distribution, production, marketing, management and customer service.
Se of IT-based systems has made the supply chain more efficient, reliable and flexible while at
the same it reduces cost involved in the whole supply chain by making the system automated and
reducing paper work, reducing time and maximizing effectiveness. IT-based SCMs are able to
eliminate the issues of inventory carrying cost, long order waiting time, decreased profits and
weak customer goodwill (Guo & Tang, 2008).
5
SUPPLY CHAIN MANAGEMENT OUTLINE
References
Dehning, B & Richardson, v, J (2005), The Financial Performance Effects of IT-Based Supply
Chain
Guo, R & Tang, Q (2008), An Optimized Supply Chain Planning Model for Manufacture
Company Based on JIT, retrieved from International Journal of Business and Management Vol.
3, No. 11.
https:// www.researchgate.net/profile/Nilesh_Limbore .
Li, S et.al (2004), the impact of supply chain management practices on competitive advantage
and organizational performance, retrieved from http://www.elsevier.com/locate/omega.
Management Systems in Manufacturing Firms, retrieved from
http://www.misrc.umn.edu/workshops/2005/spring/vernon.pdf.
UBER CONTENT (2015), The Role of SCM in the Retail of Today, retrieved
from http://www.freepressjournal.in/the-role-of-scm-in-the-retail-of-today/
626341.
Wei, Z & Xiang (2013), The Importance of Supply Chain Management, retrieved from
http://www.ijbssnet.com/journals/Vol_4_No_16_December_2013/28.pdf.
