SUPPLY CHAIN MANAGEMENT
FLEXIBILITY IN SUPPLY CHAIN MANAGEMENT
ROLL NO. 142
MBA (IB) - 2009-11
Flexibility in supply chain management
Objective of this paper:
To show the flexibility in Supply chain management.
Flexibility is considered to be an important differentiator in the current market place as well as in the supply chain management. The need for flexibility in SCM and also the little attention is paid to how operational activities incorporate flexibility in their supply chain practices. In this term paper, emphasis is put on the buyer-supplier relationship, marketing activities and manufacturing in order to achieve flexibility in supply chain management. These aspects are illustrated with three case studies in which supply chain structures have been evaluated in two different kinds of markets. In the end, the role of flexibility is evaluated and how this can lead to a competitive advantage. This is a Term paper about flexibility in supply chains considering the current practices in supply chain management. INTRODUCTION
The role of supply chain management has become increasingly important for firms in highly competitive or mature markets, and we have recently seen, also in economic downturns. A well-coordinated supply chain process is difficult to imitate for competitors since it becomes more difficult to compete on product level. Globalization and liberalization in the market place are important drivers for the growing competition together with the changing demand of the consumer. A shift arose from a more technology-oriented view towards a point in time where collaboration and trust become important along the partners in the supply chain. Effective management of relationships in supply chain management is a necessity in order to withstand competitive pressures and economic downturns. Therefore supply chain management is not anymore a support function in order to implement a business strategy; it is specifically meant to drive a firms’ performance and supply chain management becomes a key element of the overall strategy for the entire chain. In order to deal with this, flexibility in the supply chain becomes more and more important. In this paper I want to explore the term ‘flexibility in supply chains’ in order to understand the phenomenon better and be able to define specific research and managerial implications in the field.
SUPPLY CHAIN MANAGEMENT
supply chain management is a series of units that transform raw materials into finished products and deliver the product to the customers. This is a typical ‘push’ approach, pushing the raw materials into the next processes of the chain, towards the end market. A more holistic approach describes supply chain management as managing business activities and relationships within an organization, with immediate suppliers, with first and second tier suppliers and customers along the supply chain. However, the descriptions of supply chain management remain vague since it is not clear what is meant by ‘business activities’. Cohen & Lee succeeded in defining a clear description of supply chain management. They clarify that supply chain management consists of both intra- and inter related business activities of a company. The intra-related part refers to the raw material or component procurement by independent suppliers, through manufacturing and distribution and concluding with successful delivery of the product to the retailer or a customer. It becomes clear how supply chain management evolved from traditional purchasing and logistics function into a broader strategic approach to materials and distribution management known as supply chain management. Evolution of SCM
In the past (1950s and 1960s), traditional supply chain was merely technology driven: great emphasis was put on minimizing unit production costs with little product or process flexibility. Instead o integration, collaboration within the...
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