The Challenges of Supply Chain Profitability
Graduate School of Management
Procurement and Contract Management
II.Value Chain Analysis
III.Value Chain Reference Model
A.Effects upon organization
B.Impact upon management
This paper describes the challenges of supply chains management. It examines the various areas that contribute to and organization's strategic planning operations to enhance its profitability. It identifies the various elements of value to supply chain operations. More importantly, it provides innovative ideas of forming networks with other organizations and suppliers to mobilize capabilities and resources to run smooth supply chain operations that will satisfy customers in the end. The paper also streamlines the common methods in organizations to evaluate their products and services to determine other approaches to add value to the entire network. Additionally, it stresses the significance of utilizing value chain methods to create value and optimize shareholder wealth.
In today’s business markets many companies are making great efforts towards moving away from the traditional operating environments to more strategic operations across familiar boundaries. The concern stems from rapid changes and developments in the marketplace, and companies are mobilizing their efforts to sharpen their competitive advantage.
Traditionally, organizations focused their attention on the overall product. But today, focus involves improving customer relations and satisfying the customers, which includes ensuring the right quality product, at the right time and for the right price. For that reason, companies must strategically evaluate their internal processes and mobilize their external operations for an effective and efficient overall supply chain.
Enterprises are becoming more integrated by automating their business processes, which allows them to focus on the core business aspects, and processes rather than the day-to-day management. Integration allows supply chain enterprises to partner up with other companies or suppliers to run the supply chain. And this enables enterprises to suitably compete in today’s marketplace. Thus, those enterprises that choose not to integrate with suppliers to collaborate information across the board will loose out against their competitors in the end.
It is commonly known that customers wish to buy quality products and services at great prices. Equally, customers require value of the products and services they decide to purchase. Similarly, when organizations focus more attention on “value” as deemed in the eyes of the customers this is what drives competition in the marketplace. When customer requirements of value are not considered companies end up missing the whole picture or concept of competition. Conversely, an organization that consults with its customers to differentiate what they really want in terms of value, performance, accessibility, experience, and costs become more familiar with their clientele. Thus, these approaches tend to sustain customer satisfaction, growth and profitability. Supply Chain Risks
In order to prosper in today’s marketplace, it is necessary for enterprises to develop ways to structure effective networks and integrate them and other approaches that add value to the products with a network of suppliers and customers. This approach forms a critical element of competition that enhances accuracy and the speed of responding to the end customer.
There are inherent risks involved in supply chain operations. But with the proper knowledge, planning, technology and partnering relationships with other suppliers, managers are capable of reducing supply chain risk. For instance, if managers use flexibility they can coordinate...