A Case Study Approach for Understanding Supply Chain Orientation in Indian Pharmaceutical Firms
TOPIC AREA: OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Authors: Dr. J Shanmugan, Dr. Sajal Kabiraj
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A Case Study Approach for Understanding Supply Chain Orientation in Indian Pharmaceutical Firms
Supply Chain Orientation is defined as the recognition by a company of the systematic, strategic, implications of the activities and processes involved in managing the various flows in a supply chain. Thus, a company possesses a supply chain orientation if its management (in its entirety, not just one or two individuals) can see the implications of managing the upstream and downstream flows of products, services, finances, and information across their suppliers and customers. It is prerequisite to have supply chain orientation across the companies directly connected in the chain for successful implementation of supply chain management
Houlihan (1988) noted that transfer pricing, divisional or geographical autonomy, local systems and standards, and incompatible operating systems create problems in managing supply chains in international context. This article does not include the effect of these issues on Supply Chain Effectiveness separately, as the focus of the article was to develop a comprehensive measure to evaluate the supply chain orientation and delineate the factors underlying such a measure, these factors were however, considered while developing the process oriented measure. Thus the article highlights all the important issues in evaluating Supply Chain Orientation including the management of goods across the boarder.
Supply chain orientation in very simple terms occurs when the focal firm starts to consider its supplier’s supplier and its customer’s customer simultaneously. As companies focus on becoming more efficient and flexible in their production methods to handle uncertainty in the business environment, companies need a supply chain orientation. Supply Chain Orientation consists of
1. Market Orientation
a. Customer Orientation
b. Competitor Orientation
c. Inter-Functional Coordination
2. Management of Inter Firm Relationship
3. Personal Selling Orientation
4. Research and Development Orientation
5. Production Orientation
6. Purchasing Orientation
Market orientation is an implementation of the marketing concept and it requires firms to generate, disseminate, and respond to market information. The firm’s organizational learning, a major component of a market organization, goes beyond the boundaries of the firms because there exist a multitude of learning resources and skills to fulfill customers’ demands in an efficient and effective way. Thus a market orientation not only promotes the emergence of relationship marketing but also provides the reason for it to exist.
Narver and Slater (1990) defined market orientation as an organizational culture in which all employees are committed to the continuous creation of superior value for customers through three behavioral components:
• Customer Orientation
• Competitor Orientation
• Inter-Functional Coordination
Market Orientation: Market orientation encourages inter-functional coordination within a firm. Inter-functional coordination is a firm’s coordinated efforts, involving more than the marketing department, to create superior value for the buyers (Narver and Slater, 1990). Customer satisfaction, which is the ultimate goal of a market orientation and the measure of the created customer value by a firm, is affected by many factors that lie both inside and outside the scope of marketing department...
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