In a 1000 words, explain what a supply chain is and discuss the importance of a company having a supply chain strategy. Identify at least four key drivers of any supply chain strategy and discuss why each is an important ingredient to a supply chain strategy. Cite an example of a company that has used its supply chain as a competitive advantage and explain how.
Supply chain management (SCM) refers to a network of activities, organizations, capital, and technology involved in the procurement of the mat, as well as their supply from manufacturers to the customer. The supply chain activities integrate the conversion of raw material into finished goods. In other words, it refers to the logistics and distribution of goods and services from the supplier to the end user. The intricacy of activities depends upon the nature of the product. Every industry has a different set of inventory and distribution requirements (Zigiaris, 2000). Therefore, to provide a better procurement of inventory and distribution of goods and services, a management system is created named as 'Supply Chain Management' (SCM). This management system engrosses a better executive plan for the materials and supply management. The Supply Chain Management provides enhanced coordination and integration of the raw material and finished goods between the manufacturer, wholesalers and retailers (Wisner, 2011).
Importance of Supply Chain Management:
The SCM system is an indispensable term for any business organization. Every business organization, which deals either in the product or service, feels the importance of the supply chain management system. This system contributes in achieving effectual market coverage. The availability of products and services at a required destination is possible only through an effective supply chain network. A superior collaboration with vendors and distributors are possible with this mechanism (Wisner, 2011).
The inventory, which directly contributes to the cost estimations is better managed and controlled by the Supply Chain Management. The company, which adopts this management system, tends to have a lower cost in balance sheets. In addition, effective SCM facilitates the firm to build a ...
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