Supply Chain Management

Introduction

Supply management is basically the stream of various commodities and services (Covin & Miller, 2014). The supply management is a design that involves the formulation, actual execution, the control and finally the monitoring of the activities carried out with a motive of creating profits, inventing a competitive structure, time leverage, equalizing the supply and demand structure and generally measuring the rate of performance in the global market.

Job title

Job titles within the supply chain management structure can vary depending on the level of business. Such job titles can include the supply chain manager, the master scheduler, buyer planner, planner, material manager, procurement manager, logistic manager and the purchasing manager.

Supply manager is a job position which basically deals with the general staffing of the organization. The supply manager has the obligation of reviewing and updating the supply chain practices with relation to the current trends including the laws and regulations. Supply manager has the duties of intelligently selecting the transportation route in order to maximize the delivery and therefore being economic in terms of job performance since most of the warehouses and shipments will be done at the same time and in line with the company (Oshri et al., 2015). The development of material costs which needs to be standard is also a job description done by the supply manager. The supply manager helps in maximizing the profits and reducing the cost incurred in various dealings for an organization.

Procurement Manager

This is also a vital position in the supply chain management structure. Procurement manager has the duty of devising and fully using a fruitful sourcing and procurement strategy for an organization (Waller & Fawcett, 2013). The procurement manager has the duty of the discovery of profitable suppliers and initiating proper business deals and also negotiating with other external vendors with an aim of securing advantageous deals.  

Purchasing Manager

Purchasing manager has the duty of developing, controlling and the execution of purchasing strategies. Purchasing manager has an obligation of tracking and reporting the essential functions of the organization in order to reduce the expenses and in this way increase on the effectiveness of the organization.

Strategic partnership

In order to maximize the profits of the company, the business has to have some partnerships with major companies or companies which can allow working together for success. The manufacturing company can partner with another manufacturing company for the development of one single business which can help in the selling and distribution of the final products. The best type of partnership to engage in at the moment is the joint venture where the partnership will help in the development of a new business entity separate from either of the two businesses. Having a pool of contribution is a better way of being competitive in the market (Covin & Miller, 2014). The benefits for this kind of move is that there will be the shared cost advantage on both parties since the contribution will be based on an agreement. Another benefit is the increased capacity in terms of market share which is hugely influenced by the occurrence of a new business with an aim of making maximum profits. The sharing of the risk with the partner is also a benefit for the organization. The military equipment, in general, require stability and influence for a successful survival.  

Roles of supply chain management

The supply chain management is an important part of every business which has the vision of creating value and having a great reputation in terms of the services it offers for success. The supply chain management acts as a booster of customer services. Every customer for the equipment expects the correct and best assortment for every order made and must be of great quality. The delivery and also the availability of the products requested are to be assured to the customers. The delivery time must be according to the agreement and this will help increase the earning capability of the organization. In many cases, the supply chain management part of an organization is the head in terms of reducing the operational costs of the organization (Oshri et al., 2015). The cost of purchasing the products is reduced significantly, therefore, there will be a reduction in spending. Improving the financial position of the organization is also the role of the supply management. The organization basically depends on the profits to survive. Increased profits will be assured since the control of spending will reduce the costs and thereby increase the profits. There will be a cash flow increase since there is the speeding up of the production process and also the time for delivery is set to minimum. Decreasing the fixed assets such as the transportation costs, warehousing, and plant operations can increase the revenue for the organization.

Total cost of ownership

The cost of acquisition can include the costs property or the equipment before the taxes are included. After the commissions, incentives obtained from purchasing, closing costs and the discounts can be the cost of acquisition. The upgrades which are necessary during installation or usage of the assets can also be the costs of acquisition. This is a positive value since the reduced expenses can be used in other areas of the business (Waller & Fawcett, 2013). Costs of operation can include the subscriptions and services required to keep the business on the right track. Such costs can include the cost of utility, direct operator labor, and the cost of initial costs. Cost if the operation is a positive value since any reduction geared towards this strategy can increase the earning capability of the organization. The training cost can be avoided by giving the experienced members an opportunity to work with the new members (Oshri et al., 2015). Personnel costs can include the administrative staffing, facility where the equipment is kept, the support personnel using the equipment, and the general operators. This can include the ongoing operations of training and the troubleshooting labor for developed maintenance purposes.

 Personnel costs in many cases can be termed as a negative value since any reduction in the number of people in a certain area will be an increase in workload for other individuals. Documentation costs can also be useful in the analysis of the total cost of ownership. If the total costs are reduced on this part, then there are valuable chances that the organization rate of earning can be maximized accordingly. Documentation costs is a positive value since the rate at which the documentation process takes place in the organization can be done by the machines, only simpler for this scenario. Manufacturing equipment can also be of advantage to the business but if not properly used then the cost can be very high (Waller & Fawcett, 2013). These items are mostly of high value and when one reduces such costs it is a positive value but in the event that the cost has been reduced without proper strategy then this is a negative value towards the business.

Characteristics of a supply chain leader

Certain characteristics are essential to allow for the continuation of a successful business relationship. As a senior specialist in supply chain management, the qualities one should possess are to be in line with the business specification. These qualities include the ability to solve certain situations which affect other negotiators in terms of being constructive to implement great projects. The current consumer prices for every commodity have doubled and this allows for the main participators to predict the future based on the daily trends (Brandenburg et al., 2014). The ability to deal with ambiguity is required and therefore the need for such a quality. Applying the soft and hard skills in determining the risk and the rewards for the organization through an analysis of the best strategies is a good quality of a supply chain management. The analysis in many cases can be used during calculations which need a high speed to be competitive. Thinking imaginatively is also a strategy for making successful deals in every situation (Covin & Miller, 2014). Maintaining and also improving the relationships between the supply chain members is a favorable quality which can help in negotiations. Mutual benefits connectivity among the supply chain members needs a deep understanding of the organization as well as a good understanding of the relationship among all members. This relationship is important for the business as it brings the best out members into the organization.

Method of choosing a supplier

One of the best methods of choosing a supplier is through attending events such as the regular exhibitions to view quality products and services. This can be done through developing a good relationship with either a partner or through the supplier. Quality products are the key issue in this scenario and therefore the products the supplier deals with must be of high quality and likable for the customers. Depending on the quantity of the materials required, the development needs to be precise and on point (Brandenburg et al., 2014). During the selection, it is important to include every key stakeholder in the procedure in order to agree on the best important criteria for the best kind of a supplier. Every supplier has to have a good reputation in terms of the service delivery and timely delivery. The prices for the products should be stable and at a favorable specific place. Cheap products in many cases present other challenges such as poor quality products, therefore, buying expensively but the quality is essential in every sense. Attending the exhibitions is very important for a business or an organization (Brandenburg et al., 2014). This is part of marketing that allows the exchange of ideas, resource improvement and also the development of strategic planning for the business setting. Businesses or suppliers who have presented their products and services in an exhibition have the reputation of doing a clean and open business therefore important to use such a method to determine the best supplier.

Considerations on imports

Before an organization decides to get suppliers from abroad, there are certain considerations to consider before making such a decision. The organization should dedicate more time in the evaluation of the local market suppliers. Investing both effort and the time is important to help result into a functional project internally. This is important for the creation of long-term beneficial business strength. It is also important to prices of the commodities are worth the import duty to the organization. The volumes of products, the discounts from the products, and what criteria one is using in determining the prices is important before one decides to import (Brandenburg et al., 2014). The state of the commodities to be imported is also an important consideration as certain commodities are not valuable when they arrive in other parts of the world. The potentiality of the products to survive in a member state must e considered to reduce the effects of defects in the commodities. Each of these considerations differs since the rate of imports is high in some countries compared to using the locally available materials.

Fixed-price types of contracts

Types of fixed price contracts differ accordingly. One of the types is the fixed price contract which needs the contractor to be able to manage the costs of the workforce in order to improve the profit making. If there is an event whereby the workforce is more than it had been planned for, then, in this case, the contractor may lose some money for the contract (Waller & Fawcett, 2013). For the case of the supplier, the above scenario can make him or she loses money in the event the supply is less than the requested amounts but for the purchaser, it is a benefit since the terms of the contract have been broken. Fixed price contracts which have economic price changes are the types of contracts which have reasons for the change in prices. In such a case the supplier can be favored by such since he or she may use certain supply challenges to break the fixed costs. The purchaser, on the other hand, can be dependable since the fixed price might affect the business terms. Fixed-price type of a contract which has incentives firm objectives can vary depending on the occurrence of the planned costs either above or below (Waller & Fawcett, 2013). The implications on the supplier are a standard since the contract does not limit products quantity. On the part of the purchaser, it is difficult to configure how well or certain a supply can be therefore open speculations.

Conclusion

Supply chain management is one important part of a business. It is basically the backbone of the business. Reducing the costs, working with the favorite prices in the market, maximizing the profits or the organization is beneficial and this helps in keeping the organization very competitive in the market. Organizations should consider having the best supply chain strategies for the survival of the organization in general.

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), 299-312.

Covin, J. G., & Miller, D. (2014). International entrepreneurial orientation: Conceptual considerations, research themes, measurement issues, and future research directions. Entrepreneurship Theory and Practice, 38(1), 11-44.

de Araújo, M. C. B., Alencar, L. H., & de Miranda Mota, C. M. (2017). Project procurement management: A structured literature review. International Journal of Project Management, 35(3), 353-377.

Lu, L. X., & Swaminathan, J. M. (2015). Supply chain management.

Nojavan, S., Mehdinejad, M., Zare, K., & Mohammadi-Ivatloo, B. (2015). Energy procurement management for electricity retailer using new hybrid approach based on combined BICA–BPSO. International Journal of Electrical Power & Energy Systems, 73, 411-419.

Oshri, I., Kotlarsky, J., & Gerbasi, A. (2015). Strategic innovation through outsourcing: the role of relational and contractual governance. The Journal of Strategic Information Systems, 24(3), 203-216.

Waller, M. A., & Fawcett, S. E. (2013). Data science, predictive analytics, and big data: a revolution that will transform supply chain design and management. Journal of Business Logistics, 34(2), 77-84.