For example, if an organization has a contract with a supplier for buying a maximum possible amount of a product, but the business scenario changes and that organisation needs more amount than the earlier agreed fixed amount for a certain period of time. It has to negotiate with the supplier again to buy at a relatively higher amount, but it depends on supplier to deliver more than what is agreed previously. Now, if the organisation is producing that product itself, then just production needs to be increased. Now it has the control to increase or reduce production at will, that’s why supply chain is much more coordinated. In addition to this another benefit of vertical integration, is that your organization will be able to invest in highly specialized assets.
Since supply chain consists of very many stakeholders who may not necessarily be living in the same geographical area, a tool for collaboration and co-operation breaks the barrier of communication over distance. Ward and Zhou (2006) reveal that Information Technology electronically
Outsourcing can truly be labeled as a key feature of today’s global economy (Gunasekaran and Kobu 2007). A supply chain is a dynamic, stochastic, and complex system that might involve hundreds of participants. It can be defined as a network of suppliers, manufacturers, distributors and retailers, who are collectively concerned with the conversion of raw materials into goods that can be delivered to the customer. Companies associated in the same network require efficient supply chain integration in order to optimize their collective performance (Khaji & Shafaei, 2010). Supply chains, as complex networks, are usually studied from different structural perspectives, such as dyadic, serial, divergent, convergent and network (Huang et al., 2003).
Extensive academic-focused studies have revealed that supply management is an integral function of any organization, regardless of the business orientation such an organization adopts. The supply management paradigm has evolved over the years from purchase focused constructs to an encompassing of other interrelated constructs including the definitive supply to end consumers. Research of this subject matter has observed the many perspectives of supply chain management and elaborates that key perspectives are focused on operations and information management (Kopczak and Johnson, 2003). In an analysis of the dynamic significance of supply chain and supply chain management, Burt et al (2003) stress that the future focus of this domain would be
The revenues of the business rely on the supply chain that delivers the products, and incase a key component of the process does not function as per the expectations; it becomes very difficult on the part of the business (Trunick, 2010). Most executives are faced with the difficult situation where they have to cut costs and at the same time meet the customer demands. This is a justification why it is important to have a risk analysis of the supply chain in order to avoid situations where the business operations are affected by events that are related to business or environmental
[…] (Organizational Process Integration, Expert2) From a technical perspective it is hard to see foresee the revenues that will be generated because this is a highly integrated process and have a lot to do with marketing and sales. If you don’t market your website, you are not going to make any revenues. […] Integration of the organizational processes is very important but it is even more important that there is level of isolation, if marketing n sales other departments starts to be part of the development processes then the performance of our department is severely affected. (Business IT Implementation process, expert
However, many company feel that the process of apply Supply Chain Segmentation is a very difficult and complex strategy for the complex global marketplace. Although this is a complex strategy, Supply Chain Segmentation is become more important for now competitive marketplace. The single-supply chain companies is more and more harder and difficult for them to meet the requirement of their target market because the rise of globalization and outsourcing. In this complicated market, the relation and interdependent among company and supplier is very high related to adapting supply chain processes which to meet the need of the customer for
This in turn has made supply chain management an integral part of businesses. When a company’s operations are under its control, it has access to information and hence managing risk becomes easier. But with the global nature of production processes, it is not just the company but several other actors that get involved i.e. Subcontractors, daily wage workers working under sub-contractors etc. Due to the complexity of the process, information
INTRODUCTION Supply chain management (SCM) has evolved as a prime element in shaping the effectiveness of the organisations. In the current competitive market, enterprises have eventually noted that the individual entrepreneurial capabilities are not the only driving factor for competitive advantage instead the capability of a compact supply chain plays a vital role (Prajogo and Sohal, 2013). Supply chain management can be defined as the stream of goods, materials and information within and between the entity, co-related by a range of tangible and intangible stimulators, involving activities, partnership, processes and incorporated information systems (Peck, 2004). SCM has been exposed to dramatic rapid changes over last few years which are
In this scenario, the Supply Chain Management theory has been established to deal with new challenges. One of the main purposes of Supply Chain Management is to integrate the businesses processes through the value chain within and across company’s boarders. However, due to high costs of building up and maintaining strategic partnerships with the suppliers, company tries to allocate their resources in a best possible way through their supply chain. The motive behind building up the close relationships with a small number of key suppliers, which hold high technological and add-value know –how and resources to maintain strong relationships with the others. Indeed, the topic of buyer-supplier relationship is relatively new in business economics.