Competition as Well as Technological

¶ … competition as well as technological knowhow has forced several firms to resort to supply chain management as an integral elements of their strategic competence with the belief that it can create an acceptable level of competitive advantage in their daily operations (Sheth & Sharma, 1997).On a similar note, several firms have concentrated their efforts towards the exploration of various ways of effectively leveraging their entire supply chain (Kannan & Tan, 2006).The process of leveraging the supply chain enables a firm to adequately exploit its key competencies, technologies, expertise as well as efficiencies. Mentzer (2004) presented twelve ways of gaining competitive advantage within the context of supply chain management. In this paper we explore the first two strategies of gaining competitive advantage.

Strategy #1: Coordinate the Traditional Business Functions Across the Supply Chain.

The concept of Supply chain management (SCM) involves the coordination of a large set of interrelated activities as well as flows that cuts across organizational and functional boundaries (Bagchi et al., 2005; van Hoek and Mitchell, 2006). Supply chain management (SCM) is important in the creation of customer as well as shareholder value via the efficient integration of the core business processes (Srivastava, Shervani and Fahey, 1999).The creation of value via a superior Supply chain management (SCM) is largely dependent on the ability of a company to align its major internal as well as external business processes in a more effective manner as compared to its main competitors in order to reduce the unwarranted and inefficient use of the firm's resources (Lambert and Burduroglu, 2000).

Several firms are noted to be missing out on the opportunity of leveraging their internal alignment for the sake of competitive advantage as a result of the rather ineffective management of the existing internal processes as well as the general failure to appreciate the operational inter-dependence of the various or rather multiple highly functional areas that are responsible for the fulfillment of the client orders (Shapiro et al., 2004).

The level of success in the contemporary business landscape is noted to be largely dependent on the level of commitment that organizations make towards the integration of processes across the traditional functional boundaries in order to serve customers better. For instance, Shapiro et al. (2004) outlined ten important steps that are important in the processing of customer orders. These include order planning, generation of order, estimation of cost as well as pricing, receipt as well as entry of order, selection of order as well as its prioritization, estimation of cost as well as its pricing, fulfillment, scheduling, returns and claims, billing as well as post-sale services. All these processes entails a complex mix of functional responsibilities which overlap and hence the need for the realignment of the various functional areas that lie within the organization. The alignment is conducted in order to enhance performance of the various processes. The general lack of a cross- functional alignment predisposes the supply chain processes to service failure in cases where the internal order fulfillment processes operates across the functional boundaries (Shapiro et al., 2004).

Mentzer (2004) suggested that the internal functional alignment is a very crucial element of SCM as well as the process of providing customer service. He went ahead and focused on the very first internal alignment driver by pointing out that;

"…it is a fundamental concept of supply chain management that you cannot coordinate functions across companies within the supply chain if you cannot do this coordination first within your own company […] the remaining 11 drivers will come to little if this first one cannot be accomplished." Mentzer (2004,p.24).

The work of Kahn and Mentzer (1996) later indicated that even though logisticians are often in talk of "integration" within the various channel contexts, they have failed to give equal attention within the larger interdepartmental system.

Research indicates that a general lack of alignment exists between the functional areas. This is however attributed to factors such as the conflict in the rewards systems, a lack of proper understanding between the peer functional areas, politics, functional separation, indifference un the top management as well as resource allocation problems as pointed out by Piercy (2007). Empirical studies on the other hand reveals a robust relationship between the inter- as well as intra-organizational alignment as pointed out by Stank et al. (2001). There is therefore a need for a more comprehensive understanding of the various factors affecting alignment between the peer functions and logistics to be developed.

Strategy #2: Collaborate with Supply Chain Partners on Non-Core Competency Functions

Collaboration as well as partnering between various companies is noted by Mentzer (1999) to be an increasingly common practice for various enterprises for the discovery and sustenance of a mutual competitive advantage. This requires a mutual level of commitment, common goals, objectives as well as trust (Dwyer and Tanner, 1999). Morgan and Hunt (1994) highlighted the need of proper communication as well as cooperation between in the process.

The collaborative partnership is realized via an extensive socio-economic, service as well as technical relationship that matures over along period of time as indicated in the work of Stern, El-Ansary and Couglan (1996).

The collaborative partnership is noted to be an inter-organizational concept that is developed as well as practiced between various independent firms in a vertical relationship that exists within the supply chain as pointed out by (Mentzer, Min and Zacharia, 2000). The advantages of partnering are often maximized whenever the retailers have decided on the partnership type that they wish to engage in. This can be on the basis of the partners' orientation as well as collaboration's depth.

There exists two forms of partnering'; operational partnering and strategic partnering as indicated by the work of Mentzer, Min and Zacharia (2000). The field of supply chain management has mainly focused on the concept of operational partnership an din particular on issues to do with throughput, cost and flexibility, waiting time as well as flow time as indicated in the work of Mentzer, Min and Zacharia (2000). Collaboration and partnerships can be used effectively by firms to gain competitive advantage. The concepts are however still in infancy. This therefore calls for the implementation of the concept of Collaborative Planning, Forecasting and Replenishment (CPFR).The concept of Collaborative Planning, Forecasting and Replenishment (CPFR) is based on a group of principles (VICS Association, 2002) some of which include;