Long-term effects of supply chain management on firm competitiveness

Supply chain management systems have become a common solution that firms are using to address a host of challenges. In order to determine the impact of different strategies there will be a focus on their long-term effects, potential weaknesses and how they can be addressed. These elements will provide specific insights that will help in analyzing the best approaches firms can use to enhance their procurement and logistics procedures.

Over the last several years, a variety of firms have been focusing on improving supply chain management. This is because these practices are shown to be an effective way for them to increase productivity and reduce costs. According to Singh (2011), this is becoming a vital area that is helping companies to address the needs of customers and improve their flexibility inside the global marketplace. The combination of these factors is giving them more adaptability in dealing with a host of challenges. (Singh, 2011)

To fully understand how this is taking place requires identifying the trends. This will be accomplished by conducting a literature review and providing recommendations about the best practices. Together, these elements will show what patterns are the most common and those that are just emerging inside the sector. This is the point that the impact of supply chain management practices on firms will be clear.

Findings

Supply Chain Management and its Uses

Supply chain management practices have become very common inside a number of different firms over the last ten years. This is because changes in customer demand and the ability to quickly respond to these needs has led to a shift in everyone's mind set. The results are that those organizations which are unable to embrace these transformations will be at a competitive disadvantage. (Singh, 2011)

For example, in 2000, Erickson briefly lost 3% of its market share to Nokia. The reason why is because their chip supplier in New Mexico had a fire at their plant. This caused inevitable delays. Over the next three quarters, the firm had to struggle to make up for the challenges. This is because globalization and the outsourcing of production can impact a firm's ability to deliver various products / services to customers. These factors are showing how all firms have to incorporate supply chain management as a part of their solutions. This means that more of an emphasis must be placed on enhancing these procedures and their ability to address a host of challenges. (Singh, 2011)

Management

The management of a supply chain is one of the critical factors that are having an impact on the ability of firms to compete in the global marketplace. According to Singh, this is becoming a common technique which is designed to provide improved customer service. As a result, this considered to be one of the most effective approaches in helping to enhance efficiency and reduce costs. This improves the customer's experience and helps firms to more effectively respond to changes inside the marketplace. (Singh, 2011)

However, maintaining this level of focus can be challenging. The reason why is because consumers tastes and technology are quickly changing. Those organizations that are not prepared to adjust will have trouble competing in the future. When this happens, there is a possibility that they could have a major disadvantage. To overcome these issues requires that firms have an active supply chain management strategy. This means developing one that is quickly evolving with the transformations in the marketplace. Those organizations that are able to achieve these objectives have a distinct advantage over others. This will help them to manage and address any kind adjustments early. (Singh, 2011)

There have been a number of studies conducted which are taking a general focus. This is because they will identify various trends. Yet, they will not address how these changes could make many ideas obsolete. In this information, Singh uncovered the most common issues impacting the management of the supply chain. However, many of his findings mirror the general themes that were discussed in previous research. (Singh, 2011)

Our study will use these ideas as a basic foundation for working off of select beliefs. Then, we will be studying current and new strategies. This is the point that the information will augmented with the previous findings. Once this happens, is when the objective and accuracy of the research will increase. (Singh, 2011)

Alliances

One possible strategy that will help to streamline the application of different theories is to form strategic alliances. According to Reza (2009), Vendor Management Inventory (VMI) approach is an effective tool that is having a positive effect in achieving these objectives. This is because it is having vendors and buyers work together in addressing a host of challenges. The ideal conditions for using these tools are when the firm is facing shortages. The reason why is from both suppliers and producers having the same objectives. This means that they can streamline their operations and focus on reducing costs. It is at this point they will be more effective in reaching out to different stakeholders.

Evidence of this can be seen with Reza saying, "This model is developed for a two-level supply chain consisting of a single supplier and a single retailer and examines the inventory management practices before and after implementation of VMI. The results of analytical examination show that VMI implementation in economic order quantity model when shortage is backlogged sometimes has the ability to reduce total costs of supply chains." These views are showing how the two tier system is addressing supply chain management issues. This resulted in other ideas being developed to show how alliances are an important part of this process. In the future, this is providing firms with a basic foundation for understanding and addressing these challenges. (Reza, 2009)

This information is building off of the findings from Uthayakumar. This is illustrating how the two tier system can help to streamline operations. However, as time goes by these ideas will become obsolete. The reason why is because they are focusing on particular aspect of supply chain management (i.e. during emergencies and backlogs). Where is it is failing, is through understanding how this strategy could be used when a firm is not facing these issues. (Reza, 2009)

This is problematic, as this approach has been shown to have trouble maintaining these levels consistently. Instead, it creates the necessary momentum to help a firm deal with critical issues. Then, it does not provide any kind of direction going forward. This is troubling, as these kinds of challenges will have an adverse impact on the ability of firms to streamline their supply chain management. (Reza, 2009)

As a result, our research will deviate from these findings by identifying other ideas that can be used during the process. These findings will be augmented with key ideas from other sources to provide a better approach for enhancing supply chain management issues. It is at this point that firms will have a working protocol they can use on a regular basis. This is when productivity will increase and costs will remain low. Over the long-term, this will help a firm to understand the challenges they are facing and how to quickly adapt to them. (Reza, 2009)

Decision Making

To deal with some of these challenges, many individuals believe that decision making must be streamlined during the process. The reason why is because the management can engage in more effective strategies in determining how they will address a host of challenges. According to Garg (2011), this is a part of an overall philosophy that can help to improve the supply chain management system. What he found is that most firms are often focusing on maintaining a single agent system. This places them at a strategic disadvantage. The reason why is because the approach limits the ability of firms to integrate their operations. When this happens, it becomes more difficult to communicate with others about critical issues. This is the point that costs will increase and productivity will decline. (Garg, 2011)

To avoid the challenges, those entities that were using a multi-agent system were more effective. This is because the process involved tremendous amounts of flexibility and it gave everyone the freedom to make adjustments. Over the course of time, this improved collaboration and it helped to prepare the organization for new challenges it is facing. (Garg, 2011)

Evidence of this can be seen with Garg saying, "To improve the performance of Supply chain decisions (SCM), agents technology is slowly becoming the best alternative. In general, most of the components in SCM work in isolation and achieving coordination among SCM partners turn out to be a difficult proposition. But in a multi-agent system (MAS), an agent while making a local optimal decision, it sees how it will affect the other agents and in case required it coordinates with other agents to work out for a new alternative. In SCM, what is required is how to improve the performance. Today SCM needs to work in coordination with various like-minded organizations to produce and supply to multiple market. In such circumstance MAS, with beneficial features like autonomous, collaborative, coordinate and intelligence with ability to work in a distributed environment provides a best platform to make SCM performing at its best." This is illustrating how a multidimensional approach needs to be used when addressing supply chain management issues. Once this happens, there will be improved decision making with the firm becoming more capable of understanding and responding to new threats. This is what helps to keep them competitive. (Garg, 2011)

The information from this source is showing that a multi-tiered approach is effective in dealing with a number of challenges. This is because it is streamlining decision making and utilizing flexibility in addressing a host of objectives. When this takes place, is the point that there is a transformation in the mindset of organizations. In many ways, one could argue that this approach will help firms in a variety of environments and conditions with addressing a host of problems. (Garg, 2011)

However, despite the benefits of supply chain management systems, Harris (2011) determined that many are ineffective procedures. This is because they are lacking any kind of critical ability to objectively analyze the process. At the same time, there are continually changing techniques and policies. This will have an adverse impact on the ability of personal to understand and quickly respond to new challenges. (Harris, 2011)

These problems will continue on a regular basis until there is a way of quantifying the long-term results and the best techniques. According to Harris, this is the reason why so many supply chain management strategies fail. The best organizations understand these ideas and will implement them into their system to enhance quality control. In the future, this allows them to be more responsive to the needs of customers and changes inside the marketplace. (Harris, 2011)

The information from this source is showing the weaknesses with the current research. In this case, there are no effective procedures for analyzing if the strategy is working and its long-term impacts. Instead, everyone will shift from one approach to the next. This will depend upon the changes that are taking place in technology and how it is perceived to help the firm. (Harris, 2011)

Our research will focus on building off of these findings to understand how these weaknesses are contributing to other problems. This is supporting the views from previous studies about how each approach will address select aspects of supply chain management. Yet, they will not understanding or have a way of objectively measuring the strategy. This hurts the firm's ability to adjust with new challenges, which will have an adverse impact on their costs and productivity. (Harris, 2011)

To address any kind of potential weaknesses Roa (2012) found that personnel play an important part in helping to make the company's supply chain management strategy a success. This is because staff can provide insights about what is happening in real time and they can quickly make adjustments. Furthermore, they can improve the customer's experience and provide insights about how to enhance the process. When this happens, a firm is more responsive to the needs of stakeholders and can quickly address to them. (Rao, 2012)

As a result, she determined that there must procedures where suppliers, producers, distributors and customers are communicating with each other. This means that there should be a focus on improving: procurement, warehousing, manufacturing and logistics. If this is combined with effective communication, it will improve the levels of collaboration between different groups. This is the point that the firm will become more responsive to needs of stakeholders. (Rao, 2012)

The information from this source is providing enhanced methods for researching the topic and understanding what challenges are affecting the supply chain management system. Then, it provides strategies that can address these challenges. This takes the direction of the research to another level by showing possible solutions for dealing with these issues. (Rao, 2012)

These ideas are building off of the previous sources by showing that some kind of flexibility must be incorporated into the process. Our research will focus on supporting these conclusions and testing other strategies. In the future, this will help firms to have tools they can use to enhance their supply management system. (Rao, 2012)

Another strategy that is used to enhance decision making is the resource value approach. This is when the firm will focus on maintaining strong supply chains to produce the final product or service to customers. The basic idea is that controlling these areas will ensure that they have access to the resources they need. This will allow them to meet the demands of customers in a cost efficient manner.

According to Storer (2011) these ideas have been used to improve the ability of firms to manage their supply chain and address critical issues. Evidence of this can be seen with him saying, "Results indicate that both small and large supply chain operatives in this industry believe these strategic capabilities influence and function as second-order latent variables of this strategic supply chain resource. Additionally respondents acknowledge size does impacts both the amount of influence these strategic capabilities have and the level of performance enhancement expected by supply chain operatives from utilizing industry-led innovation capacity." (Storer, 2011)

This is illustrating how these strategies can help firms to improve their decision making and streamline costs. It is at this point that their supply chain management techniques will increase and they will see a positive impact on their earnings. When this happens, a company will become more competitive. (Storer, 2011)

The information from this source is showing another approach that can be used during the process of evaluating the strengths and weaknesses of the supply chain. What makes it so unique is through analyzing the availability of natural resources to improve output. In general this will help firms to address critical challenges. However, a possible gap in the research is that critical areas could be overlooked or managers could begin taking a one size fits all approach. (Storer, 2011)

However, despite the benefits, numerous disruptions have been known to occur inside many networks. This is because there will be down time from having various systems malfunctioning. At the same time, no one is monitoring for anything that could cause a potential disruption. This is problematic, as these kinds of challenges will have an effect on the firm's ability to maintain high levels of productivity.

According to Bello (2012), there are many social -- economic factors that will affect this process. This is problematic, as the issues will impact the employee's state of mind and how they are evaluating problems. During situations, where the individual feels as if their ideas are not being respected, is when they will engage in actions that could be harmful to the supply chain. In some cases, this will take place through not monitoring and reporting what they find. While at other times, it could be based upon the refusal to engage in activities that will enhance quality. (Bello, 2012)

Moreover, Ho (2011) determined that employee attitudes and ideas will have an impact on how effective the supply chain is working. According to him, this can determine if the person is willing to do more to help the organization to be successful over the long-term with him saying, "The employees' attitude and assimilation impact on the performance of the supply chain. Collecting data from employees in the relevant departments from selected companies through a survey and applying SEM in the analysis, the study finds that the employee's perceived ease of use, perceived usefulness, and the subjective norm have a positive impact on their attitudes toward their use of the SCM systems. Furthermore, it was found that top management's positive beliefs and participation also have a positive impact on assimilation and SCM performance. Finally, it was found that attitudes toward the use of SCM systems impact upon information performance but not in other outcomes of SCM operations." This is illustrating how employee attitudes and ideas are an important tool that is used to help enhance the efficiency of the supply chain. (Ho, 2011)

The information from these sources is showing how personnel will play an important part in the success of any supply chain management system. This means that taking one kind of theory and applying it to the others will not address the challenges over the long-term. Instead, all organizations must have effective communication among the different stakeholders. As a result, the direction of research will focus on how these ideas can be implemented to enhance and improve the supply chain management systems at a variety of firms. (Bello, 2012) (Ho, 2011)

At the same time, some researchers believe that taking a global perspective will help to improve decision making. This is because the approach is looking at the firm's entire operations around the globe and its long-term impact on their bottom line results. According to Mital (2012), this will help to give companies compete edge in performing a wide variety of task and it will improve efficiency. (Mital, 2012)

However, the problem is that many of these challenges will impact the productivity of the organization in the long-term. This is because it is not accounting for unique events and situations that will have an effect on logistics. In a study that was conducted by Yu (2010), she found that these kinds of problems can become more severe when a firm is dealing with a natural disaster or power outages in particular areas. This is troubling, as these kinds of issues will more than likely eat away at the ability of the firm to improve productivity. It is at this point that they will experience down time (which will impact the innovation of new products and services for customers). To address these challenges, Yu believes that firms should outsource critical aspects of their operations. This means that they will have to enhance communication and collaboration in this process. (Yu, 2010)

Furthermore, Che (2011) found that there must be distributions plans and strategic partnerships developed based upon underlying need. This means that the firm, its suppliers and distributors must work together based upon achieving the same kind of long-term objectives. If this can take place, the organization will be more capable of dealing with a host challenges. This is when it will be more responsive to the needs of stakeholders. (Che, 2011)

Evidence of this can be seen with Che saying, "Supply chain planning has been regarded as a key strategic decision-making activity for the enterprises under the current business circumstances. From the point of supply chain planning, the important issues are to find suitable and quality partners and to decide upon an appropriate production -- distribution plan. In this study, hence, we address to develop a decision methodology for supply chain planning in multi-echelon non-balanced supply chain system, taking into account such four criteria as cost, quality, delivery and supplier relationship management and considering quantity discount and capacity constraints." (Che, 2011) This is illustrating how any kind of supply management system must have various organizations and individuals working together in achieving similar objectives. When this happens, it will be more capable of responding to new transformations and allowing the firm to remain competitive.

The information from these sources is useful in highlighting how other ideas must be integrated with any kind of supply management strategy. This is because there are many different parts that are working together. If any one of them is out of place, there is a possibility that the firm will face considerable challenges in overcoming them at some point in the future. To avoid these issues, all organizations need to incorporate select elements of them into their approach. (Mital, 2012) (Yu, 2010) (Che, 2011)

Conclusions and Recommendations

Clearly, supply chain management techniques can help a firm to improve its productivity and decrease costs. However, during this process is when they will more than likely face challenges in maintaining these levels. This is because the ideas that are utilized will provide them with a short to medium term benefits. The problem begins as the success of the system will lull managers and employees into a sense of satisfaction.

When this happens, there is a realistic possibility that the firm will begin to see an increase in costs and will experience delays. This is from no one objectively evaluating if the process is working and/or how it is achieving the larger organizational objectives. At the same time, there is a lack of communication / coordination between employees, executives, distributors and suppliers.

This will lead to some kind of disruptions from failing to address critical issues early. As a result, various strategies have been shown to be effective if they are combined with other techniques. Anything that is less than this standard will result in organizations dealing with a number of issues that are hurting their competitiveness. This is the point that the company will have trouble meeting the needs of customers and they will begin to lose market share.

To avoid these challenges, all firms must use different ideas in conjunction with other techniques. For example, the two tier approach has been shown to be an effective supply management system. This is because it is concentrating on integrating buyers and suppliers together. The way that this is achieved is by streamlining their goals and objectives.

However, in order to ensure that these kinds of changes will last requires implementing other ideas into their approach. The most notable include: improved communication, motivation, greater amounts of flexibility and realizing that no single idea is full proof. Instead, everyone must realize that they play a role in helping the organization to achieve its long-term objectives. This means that they can monitor for any kind of unusual activity and report their findings back to officials.

If this takes place, the system will be capable of dealing with a host of challenges. This means that the supply chain will realize an initial period of improvement. It is at this point, that these levels will hold and see long-term gains. This is from everyone feeling that they are part of the process in helping the firm to realize its goals. To achieve these objectives, requires that everybody identifying and fixing any kind of problems early. This will prevent supply disruptions and allow the organization to be successful.

The insights that were uncovered from the research are showing how an attitude of openness, verification and flexibility must be utilized with all supply chain management systems. This is because it can improve productivity in the short-term. The problem is that these changes will not last.

To combat these challenges, all organizations must include different stakeholders. They can identify critical issues and help the firm to quickly address them. In the future, this makes these organizations more responsive to the needs of customers and it enhances their ability to cost effectively provide various products / services to cliental.