Introduction

Supply chain management is related to the management of interconnected or intermixing of the activities and network channels that is followed for the movement and storage of the raw material, work in process inventory and finished goods from the origin point to consumption point. Similarly, the supply chain is related to the system of the organization, people, activities and resources those are involved in the moving of services or products from suppliers to customers (Delfmann, 2007). Supply chain management is influenced by various factors as production, distribution and sales of those goods and services are also bound with the demand, supply, capacity, capability, and countless of other parameters. So, there will be discussion about the strategic implications of the supply chain management.

Goals of Supply Chain

The goals of the supply chain are as follows:

The main aim of the supply chain is to reduce the organizational inefficiency through maintaining coordination among suppliers, production facilities, distribution channels and customers (young, Yang & Roh, 2012).

• To deliver the right product at the right time to the right place
• To deliver products at minimum cost (Randall, Morgan & Morton, 2003).
• To maintain quality of the delivery of services or products
• To provide quality products in right quantity (Youn, Yang & Roh, 2012).
• Reduce organization’s extra cost (Gunasekarana, Laib & Cheng, 2008).
• Increase efficiency and effectiveness of the products and other departments to deliver products as per customers demand (Randall, Morgan & Morton, 2003).

Difference between Responsive and Efficient Supply Chain

Efficiency and responsiveness both are important objectives of supply chain management. Responsiveness are related to the ability of the supply chain to respond towards the customer’s request within an appropriate time scale along with changing in the marketplace. On the other side, efficient supply chain is related to the focus on cost reduction along with avoiding the resource wastage on non value added activities (Youn, Yang & Roh, 2012). In case of low profit margin, low product variety and stable demand forecast, efficient supply chain are effectively working for the firm (Delfmann, 2007). In contrast to this, when organizational product shows higher profitability, high product variety and volatile demand in the marketplace and includes adoption of the customers’ preferences quickly; responsive type of supply chain is followed by the firms. Efficient supply chain focuses over the current practices and management of the supply chain management. At the same time, responsive supply chain focuses over the involvement of changing market requirements (Randall, Morgan & Morton, 2003).

Efficient supply chain support to the entire exchange of the information with the members of the supply chain to ensure the success of the supply chain management through making easily available of information to each member (Gunasekarana, Laib & Cheng, 2008). While, responsive supply chain seeks to the new way of running to meet the challenges in supply chain management. Independent ordering process is followed inefficient supply chain management to meet with the predictable demand at the lowest cost. On the other hand, responsive supply chain supports the flow of information along with forming policies as per hedge inventory and available production capacity in against of the uncertain demand (Youn, Yang & Roh, 2012). Furthermore, efficient supply chains are designed and prepared by the firms for minimizing the cost that requires high utilization along with minimizing inventory. So that appropriate vendors can be selected based on the cost and quality those can produce products at minimum cost (Delfmann, 2007). At the same time, responsive supply chain is designed to reduce the lead time for responding towards the unpredictable demand in the marketplace through minimizing stock out costs and obsolete inventory costs (Randall, Morgan & Morton, 2003).

So, the above discussion shows difference between responsive and efficient supply chain those are followed by the firms while using such objectives in supply chain management. Responsive and efficient supply chains are distinct from each other and it is not possible that a supply chain can be both efficient and responsive (Youn, Yang & Roh, 2012). It is because both focus over the different features of the supply chain management as effectiveness is related to the cost minimization to deliver the organizational products to the customers at the highest level while responsive aspect is related to the time concern in supply chain management (Gunasekarana, Laib & Cheng, 2008). But the aim of both aspects is similar that is increasing efficiency and effectiveness of the organizational supply chain management so that organizational products can be delivered to the customers at higher extent (Rafinejad, 2007).

Actions to Improve Results and Remove Obstacles

In order to improve results, the firm can optimize the supply chain through taking sufficient actions and practices. Improvement and success in supply chain management both depends over various primary drivers’ as well defined process and guidelines for decision making process, removal of functional and organizational barriers, visibility to change in demand and effective plan to drive the supply chain operations along with integrating information across the supply chain (Skjott-Larsen, 2007). These are important for improving results in supply chain management as this promotes coordination among the components of the supply chain those work without any functional barriers (Information Connects, 2007).

Forecasting initiatives can be also applied by the management to ensure the improvement in results and remove obstacles from the supply chain management. It is because it covers all aspects of the supply chain as Assemble to Order (ATO), Make to Stock (MTS) and Make to Order (MTO). Horizontal and vertical visibility into their supply chains can be also used by the firm to improve results and to remove obstacles (Skjott-Larsen, 2007). It is because it will help to take effective decision related to the identifying an end-to-end solution starting with forecasting, planning, and scheduling, and ending up with transportation planning. Decisions that are taken for purchasing, producing, storing, and distributing goods are interlinked with each other and change in anyone may affect to the supply chain that should be also remembered by the management to improve results and remove obstacles from the supply chain (Rafinejad, 2007).

For example, production, distribution and material will be impacted by the planning of upcoming seasonal builds and cut down the 20% price by the competitors may affect the entire supply chain. It is because if a single production line in a facility is down for a whole day that the rescheduling of the production will be effective to avoid delay in meeting with the customers demand (Rafinejad, 2007). Through using information-driven value chains results can be improved and obstacles can be removed. For example, Oracle Company uses the information-driven value chains that help it to predict market requirements and risks that help it to adopt innovative responses towards the volatile market conditions (Information Connects, 2007).

Conclusion

On the basis of above, it can be concluded that supply chain management is an important part of the organizational operations to ensure the delivery of the goods to the customers. It can be also concluded that supply chain management also affects to the operational efficiency due to influencing demand of the customers and aligning with that demand in the market.

References

Delfmann, W. (2007). Managing Supply Chains: Challenges and Opportunities. UK: Copenhagen Business School Press DK.

Gunasekarana, A., Laib, K & Cheng, T. C. E. (2008). Responsive supply chain: A competitive strategy in a networked economy. Omega, 36, 549-564.

Information Connects. (2007). Oracle Supply Chain Management. Retrieved from http://www.oracle.com/us/products/applications/oracle-supply-chain-brochure-065282.pdf

Rafinejad, D. (2007). Innovation, Product Development and Commercialization: Case Studies and Key Practices for Market Leadership. USA: J. Ross Publishing.

Randall, T. R., Morgan, R. M & Morton, A. R. (2003). Efficient versus Responsive Supply Chain Choice: An Empirical Examination of Influential Factors. Journal of Product Innovation Management, 20(6), 430-443.

Skjott-Larsen, T. (2007). Managing the Global Supply Chain. UK: Copenhagen Business School Press DK.

Youn, S., Yang, M. G & Roh, J. J. (2012). Extending the efficient and responsive supply chains framework to the green context. Benchmarking: An International Journal, 19(4/5),463- 480.