Dec 14, 2017 in Economics

Supply Chain

Introduction

Supply chain is the involvement of parties directly or indirectly with an aim to satisfy consumer’s request. The supply chain includes transporters, retailers and consumers. This paper, therefore, identifies the development chain, global market forces, supply chain, risks involved in the field and also the strategies used into the supplier’s perspective.

In an organization, supply chain involves obtaining and filling a consumer’s request. This involves obtaining or acquiring a product in a supplier’s view. This includes a consumer visiting a supermarket to purchase a product. Different chains of supermarket stack the product obtained from the suppliers. This outlines the importance of the consumers. The main prospect of supply chain, therefore, is to fulfill the consumer’s needs and also making of profit (Waters & Chartered Institute of Logistics and Transport in the UK, 2007).

Supply chain, however, aims at the improvement of operations efficiency. Supply chain involves the dependency of each partner and their collaborations. The absence of supply chain involves logistics which incorporates the movement and placement of geographical inventory. Logistics occurs as a sub branch of supply chain. Supply chain, however, should eliminate issues like environmental, ethical and social that may affect it. The retailer is the person involved in the final process of ensuring the products reach the consumer market (Waters & Chartered Institute of Logistics and Transport in the UK, 2007).

Logistics involves planning, managing and organizing activities in a business environment. It also involves the movement, supply and maintenance of goods and services. Risk management is the study of uncertainty that affects an organization. These uncertainties should be handled in the most professional way to avoid them affecting the business in future (Bookbinder, 2011).

There are various factors that affect the supplier, consumer, retailer and manufacturer, and they include global market forces, risks and supply chain. These factors lead to the development of the supply chain. Supplier are affected and faced by increasing demand, thus must ensure that there is a flow of products in the market. They are faced with ensuring better environmental conditions as there are minimal suppliers of raw materials.

Global market forces are forces that come up as a result of foreign competition and created foreign consumers. Foreign competitors send shivers to companies that do not operate on oversea markets but operate on the home market. Ending this threat ensures that companies also join foreign markets. This is characterized by the fact that this growth is achieved only in foreign markets and those that are emerging. This is, however, characterized by the globalization of companies leading to competitors becoming global (Bookbinder, 2011).

Suppliers ensure that raw materials and finished products reach the markets the soonest the possible. The demand of products and raw materials limits the supply chain and logistics. This leads to suppliers ensuring better environmental conditions as there are minimal suppliers of raw materials. The global market forces shape the supplier to operate in the foreign market due to reduced cost of operation.

The emergence of new market has opened up many companies aiming to obtain a portion of the market share. This has, however, been associated with various risks. Supply chain is more opened to risks due to outsourcing. Offshoring also leads to risks affecting supply chain. Some of the various risks include natural disasters, epidemics, terrorist attacks, market changes, supplier’s performance, fuel prices, currency fluctuations and geopolitical risks (Holmes, 2002).

Suppliers are hard hit by risks as they shun their ability to ensure free flow of products and raw materials. Geopolitical risks affect suppliers greatly if they are operating in foreign markets. This leads to the loss of markets and products. However, some of the risks are controlled whilst others cannot. The ability of suppliers to act flexibly amidst demands helps companies to avoid risks. There are strategies that global supply chain should use to minimize risks and they include hedge, speculative and flexible risks (Holmes, 2002).

Companies should ensure that they come up with products that can compete in foreign markets. This however is a tedious task to complete. This is owed to the fact that some of the products produced should be designed for that particular region. Supply chain management should ensure this as it is proved that products compete relatively well. If the supply chain is not well structured, suppliers feel hard times in the supply of raw materials to firms leading to slow movement of products (Chakravarty, 2001).

Development chain is involved with production of new products. This chain, however, is manned by a different manager. The manager’s performance shows their responsibilities and ability to produce results. This chain has a series of problems that include technological change, product service and the decision of make and buy. Suppliers have a bigger challenge due to the frequent change of the technology. This chain is rocked by the challenge of selecting the right supplier. This is determined after factors including product design are conducted. This is also propelled by reduced raw material costs, increased quality and minimal time development (Waters & Chartered Institute of Logistics and Transport in the UK. 2007).

In conclusion, in order to achieve better results and attain profits, global forces and risks should be considered. Therefore, a proper understanding of the factors discussed above ensures a strong grasp of the market share and increased profits. Better supply chain ensures a massive mass customization leading to increased supply at a reduced cost. This secret leads to a company achieving a competitive advantage.

Related essays