The paper "The Impact of Supply Chain Management on Value Creation" is an engrossing example of coursework on management. Novel value prospects suggest a bright future for the supply chain management. The contribution of supply chain management to business value creation is a positive aspect of business sustainability and profitability. This requires supply chain managers to manage both down-stream and up-stream relationships. The value-creation engine for most modern organizations depends on supply chain management. However, only a few business professionals have recognized the importance of supply chain management in the creation of value for the business.
In this perspective, it is important to explore the role of supply chain management in value creation as well as establish how firms create value through supply chain management. For instance, P& G CEO emphasizes the call for procurement to operate with suppliers to accelerate time to market and reap benefits from the innovative roles of suppliers to ensure business growth ( Hoek, Mena & Gattoma 2014). The focus of this report is on highlighting the major concepts of supply chain management that are essential in ensuring value creation besides highlighting the challenges and prospects that surface when firms integrate and improve their supply chain process from, producers, suppliers, and consumers.
Although effective management of the supply chain promotes value creation, managing a supply chain does not involve a magic bullet. Instead, managing the supply chain for the best of consumers and firms calls for multiple activities that include managing risks and demand for both investment and commitment. Firms are held accountable for incidents down-stream and upstream, hence a need for the effective supply chain management. Discussion Conceptual Background Globalization and advancements in technology have brought about quite informed customers who expect firms to ensure customer value.
Businesses in the modern world hold supply chains that drive the flow of information, products, and services. Supply chains support the movement of services and goods from the suppliers to the consumers. Although supply chains play a crucial role in ensuring consumer satisfaction and a firm’ s productivity, these supply chains require effective management. In the contemporary globalized world, supply chain management plays a crucial role in the attainment of competitive advantage.
Supply chain management is a comparatively novel management concept and entails more than logistics and operations to include value creation for customers. Value creation is a major aspect that helps in the attainment of a firm’ s competitiveness. In the current marketplace, firms do not compete for a one-on-one but do so through their supply chains. These firms create value by removing waste from their supply chain. Through streaming supply chain processes, using technology, and establishing a powerful relationship with suppliers, a firm attains profitability. Drawing from Porter’ s value chain blueprint, firms require to develop the value that surpasses the production costs of their services or goods to consumers.
Maximizing the activities in inbound logistics, operations, procurement, human resource management, technology development, service, sales, and marketing is a key step to attaining a competitive advantage. Supply chain management is a principal process-improvement, revenue-enhancing, and cost-saving business policy. According to Oliveira and Gimeno (2009), the supply chain creates value through cost reduction. Cost reduction is absolutely a crucial component of supply chain management. With regard to Porter’ s value chain, the elements of the supply chain should undertake more activities that focus on creating value for consumers and business as the product move along the supply chain.
Firms can focus on value creation in order to gain competitive advantages.
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