The supply chain management is the driving force behind a business. It includes the process of acquiring the raw materials necessary for production, production, packaging, branding and distribution of goods and services until they get to the end consumer. The process determines the success or lack thereof of the business in the marketing. SCM determines the core competencies of the firm (Stadtler, 2015). The best firms in the world have established stellar SCM systems to run their businesses. The globalization phenomenon implies that firms throughout the world are facing extreme competition form the global multinationals (Stadtler, 2015). This has forced the different businesses and companies to step up and make innovative and creative strides to improve their SCM systems.
The success of businesses is determined by the ability to obtain its raw materials, and produce quality and up to standard products. The quality of the products is determined by the technology and the motivation of the human resources. Afterwards, the products need to be distributed to the end producer who has demand for them (Fawcett, Ellram & Ogden, 2014). The distribution and logistics systems of a business are therefore important in its business section. The speed and distance of coverage of the distribution system of a business is also another differentiating factor for products and brands in the market (Fawcett, Ellram & Ogden, 2014). In this era of high competition in the market, a functional and innovative SCM could be the difference between success and failure in the market.
Businesses can also establish B-2-B relations with other firms in the industry. This can aid in their SCM. This can be observed in several markets through joint ventures, acquisitions and the outsourcing aspects. Businesses need to concentrate on their core competencies (Fawcett, Ellram & Ogden, 2014). In cases, they need certain activities they cannot deliver efficiently, they can outsource to a second party that can deliver these activities and then hand them over to the outsourcing company. This can help the firm cut on costs on delivering these activities in-house and help boost the quality of the products and services the company produces to the market.
Statement of the Problem
The importance of the SCM can be established through analyzing the effect the SCM has on a business. The production process involves the harnessing of the effort of the human resources and the technology and equipment availed to them with the strategy and policy of the business. However, the production process needs to liaise with the sales and marketing departments of the firm. Additionally, the management and the decision makers at the firm also need to be informed and make their contribution to this process. At the end of the day, the production process is coordinated among several departments within the business. The focus on customer-oriented polices also means that the corporate social responsibility, the profitability, competition and external environment are crucial to determining the production, distribution and sales as well as marketing strategies of the firm. All these issues are comprised in the firm’s supply chain. There is a need to establish the role of SCM in the evolution and strategic business positioning. The influence of SCM on the marketing policies, financial projections, profit margins as well as innovation and creativity at the firm need to be established if the SCM concept is to be understood well.
The importance of SCM can be manifested by the emphasis on the sustainability business models that the environmental activists and now the authorities and governments in the world are insisting upon (Tayur, Ganeshan & Magazine, 2012). The SCM of a business determines the quality of service of product it puts out in the market, its competitiveness as well as its impact to the environment and the society as well.
The process of production for example is the biggest contributor to emissions in the world through the manufacturing industry (Stadtler, 2015). As a result, the SCM systems of businesses have been the focus of the green or eco-friendly movements and transformations of businesses. These have also been part of the CSR initiatives of businesses (Barney, 2012). The profitability of the business models depend on the efficiency of the SCM.
The study took the case study approach. The study focused on two case studies of two companies, one from a developed country and another form an emerging economy. The case studies were the Apple Inc. SCM and the Chinese National Petroleum Company (CNPC). These companies’ SCMs were analyzed (Bozarth & Handfield, 2015). A comparative analysis was carried out to establish the differences and similarities.
Results and Analysis
The results established that the SCM of these companies are crucial to the business and success of these companies. The business emphasis on SCM can be demonstrated on the multinationals that operate in several countries in the world (Bozarth & Handfield, 2015). Sustainability and eco-friendly approaches have transformed SCMs of these multinationals and the business sector in recent years.
Business SCM influence the functioning and coordination all aspects of the business. It is necessary for a business to establish a working, effective and profitable model in this competitive globalized market.
Barney, J. B. (2012). Purchasing, supply chain management and sustained competitive advantage: The relevance of resource‐based theory. Journal of Supply Chain Management, 48(2), 3-6.
Bozarth, C. C., & Handfield, R. B. (2015). Introduction to operations and supply chain management. Prentice Hall.
Fawcett, S. E., Ellram, L. M., & Ogden, J. A. (2014). Supply chain management: from vision to implementation. London: Pearson.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Tayur, S., Ganeshan, R., & Magazine, M. (Eds.). (2012). Quantitative models for supply chain management (Vol. 17). Springer Science & Business Media.
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