Question

NO PLAGIARISM!!! NO PLAGIARISM!!!

(a) Discuss the strategically important reasons for adopting Supply Chain Management? (b) SCM is not without problems. Adopting SCM often involves risks and negative consequences. Other than the Bullwhip effect, what are the potential negative aspects (e.g., drawbacks, risks, any other undesirable consequences) of Supply Chain Management? You may utilize current real world examples (e.g., Coronavirus Pandemic) in making your arguments.

Answer in more than 750 words, less than 1000 words.

Answer 1

a.

With an effective supply chain management, an organization can obtain the competitive advantage in the industry they are working in. While there can be many different reasons to incorporate supply chain management practices, some of the imporatnt reasons to adopt the supply chain management are given below:

1. Forecasting or predicting the demand is one of the most relevant and important activities for the higher efficiency of the company in fulfilling the company. Incorporating supply chain management helps in adjusting more dynamically to fluctuating economies, emergency markets and shorter product life cycles. Supply chain provides higher efficiency in doing so.

2. Communication among the different members in the process of selling the product is important. Supply chain management allows us to communicate effectively. Hence, coordination and collaboration are improved among different vendors, suppliers and transport companies.

3. Supply chain can be the focus of creating open business activities to the new technologies. It helps in better coordination and hence higher profit levels are achieved.

4. Delay in the process of supplying the products from one place to another is a major problem. It causes additional costs and opportunity costs to the company. Hence, supply chain management by improving the communication among various members, helps in reducing or minimizing the delays so as costs are also minimized.

5. Supply chain network enhances the sustainability of a business which is not easier to achieve without a supply chain network in a customer focussed market with customized and personalized products. Hence, better networks are achieved.

6. Vendors and distributors are important part of taking a business to a level which is at par with the competitors. They do so by maintaing communication and knowing what is happening in the market as well as at the different levels of the supply chain network. Supply chain network helps in boosting the co-operation level of all the elements of a supply chain network.

7. The costs are an inevitable part of any supply chain network. Supply chain management helps in identifying the various costs such as inventory costs, damage costs etc. Also, the costs are dependent on the relationships with the distributors and the vendors. Supply chain management helps in identifying various costs and then decrease the cost effect so as to optimize the supply chain network.

8. The ability to compete in international markets is only feasible if the company has competitive prices of the products internationally. A supply chain management is a way to achieve the competitive prices in the international markets. Hence, it is necessary.

9. Supply chain results in achieving the market leadership by gaining the loyalty of the customers in the market.

Example - Hindustan Unilever is a maket leader in India due to availability of its products in every shop or retailer in India.

b.

1. A project which is being implemented in supply chain management involves many departments in it. For example - Purchasing, Planning, Manufacturing, Distribution, Information Technology, HR etc. All these departments works for their efficiency and it is diffiult to integrate them in the same goal. The conflicts arise and hence, the supply chain management proves out to be harmful.

2. Over a period of time, the projects implemented in a supply chain management gets more and more complex over time. More and more functions and features gets added up and as a result, the project is not completed on time. The project would be inflated to such an extent that it might not even be achievable and most projects are left in the middle.

3. The heavy investment of time, money, useful resources pose a serious risk to the project of a supply chain management. Hence, supply chain management poses a risk in the implementation. This gives rise to the volatility and may prove out to be loss in some cases.

Example - Walmart has a capacity to take risks more effectively than any other retailer. Hence, Walmart brings products at lower prices to its customers than any other competitor in the market. This gives a competitive advantage to Walmrt over other retailers.

4. Integrating the supply chain is much more difficult than it is perceived. No doubt, that the integration leads to lowering the bullwhip effect but also, it is evident that integration is not always a success and proves to be fatal.

5. In most of the cases it is observed that supply chain management is considered as a result of Information Technology. However, quality of data and security of data is not focussed much which is an important point.