|Categories:||Supply chain management|
Supply chain management is an essential component to a business in efforts of satisfying customer expectations. The decisions made in the department have to meet the environmental needs for the firm to remain competitive and relevant. The organizational structure, therefore, should be tailored to allow strategic decision making that reflects the current customer needs, which change from time to time. Therefore, business process should have regular reinventing to create competitive advantage and hence affecting some areas of supply chain management.
The business process integration affects the ways in which critical activities are carried out. For example, Nortel Networks Corporation came up process integration that aimed at reducing their reliance on suppliers in the satisfaction of their customers. The business wanted to increase their store network and enhance their presence to the end use of their products. Nortel Networks supply chain management was affected, and there was a reduction of the number of suppliers (McAdam & McCormack, 2001). The communication between vendors in the supply chain was also affected, and suppliers were allowed to communicate with each other either through the formal communication linkage or an informal network. The communication between the supply chain members also ensured that there were no rigid boundaries for markets. Therefore, the business process integration of Nortel Networks making the business agile affects the communication of the supply chain as for more efficient customer service and consequently satisfaction (McAdam & McCormack, 2001).
For successful external business process integration, there is a need for support from the internal strategies. It is because, in the backing of the business processes, the internal business component has to work in a way to support the external strategies to succeed (Cagliano, Caniato, & Spina, 2006). Any changes that the external business process needs to be done on the products though manufacturing need o be effected from the internal plans. The internal operations must be linked to the supply chain so that the supply data can be used in making a key strategic decision in the internal functioning of the organization. The purchases made by a company affect the manufacturing process in that they determine the effectiveness of the production process. Business process integration should be connected with an efficient communication system such as Enterprise Resource Planning (ERP) systems. The electronic system ensures that there is a link between the physical raw materials and the data with the suppliers and hence a smooth production and supply chain process (Themistocleous & Corbitt, 2006). The management is better when the suppliers are few as opposed to a high number. As per the case of Nortel Networks Corporation, the reduced number of vendors made data access easier and communication better and hence an effective manufacturing process. The supply chain management of an organization, when linked with internal strategies, leads to improved production and its raw materials section becomes better.
Customers need a timely response to their requests (Lambert, 2008, p. 3). Business policy integration has lead to a change in organizational structure that reflects the customers demands as well as the implementation of strategies that are cost minimizing. Inventory storage increase stores require an organization can eliminate with an effective system in place that allows enables just in time production. In this case, organizations install systems that can communicate with the supplies or raw materials immediately an order is made if the supplier is not located far away from the manufacturing plant (Croxton, Garcia-Dastugue, & Lambert, 2001, p. 24). The method eliminates unnecessary waste and production that may lead to manufacturing of products that customer may not need. In a case where the suppliers of raw materials are situated away from a company, the supplier can store raw material but, what is just enough. Then, the order goods by customers through the system distributed directly to them. In all the cases, in the supply chain management, the distributors and other dealers are eliminated, and the end customers buy the products at the company recommended retail price. Also, on top of the low price, they gain the confidence in a companys products as they always receive genuine ones.
Integration of business processes may lead to increase in the stores for some products served under certain conditions. Also, the distribution of the manufacturing plants may be situated near to customer for bulky if raw materials are locally available, for example, Coca-cola company Inc (Torjesen, 2011). The company situates its manufacturing plants near the customers in different locations with several of them in the same country. The situating of the manufacturing plants near customers leads to shortening of the supply chain eliminating middle dealers.
Customer needs change often, and hence successful businesses change their processes to suit the customer needs. During implementation and application of the firm process integration, supply chain management is affected in different ways depending on the changes made on the organizational structure. Some of the supply chain areas affected includes reduction of suppliers to few ones. The fewer number of vendors may help the organization in serving the customer more closely and ensuring they receive genuine products as well as monitoring their changing need such as in the case of Nortel Networks Corporation. The internal business operation needs to be incorporated into the external strategies to control so that the supply chain can help in achieving the objective of the new process. Finally, process integration can shorten the supply chain management of an organization by eliminating dealers and distributors.
Cagliano, R., Caniato, F., & Spina, G. (2006). The linkage between supply chain integration and manufacturing improvement programmes. Int Jrnl Of Op & Prod Mnagemnt, 26(3), 282-299. http://dx.doi.org/10.1108/01443570610646201
Croxton, K., Garcia-Dastugue, S., & Lambert, D. (2001). The Supply Chain Management Processes.The International Journal Of Logistics Management, 12(2).
Kumar, S., Teichman, S., & Timpernagel, T. (2012). A green supply chain is a requirement for profitability. International Journal Of Production Research, 50(5), 1278-1296. http://dx.doi.org/10.1080/00207543.2011.571924
Lambert, D. (2008). Supply chain management (2nd ed.). Sarasota, Fla.: Supply Chain Management Institute.
McAdam, R. & McCormack, D. (2001). Integrating business processes for global alignment and supply chain management. Business Process Mgmt Journal, 7(2), 113-130. http://dx.doi.org/10.1108/14637150110389696
Themistocleous, M. & Corbitt, G. (2006). Is business process integration feasible?. Journal Of Ent Info Management, 19(4), 434-449. http://dx.doi.org/10.1108/17410390610678340
Torjesen, I. (2011). Coca-Cola supply chain helps bring diarrhoea treatments to developing world. BMJ,343(sep13 2), d5825-d5825. http://dx.doi.org/10.1136/bmj.d5825
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