What I See as the Future of Supply Chain

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Category: Business and Industry

Date Submitted: 09/24/2012 08:20 AM

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By Olukayode. A. Oke

Supply chain management is the strategic coordination of organizations, their facilities, functions and activities for the purpose of optimizing supply and demand management. Every organization is one way or the other is a part of a supply chain and in some cases companies are part of multiple supply chains. In the past, most companies focused on only their internal processes and how the processes combined together produce finished goods, leaving out issues of transportation, supplier relations, and an increasing demand for goods in a global economy. The result, a disjointed and often ineffective supply chain.

Even as companies have benefited in many ways from recognizing and optimizing their supply chains, it does come with its own challenges. Some of the challenges facing supply management are: barriers of integrating separate organizations or even functional areas within a specific organization: where an objective of a functional area that optimizes its results sub-optimizes the result of another. Another problem caused by this challenge is restricted access to internal data of the company for lack of trust or fear of exposing propriety information to competitors. Other challenges facing supply management are getting all stakeholders and decision makers within the organization on board, dealing with tradeoffs of lead time-transportation cost. this challenge would either lead to longer lead time if the supplier decides to wait for full load before shipping or increased transportation costs if shipments are made as soon as they are requested. These challenges can be overcome by (1), Adopting a systemic approach to both internal and external portions of their supply chain which helps to make decisions that optimizes the overall supply chain as against that of functional areas. (2) Sensitizing managers and workers on the benefits of an effective supply chain, that is, streamlining process and...