The main and overall goal of any supply chain is to reduce a company’s ineffectiveness. This can be in the supply of their raw materials which can lead to delays in production; payment of inventories should be done as soon as an order of the raw materials is done. The supply of the already manufactured and processed good to the market should be timely (Leeman, 2010). Ineffectiveness in economic activities has very harsh financial consequences as delays leads to loss of revenue and opportunity. In a nut shell reducing the ineffectiveness ensures that the company is cost effective (Wang, 2007).
An efficient supply chain is one that adds value to the business cycle experienced by the company at any part of the financial year. This means that it should be clearly outlined and executed in a way that is able to reduce any losses that can be experienced. Efficiency comes in ensuring that all the roadblocks are all removed, these include lack of enough raw materials and labour, lack of funds to pay for supplies and the lack of market for the final products (Wang, 2007). All these should be easily avoided with an efficient supply chain because it is based on information and data collected coupled with the experience of the firm.
A supply that is responsive is one where changes in the factors that affect the supply of goods and services, raw materials involved, lead to changes in the quantity supplied to the firms and to the market (Leeman, 2010). These factors can be price and government policies, for instance changes in the tax rate leads to increase in the price for the final buyer, this reduces the purchasing power and ultimately the quantity supplied. This is a responsive supply chain.
Yes, a supply chain can be both, in fact they complement each other. This is because when it is responsive it means that the supply chain has to be very efficient because small changes and delays can lead to major losses. It also allows for adaptability to changes in the business cycle, this is because there are differences in demand for goods at different times of the financial year (Langley, 2008).
Can organization can optimize their supply chain management. This is because different firms work using different budgets and different market share control and suppliers. This means that no one supply chain management strategy can be identical to another.
This has increased efficiency and consistency as well as made it possible to apply some of the business strategies like just in time to solve the manufacturing process issues.
The strategy used in the supply chain has massive importance because it affects the ultimate performance of a firm. Cost effectiveness is always the target of any firm, but good quality products get better sales and increase the profit margin. This means that cost reduction strategies should not lead to decrease in the level of the quality of the final products. This can be ensured by using the following:
Leeman A. J. Joris, (2010), Supply Chain Management, Random House Publishers
Wang C.Y. William, Heng S. H. Michael, Chau K. Y. Patrick, (2007), Supply Chain Management: Issues in the New Era of Collaboration in Industries, University of Oklahoma, Oklahoma
Langley C. John, Gibson J. Brian, Novack A. Robert, (2008), Supply Chain Management: A Logistics Management, Orthodox Print Press, New York
PLACE THIS ORDER OR A SIMILAR ORDER WITH GRADE VALLEY TODAY AND GET AN AMAZING DISCOUNT