Question

1) describe the Supply Chain activity,

2) explain how it interacts or connects with other Supply Chain activities and,

3) explain how, when successfully managed, this activity supports the overall business.

Answer 1

SUPPLY CHAIN ACTIVITY DESCRIPTION

The purpose of Supply Chain activity is to enable a linkage of the flow of goods from the raw materials to its end-users thereby including a broad network of Company’s various parties such as the suppliers, the intermediaries and finally the customers. When this network is managed with Enterprise Resource Planning (ERP) systems, then the flow of goods as well as money from one end to the other alongside flow of information in a unified way becomes more feasible. With such activities in the designing of a firm’s Supply Chain network, there is higher efficiency established in the system that gives rise to the income generation power of the firm and adds value to the end product that reaches to the customer.

The firm’s Supply Chain activity would therefore include effective marketing channels in its network designing part that could be typical to countries or regions in terms of the Market segmentation. It is to be also noted that a Company’s supply chain network can never be static and evolves in response to various scope available in a specified regions and the conducive conditions helping the same.

The Supply Chain activity further needs to be considered in order to undertake various crucial decisions. The distribution of supply chain could be intensive or selective or exclusive, depending upon the Market segmentation. Intensive distribution is aimed at maximum market coverage; selective distribution is aimed at making the product available to selected dealers or retailers only in a given territory while an exclusive distribution is most restrictive form of market coverage. Based upon the category of classifications, under the Market segmentation, the firm’s supply chain design helps in easier differentiation of its offered products to the target audience. It further takes into consideration the Target market factors, product related factors and Company-related factors more efficiency and effectiveness of the supply network channel so resorted to which is all in turn depending upon the Market segmentation concept. Further it also enables to manage the channel relationships by empowering the channel, controlling the same and undertaking the channel leader role. In case of the service channels, minimizing the waiting time, managing service capacity and improving service delivery mechanisms also help in making the network efficient, more effective and differentiated from that of the others. Therefore, in this entire manner, Supply Chain activity has resulted in enhancing the Customer value.

INTERACTION AND CONNECTION WITH OTHER SUPPLY CHAIN ACTIVITIES

In logistics and transportation under Supply chain activities, control systems in the ERP such as SAP i.e. Systems Applications and Products, could be identified as well, in Data Processing for the details pertaining to the logistics and transportations. SAP is an ERP package aimed to cover all the functional aspects of a Business. SAP is now one of the leading ERP (Enterprise by Resource Planning) available in the market that serves the purpose of Control systems at work very efficiently.

Radio-frequency identification (RFID), as an activity, also has a very significant role to play in Supply Chain and Logistics Management. The RFID chips are used to transfer the data between such chips using a wireless form of communication system. Following are the role of RFID chips in Supply Chain:

• In Supply chain, when the transported goods are to be delivered urgently, then RFID technology could be used to resort to the fastest toll booth lane in order to reach the destination faster, with a deduction of certain dollars from the account to avail such a privilege.
• It helps in tracking the shipped items on real time in the Supply Chain network.
• Further, the role of RFID chip is extremely important in Supply Chain when a certain truck is loaded with goods and once the goods are delivered, this chip helps to identify how much of the goods are loaded in the truck and out of it, how much is unloaded upon delivery or removed.
• When the contents of the boxes are tagged with RFID chips, then the moment those boxes are delivered to the customers or clients in the Logistics network, such customers or clients would be instantly in the position to identify all the contents within those boxes.
• When these RFID tags are zoomed under the scanner, there could be an instant inventory count in the system with further details of the stock, thereby making the RFID tags very suitable even for the small and medium scale businesses, to maintain the accuracy check of the inventory.

When the end-users are happy with the Supply Chain network in place, the customer service activity is a pleasant experience to both the parties

RESULTS WHEN SUPPLY CHAIN IS SUCCESSFULLY MANAGED:

• It helps in collaborating with other Companies not to compensate for the weaknesses but to build upon the strengths of both the Companies in establishing joint-venture is a key to success. For this, the infrastructural assistance is also essential to ensure the collaborative effort is a success.
• Such models could be incorporated in the collaboration process such as that of the Right-benefit sharing that could ensure that the joint-venture is fruitful to both the Companies in order to bridge the gap of the strategic priorities of each of the Company.
• The foreign partner so selected for the venture could be on the basis of the value creation potentialities that it can generate, the strategic goals that they plan to realize and the overall capabilities that they possess. Further, there should at least some common strategic interests between the two Companies that could make the venture possible.
• The resources employed in the collaboration process needs to be evaluated well and especially when it comes to dealing with the Human resource because it is this resource that can ensure the success of a collaboration. Additional resources, in whichever form, if required needs to be pumped into the collaboration so as to facilitate the process of building this new venture.

It is to be noted that there is efficiency is when the function or an activity is performed in the most optimum way that ensures the least wastage of resources be it in terms of money, time or efforts whereas on the other side, Effectiveness would mean to make a positive impact of the activity undertaken in a way it was intended to work by accomplishing the purpose that could determine the same.

Let us take an example of toothpaste. The efficiency could be measure by the way the toothpaste is squeezed out of the tube such that by the time the tube is on the verge of getting over, there is barely any material left inside the tube. This is called efficiency, that is, to make the most out of the product. On the other side, effectiveness could be determined the way this toothpaste works in order to act as a remedy to various dental issues that the product claims to take care of, such as sensitivity, plaque, cavity, gingivitis, etc.

Applying the same in case of Supply chain activities, the channel is said to be effective when the finished goods reach the market at the right time while efficient when the minimum resources are employed in making the goods reach the market by resorting to the channels that can avail the maximum advantage at the most competitive cost. Accordingly, the supply chain could be efficient without effective when the resources employed in the channel such as the cost of intermediaries, are limited, however, it fails to make the products reach to the final consumers on time. Thus efficiency lacks effectiveness of the same. On the other hand, the products may reach the market on time but the resources employed for the same could shoot up the cost of the channel intermediaries considerably. In such as case efficiency would be giving way to effectiveness only.