Supply chain management is a key issue that an organization needs to cater, in order to carry its business functions effectively and smoothly. Without the supply chain management the business are unable to flourish and cannot survive in the long run.
Management supply may be described in two ways. One aspect is the supply chain management with the customers and the other aspect is the supply chain management with the suppliers. If one aspect is disturbed the other would automatically be affected.
The supply chain management can be technically divided in two contexts. One I Upward/backward supply chain that is the supply chain management with the suppliers and the other is the downward/forward supply chain that is the supply chain with the customers or the ultimate consumers.
Management supply can also be regarded as the supply of information between the different levels of managent, which also needs to be given due consideration because without the proper management of the information amongst the hierarchy of the organizations, functions cannot be performed effectively. But in the better context management supply is more regarded as the management of the supply of the goods/services between the suppliers, customers and the organization itself.
Supply chain can be managed by making good relations with the suppliers and with the customers as well. If the the supply chain with the suppliers is to be managed then, better and competitive suppliers need to be sought. The organization should not be dependent upon one supplier only because if one supplier cannot cope up with the demands and needs of the organization, then the organization should have a choice to switch to other suppliers. This would make the supply management effective.
Another important activity for the supply chain management is the ‘backward integration’ of the supply chain. In this activity the organization would buy the suppliers and this would make the supply certain. Backward integration would also lead to cost cutting as the organization would handle the supply function itself. However, cost-benefit analysis and practical implications need to consider before indulging into backward integration.
The other aspect of the supply chain management is the supply of the goods/services to the customers. If the customers are happy with our supply chain, then they would not seek to switch to other suppliers. For better supply chain management, with the customers, brand loyalty should be developed with the customers and effective supply of goods and services should be assured so that the customers may not be drifted away.
The supply chain with the customers can be managed effectively by doing ‘forward integration’. In this way the supply channel which is adopted for supplying the goods to the customers is purchased and handled by the organization itself. This would ensure the effective supply of goods to the customers and the customers would not think of switching to another organization.
Nevertheless, supply chain management is a critical function that an organization needs to cater in order to run the circle of the organization effectively. If Supply chain is not managed properly, when the circle of organization would not run smoothly and it may lead to the drastic consequences.
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