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Supply Chain Management

Different complexity in supply chain management

Introduction to Supply Chain Management

Supply chain is considered to be a sequence of an organization's, facilities, functions and activities that are significantly involved in manufacturing and delivering different products or services. Supply chain management is referred to the activities through which the companies can maximize customer value and can also achieve sustainable competitive advantage. This unit is going to explain some considerations which are taken for creating an effective supply chain for a Middle Eastern company namely Al-Tuwairqi Holding which deals in manufacturing of steel. Furthermore, it also represents the challenges might the company face in terms of complexity in supply chain management.

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1. Considerations in creating an effective supply chain for a Middle Eastern company

The major role of manufacturing unit is to create an effective supply chain management so that to make effective delivery of products to the customers. However, the role of supply chain management is crucial in each and every industry whether it is a trading industry, industrial sector, banks or an e- commerce business but they have much different supply chain. Al-Tuwairqi Holding is a leading business entity of Saudi Arabia and the company offers direct reduced iron; steel products along with billets, wire rods, reinforcement steel bars, reinforcement bars, wire meshes, etc.

In respect to the cited company, Supply chain management has been an encountered phrase these days, as managers of Al-Tuwairqi Holding strive to improve factory performance. The major consideration of an organization must be towards a concurrent effort which is used to manage the each and every aspect of operational activities starting raw material acquiescent to delivery products to customers. In order to create an effective supply chain Al-Tuwairqi Holding considered following things:

Strategic objectives and tactics

The cited company focuses on designing objectives to attain the success of the company as it is vital to have targets for attaining future goals. Effective supply of goods and services is the major objective of business entity that is to be considered while developing effective supply chain management.

Integrate and coordinate activities in the internal portion of the supply chain

Throughout the process of supply, there must be effective integration and coordination between the activities. There must be effective flow of information among the partner who are involved in different supply chain management activities.

Coordinate activities with suppliers and customers

Coordination among suppliers and customers is the major concerned area of an organization that must be taken into consideration at the time of completing supply chain management activities. The suppliers are to be kept informed for requirements of raw material and the customers should be communicated with available product with company that can satisfy their needs.

Furthermore, the mentioned company must consider procurement activities for the purpose of effective supply chain management. Being a manufacturing company, Al-Tuwairqi Holding has to access the location which is the most suitable for procuring activities. In addition to that client's demand is the major aspect that is required to be focused on for creating effective supply chain. This is vital the cited company must be static on raw materials and other finished goods. Al-Tuwairqi Holding need to focus on Product Life cycle Management for which the demand and supply of product depends. At last the entity has to focus on forecasting, planning and managing the each and every activity of supply chain management.

2. Challenges might the company face in terms of complexity

Within a manufacturing company like as Al-Tuwairqi Holding, supply chain management has a great deal of responsibility to ensure that activities best suits the needs of the organization. The most crucial responsibility of management is of assessing the suppliers, how many suppliers are required, storage and warehousing facilities, distribution channels, etc. For the mentioned company, supply chain activities include all the functions such as product development, sourcing, production, and logistics, information systems and the interrelation among them. However, business entity might face some challenges in regard to effective management of supply chain activities. The most important risk associated with the supply chain management is of maintaining supplier quality and performance in the operations of business. For the cited company, quality of product is the key concern, therefore, it is to be considered during the supply chain management. In addition, the risk related to supply chain also lead to increase the cost of production that further turn into increased prices.

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The mentioned entity also focuses on reducing inventory and transportation costs. In present era, the growth of e- commence is witnessed and number of customers want to have quality products so the business entity has to maintain quality of products. The unrealistic assumption of demand and supply can also be the challenge of manufacturing unit for maintaining effective flow. In lack of advanced technology, the business will not able to manages the supply chain activities however, the implementation of technology continue to create the cost of the businesses. Hence, the needs to understand the entire picture of the information technology to determine how best to use it to suit the needs of the organization and make the supply chain more efficient (Supply Chain and Manufacturing Operations Consulting, 2016). However, Al-Tuwairqi Holding wants to develop supply chain that will depend on the industry and the operations of organization. The culture of organization can become a major challenge for business in managing internal and external strategies pertaining to supply chain management. The stakeholders of business who are associated with the supply chain activities need to be communicated effectively so that there must not be any problem in managing supply chain.

Conclusion

From the above report, it can be concluded that different companies have their different supply chain activities that depends on their businesses types. It can be said organization must put efforts towards managing each and every aspect of operational activities hence, it should consider proper integrate and coordinate activities with suppliers and customers in of the supply chain. Maintaining supplier quality and performance, increased cost etc. are the challenges associated with Al-Tuwairqi Holding's supply chain management.

References

  • Barney, J.B. (2012). Purchasing, supply chain management and sustained competitive advantage: The relevance of resource‐based theory.Journal of Supply Chain Management.
  • Carter, C.R. & Liane Easton, P. (2011). Sustainable supply chain management: evolution and future directions.International journal of physical distribution & logistics management.
  • Fawcett, S.E., Ellram, L.M. & Ogden, J.A. (2014).Supply chain management: from vision to implementation. London: Pearson.
  • Hugos, M.H. (2011).Essentials of supply chain management(Vol. 62). John Wiley & Sons.
  • Seuring, S., (2013). A review of modeling approaches for sustainable supply chain management.Decision support systems.
 

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