Key Chain
Key Chain
A company that intends to implement Supply Chain Management does not necessarily increase their competitive edge. Often times, companies fail to identify the key business issues that are closely related to the effective implementation of Supply Chain Management. The key business issue often related to the effective implementation of SCM in the business processes are market positioning.
A company decision in market positioning can be consider as one of the most important key business issues to be dealt with. Market positioning relates to the core competencies that they have and how they utilize it to get ahead from other competitors. In order to compete, non core competencies are outsourced in order to give more focus on their core competencies. By stock taking company's internal strengths and weaknesses, a company can benchmark itself with other similar competitors. Through benchmarking, a company can restrategize its internal operation to favour the niche expertise that they have. Through restrategizing also, the company can decides which type of suppliers that they want in their supply chain so that they can position themselves in the correct market segment. According to Martin in his book "Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service", the benchmarking can be set through these priorities as stated below:-
i) Which processes and entities in the supply chain are of strategic importance?
ii) Which processes and entities in the supply chain have a high relative impact on the business?
iii) Where there is a choice between 'make' or 'buy'.
iv) Where there is internal readiness to change.
As an example, in the case of Zara, Spain's most successful apparel companies. Zara's market positioning is in direct competition with fashion giant such as Benetton, The Gap and The Limited. But since, the fashion industry is a time-based competition; Zara therefore has utilized SCM as a tool for competitive advantage by having a much quicker response systems in the industry. Zara operates effectively through two successful objectives, and those are, working without stocks and respond faster to market demands. Zara not only managed to create competitive edge by positioning itself as the fastest apparel companies to deliver its goods to the customers but also as a leader in the fashion industry.
Razamith Sovereign is undergoing his Masters in Engineering Business Management in University of Warwick, United Kingdom. A General Manager in a technology company, he provide useful advice through his articles that he have found very useful in managing his daily operation of the company. To find more information on Supply Chain Management please visit http://supplylogistic.blogspot.com
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