How to create resilient supply chains Essay Example | Topics and Well Written Essays - 2500 words

How to create resilient supply chains - Essay Example The process is also critical in planning of the production and supply process, improvement of relationships with suppliers, event management, international trade logistics, and transportation management (Fawcett, Ellram & Ogden 2007). This management is necessary for any enterprise that aspires to improve efficiency. The outcome of a well-managed is the difference between the success and the failure of the enterprise. Creation of a resilient chain is, therefore, an important part in the success of a business entity. Objectives of a supply chain management system An example of a supply chain is a manufacturing chain, which involves the procurement of raw materials, transformation of these raw materials into finished goods, and then transportation to distribution centers, and eventually to consumers. According to Beckmann (2003) the primary objective of the process is to maximize the general value generated. This value is the difference between effort expended in satisfying the custome r’s request and the final products worth to the consumer. These chains are strongly connected with the profitability, which is the margin between the proceeds generated from the consumer and the general cost across the chain. This system is, therefore, aimed at reducing costs related to customer satisfaction (Mentzer et al. 2001). Effective management of the process can results can also reduce the risks associated with breakdowns in the chain. Management also ensures that resources are used elsewhere. Through the reduction in costs, it is possible to transfer the resources that are saved to other productive activities. The management is also influential in the enhancement of management operations (Tan 2001). A steady chain implies more efficient operations which improves the overall productivity and profitability of the business. A properly managed chain also facilitates delivery of quality products over a smaller period (Cohen & Roussel 2005). Issues that affect the supply c hain process A major issue that affects the supply chain is strategy alignment. It is crucial that the business strategy must be in line with the supply strategy in order to attain its desired results (Chen & Paulraj 2004). However, where these strategies are not aligned, there is a higher risk of breakdown in the chain. If the strategy does not work in synchrony with the business strategy, it becomes difficult to properly coordinate the entire process (Arend & Wisner 2005). A poor strategy can also undermine the effectiveness of the supply process. A good strategy must focus on both customer satisfaction and effectiveness, and where these objectives are not met the supply process cannot be effective (Gunasekaran & Ngai 2005). Strategic alliances are particularly essential for the flow of materials, information or money in the supply chain and it needs to be even. This can be achieved through proper communication with strategic alliances (Storey et al 2006). Supply chain risks Busin ess risks can be externally driven such as customers, competitors, regulations or internally driven risks that include processing and operations. Risks can also be decision-driven such as erroneous or insufficient decision support (Stadtler 2008). In assessing risks, that affect supply chains, it is imperative to categorize these risks according to risk sources,