Supply Chain Management: Swot Analysis; 21th Century Supply Chain

Tuesday, March 12, 2013

Swot Analysis; 21th Century Supply Chain

Swot Analysis; 21th Century Supply Chain

Overview of 21th Century supply Chain

Historically, the term supply chain management is credited to Keith Oliver a consultant at the Booz Allen Hamilton when interviewed by the Financial Times in the early 1980’s. Early before this year global supply chain was more of the traditional model where corporations doing business together did so directly, that is each supplier maintains individual links to each customer or buyer. In the 21th century supply chain has changed to include hugely technology; the Internet, operations, logistics and procurement management.

The 21th century supply chain addresses the bottlenecks in the traditional supply chain systems, which includes; distribution network configuration, distribution strategy, trade-offs, information, inventory management and cash flow. Modern day Supply chain is a cross-functional approach, which captures raw materials management in an organization; aspects of internal processing of materials into finish products (design, forecasting and manufacturing) and the successful movement of finish goods out of the organization to the final consumer. In the 21th century, several models have been proposed for the better understanding of materials movement for example the Global Supply Chain forum have grouped supply chain into strategic, tactical and operational levels.

In 2012, Gartner came out with a top 5 list of well doing companies in terms of supply chain management.

Company 2012

Apple

Amazon

McDonald

Dell

P&G

Coca Cola Company

These companies have certain characteristic and features, which are particular to modern supply chain. These are elaborated in the diagram below:

FIG 2 CRITICAL FEATURES OF MODERN SCM

SWOT ANALYSIS

Strength

· Enhanced Joined Networks, strategic alliances and partnership between giant companies (Example Foxccon and Apple)

· Have enhanced the potential of Lean Manufacturing among companies.

· Introduction of technology and the Internet have speed up global supply chain.

· Security levels in global supply chain is enhanced example the use of RFIDs

· Have aided Just-In –Time practices in organizations are enhanced.

· Global Supply chain in the 21th Century has helped companies to lower their production or call center cost because it has allow to a greater extent outsourcing.

Weaknesses

· Complications in supply chain networks as it handles many different players.

· High employees Turnover

· Greater Competition

· It involves heavy investment of time, money and resources to successfully overlook the supply chain network.

· Although outsourcing can lower operational cost the decision to outsource can lead to backlash from media, and customer.(Nike case in Vietnam)

· Mostly some high level supply chain companies turns to focus too much on the input and output of the system and pay less attention to internal management issues.

· Sometimes there are conflicts among partners especially large supply networks.

· Since it relays heavily on technology and systems a failure of any creates big issues along the supply chain

Network.

Opportunities

· Huge potential with the introduction of new technologies like RFID and Internet of Things

· More Attention is been given to the discipline as it has attracted the attention of the best global companies therefore more research and models are coming up.

· Globalization, IT and outsourcing has made the 21th century supply chain seem to have more bright future

· Growing in online markets and easy international expansion of markets.

· New and Emerging markets

· Increase acquisition synergies