Managing the Supply Chain:

Managing the supply chain is a competitive necessity in todays global market place where
differentiation between products and services means providing a total value package that
can compete for an increasingly discerning and empowered customer.
For those who do not grasp the importance of strategizing and managing the supply chain,
the likelihood is they will increasingly feel the effects of market turbulence, where reactive
alignment to the market place clock of opportunity, or catching up with the competition can
have many costs.
Todays view is one of the integration. Supply chain Management is the integrated
management of business links, of information flows and of people. Attention is given to the
whole chain from raw material supply, manufacture, assembly, and distribution to the end
customer. The supply chain is viewed as a logistics channel, a thread which not only
provides the means of getting goods, services and information to the customer, but also
continually strives to do so in the most efficient and innovative way.
For managing the supply chain, supply chain manager make a strategic plans regarding
various supply chain activities. Each activity need different strategic approach to improve its
performance. So it is the responsibility of the supply chain manager to understand the role
of various activities and their impact on firm performance and develop a plan accordingly.

Roles of SCM and their Managerial Implications:

Managing the supply chain involves various kinds of roles that have managerial implication
over the SCM process and management. These roles are very crucial to be succeeded in
the process of SCM because they impose certain liabilities to be cleared. These roles are:
1.
2.
3.
4.
5.
6.
7.
8.

Role of Research and development in SCM

Role of forecasting and aggregate planning in SCM
Role of customer service in SCM
Role of Purchasing in SCM
Role of production in SCM
Role of output in SCM
Role of marketing in SCM
Role of sales in SCM

9. Role of Finance in SCM

10. Role of logistics in SCM
11. Inter functional coordination in SCM
12. Inter corporate coordination in SCM
13. Role of information systems in SCM
14. Role of performance management in SCM
15. Role of Global environment in SCM

Role of Research and Development in SCM:

1. supply chain activities have a major impact on the capabilities and profitability of the
supply chain and its member firms in new product development
2. Innovative and effective new product is important in the turbulent, highly uncertain
business environment of the future.
3. Speed to market or reducing the cycle time to develop new products can be
improved significantly through supply chain R&D involvement.
Managerial Conclusion:
Broadening the knowledge base involved in a firms R&D process better enables
managers to design and develop effective and efficient new product development
systems. This suggests that developing a supply chain orientation for R&D leads to
opportunities for lower costs, improved customer value, and competitive advantage
for the long term.

Role of Forecasting and Aggregate Planning in SCM:

1. Supply chain sales forecasting management can significantly influence operating
performance within each member and across members of a supply chain.
2. The four dimensions of sales forecasting management i.e, functional integration,
approach, systems and performance measurement can be extended to incorporate a
supply chain orientation.
3. Aggregate planning is a process by which a company determines levels of capacity,
production, sub contracting, inventory, stock outs and even pricing over a specified
time horizon.
4. Aggregate planning as the name suggests solves problems involving aggregate
decisions rather than SKU(stock keeping unit) level decisions.

Managerial Conclusion:
In order to contribute to improved supply chain performance, supply chain managers
must go beyond traditional measures of forecast accuracy to understand the overall
supply chain demand planning process and influence the behaviors of individuals
and organizations involved in the development and application of sales forecasts.

Role of Customer service in SCM

1. To achieve supply chain objectives, customer service activities must be strategic in
nature and must be designed based on an understanding of the service levels
important to critical customers.
2. Important customer segments must be identified and the requirements of those
segments for both immediate and downstream customers.
3. It is important to measure customer service outcomes as perceived by the customer
and understand which performance outcomes are most valued by customers at
various levels of the supply chain.
4. Creating value for customers superior to that created by competition is expected to
result in greater customer satisfaction and competitive advantage and influence
customers to behave in ways that improve the performance of the supply chain as a
whole.
Managerial Conclusion:
Customer service is often cited as a key objective of supply chain management.
However, only if service offerings create value for customers will they lead to
behaviors that improve supply chain performance.

Role of Purchasing in SCM:

1. In order to achieve the potential benefits of SCM, the role of purchasing must be
viewed in a system wide context, and must be focused beyond managing the buyer
seller relationship
2. It is important for managers to understand the potential benefits, as well as the costs,
of developing such relationships so that appropriate business decisions can be made
3. Cost and Quality improvements must be understood and implemented from a system
wide perspective to achieve optimum results.

Managerial Conclusion:
To date, researchers and managers alike have primarily on supplier partnerships or
building stronger relationships between the buyer and seller firms.

Role of Production in SCM:

1. Functional products in stable markets need a supply chain production system that
focuses on reducing volume cost and increasing production efficiency.
2. Highly innovative products in uncertain, constantly changing environments need a
supply chain production system that focuses on strategic flexibility and speed to
market.
3. Dispersed production is a supply chain production system of great value in a globally
competitive market that focuses on cost efficiency.
Managerial Conclusion:
Understanding the different types of production systems better enables managers to
design and develop the production system that is most suitable for the specific
supply chain market environment.

Role of Output in SCM:

1. The objective of SCM is to increase the competitive advantage of the supply chain
as a whole rather than to increase the advantage of any single firm.
2. The means to accomplish competitive advantage is through creating value for
downstream customers greater than that offered by competitors.
3. Customer value is created through collaboration and cooperation to improve
efficiency or market effectiveness in ways that are most valuable to key customers.
4. Value is not inherent in products or services, but rather is perceived or experienced
by the customer.
Managerial Conclusion:
The degree to which value is created for customers, and the customers perception of
the value received relative to that offered by the competition, are reflected in the
customers satisfaction with the offering.