Supply chain management. In order to determine the efficiency of supply chain management and make improvements, some indicators are used to evaluate the processes such as demand planning, distribution planning, production planning, inventory management a

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SUPPLY CHAIN MANAGEMENT

  1. Introduction

As the significance of efficient supply chain operations increase, the companies have to determine their processes integrated with their supply chains. It is critical to run an efficient supply chain, since the supply chain management does not only refer to the management of the relationships among the stakeholders, but also aligns to the success of the company in terms of competitiveness and profitability. However, the present global and competitive environment brings about some requirements for the companies. In order to be involved in the markets and sustain their successes, the companies have to follow some strategies based on the collaboration of the customers, suppliers, retailers and subsidiaries. Therefore, some new arrangements and innovative managements should be made in the supply chain management processes.

The supply chain is the managerial and operational component of the distribution channel comprising the procurement of materials, intermediate and finished goods manufacturing as well as supplying the customers with the products. It needs to be processed not only in the manufacturing industries, but also within services; nevertheless, the routes and the techniques used during the processes vary among the companies depending on the industry and the structure of the environment.

  1. Requirement for Supply Chain Management

The supply chain management consists of managing both the internal and external relationships, which are needed in order to collect the data for the company management, achieve the distribution during the supply chain and receive the money required for profit. Therefore, it is one of the most critical processes during the production of any kind of goods and services as well as their distributions. However, a well-run management of the supply chain inevitably provides the companies with success and thereby, profitability.

For instance, a frozen food manufacturing company can be given as an example. Since the only factor determining the product quality is the quality of the crops, manufacturing the most qualified product by maximizing the profit is only possible with the provision of the crop quality. In order to embody this fact, it is better to describe a more detailed process. As an example, the labor force and thereby the number of employees working on the lines of pre-processing and packaging change according to the quality of the crops, since the low qualified materials require more workforce. Therefore, the unit price becomes higher. Another factor is that the damaged and the defective products absorb water and get wet; which result in the failure during the freezing process. That is to say, the product quality, which is the major determinant of the profitability and competitive advantage, depends on the quality of the crops that is determined during the supply chain operations. Apart from sustaining the quality during the crop delivery, the quality of the crops is significant at the time of collecting them into the boxes. Therefore, the crops should not be damaged during this process. In order to obtain that and keep the crop quality high, the farmers are more likely to keep the crop quality higher and thereby, keep the possibility to get damaged during the delivery lower. That is so, since it is easier for the already bruised and squashed crops to get damaged during delivery and preservation. These all can be managed by supply chain management, which is therefore significant in processes.

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The effectiveness of the supply chain management and the efficiency of the processes relating to the chain activities are the determinants of the success of the companies in terms of profitability and growth.

  1. Supply Chain Management vs. Business Excellence

Supply chain management is the coordination of activities of entities involved in supply of raw materials, production of goods and services, and distribution of products to customers (Ardalan, 2009). A successful supply chain management process requires several elements, which have to be considered during the establishment of the supply chain management policies. The activities within the supply chain ...

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