2.2 Supply chain
A supply chain is a system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to customer (Table 1). Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer 2010, p.191).
According, in the design and structure of supply chains, companies must achieve strategic fit to align goals (balance) between its supply chain strategy and its competitive strategy and satisfy customer needs. It is necessary that the establishment of the supply chain.
Firstly, companies must understand the needs of customer, understand the uncertainly of the supply chain, and identify the implied uncertainty. Secondly, companies need understand the supply chain’s capabilities in terms of efficiency and responsiveness. Finally, these are ensuring that supply chain responsiveness is consistent with customer needs, supply capabilities, and the resulting implied uncertainty.
2.3 The relationship of core competency and supply chain
While expanding market, the demand is larger. Companies must do more to invest in human recourse and technology to meet market and customer needs. In order to satisfy customer needs, enterprises need to adapt to market changes in addition to investing in technology. Companies use scientific method to predict the uncertain demand. And to exploit information technology and electronic commerce to reduce business costs and rise profits.
Kraff and Mantrala (2008, p. 378) presented that the extent of information sharing of the is important for decreasing the bullwhip effect improve the operation efficiency. Base on effective human resources management plan out the design with the effect of the supply chain. Because of the market demand, the company must also make corresponding policies for facilities, inventory, and pricing to adapt to market changes which will greatly enhance the core competitiveness of enterprises. Through information sharing improve supply chain in all aspects, such as production, inventory, and marketing and so on.
However, supply chain of existence is to enhance and develop the core competitiveness of enterprises.
Nowadays, technological progress and demand diversity makes product life cycles shorten, companies faced with shorter delivery time, reduce costs and improve service pressure. Traditional production and business model can no longer respond quickly to market demands and maintain competitive advantage. Enterprises in order to maximize their own advantage to obtain specific performance, management focus must be turned to core competencies focus scale of enterprise. According to Sarkis (2006, p. 9), supply chain design is essentially a rational and efficient allocation of corporate and purchasing resources to meet external and external environment. Companies must aware of the internal and external environments affecting the firms.
At the same time, the competencies of the non-core part through outsourcing to obtain the appropriate resources (Ye & Ye 2005, p.286). Due to outsourcing, the influence of the supply chain cost control, companies can reduce unnecessary cost, such as product manufacture, inventory, and transportation and so on. Outsourcing non-core part will improve customer service levels, enabling increased efficiency and responsiveness.
Because of this, enterprises of all relevant stakeholders from supplier to customer to effectively link the network to obtain a business management major source of competitive advantage.
In today's increasingly competitive environment, enterprises in order to maintain existing market share and achieved rapid development. Through long-term cooperation with suppliers, manufacturers, distribution, retailers and customer, and to establish a friendly relationship is essential.
Supply chain and core competencies of enterprises are closely linked. However, supply chain management was part of core competence elements. It focuses on the core competencies of enterprises, and to stress companies’ own characteristics. So that companies can more effectively achieve the ultimate customer value, to improve enterprises’ core competencies. As a result, enterprise is through integration and coordination of technical harmonization which manages manufacturing resources of all the suppliers that is one of the most important core competencies.
However, in the core competencies of different companies may be different. Their core competencies may include market share, profitability, technology leadership, self-ownership product, technical innovation, customer stability, and so on. And for business, in its different stages of development, core competencies may also be constantly changing. L. Fisher (1994, p. 83) claimed that the design of supply chain must be a center with product design. In reality, a fast and effective supply chain design method is a very important significance.
Supply chain processes
Core competency can promote the improvement of supply chain processes and increase sales revenue
Supply chain processes directly determine the products from the factory to the final consumer of the whole process. The level of supply chain performance decides that product reach the final customer in the cost, which largely affect the product sales. For example, if the supplier's supply chain inefficiencies, so the cost of distribution companies must be higher than competitors. In order to get the same profits with competitors, then the product in the final price will be higher than competitors. Once consumer purchase cheaper goods from competitors, it will inevitably reduce the company's sales revenue.
However, the cost of supply chain services not only impact sales of the product level, but also direct impact on corporate profitability, sales volume and service levels. The higher cost of supply chain services, the company's profitability lower. In contrast, increasing corporate profits not only need to pay attention to the supply chain cost savings, but also concern about the responsive supply chain. If the excessive pursuits of efficient supply chain to reduce the cost blindly, then the effect will inevitably weaken the responsive supply chain.
Many businesses cut down the cost frequently, while orders for delivery of the correct rate and accuracy rate decrease as result of customer satisfaction reduce. In fact, the supply chain efficiency and responsiveness is a pair of hard to balance the contradictions. In practice, companies must be considered the variations in the ratio of improvement the supply chain service levels to corresponding sales increase. It needs to use the scientific method of quantitative analysis to enable enterprises to maximize the overall benefits.
Supply Chain strategy
Affect the performance of supply chain for many reasons, according to consulting firm to study the report: a major cause of affecting the supply chain performance is that most companies have supply chain program, but no formal supply chain management strategy (Zhang 2002, p. 24).
The ultimate core competency of an organization is “supply chain design,” which I define as choosing what capabilities along the value chain to invest in and develop internally and which to allocate for development by suppliers.
Supply chain management is not only on the effective use of various resources within the enterprise, but also pay attention to internal conditions and external environment combined.
Core competencies are defined in many ways, but internal capabilities can be considered core when they confer a competitive advantage or are otherwise essential for achieving your company’s strategic objectives.
The following are the core competencies of enterprise affect the design and structure of supply chains of some factors.
Technological innovation is a driving force for enterprise development. It can enhance the competencies of enterprises. For instance, IBM ranked first in volume of patent applications for consecutive eight years in the US (Shi 2004, p. 286).
In consequence for an enterprise, research and development investment reflect one side of technological innovation.
Supply chain management strategies include the following:
Reform of the corporate management thinking times cultivating core competitiveness;
Effective human resource management;
With suppliers, distributors to establish a strategic, long-term and stable partnership;
sharing of information, supply chain management, supply chain advantage to companies of all nodes to share information and improve information exchange through various supply chain can only, and adjusting production, inventory, sales and other structures;
To establish a good supply chain management system and performance measurement mechanisms.
determines the nature of material procurement, transportation of materials, manufacture of product or creation of service, distribution of product
Consistency and support between supply chain strategy, competitive strategy, and other functional strategies is important
Increase productivity and reduce total cost of inventory to reduce
Conclusion
to establish a good supply chain strategy
References
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Shi, JX 2004, Strategic planning: Case of Chinese Transnational Corporation Strategies program theory, Publisher Machinery Industry Press, Source: University of California, pp. 286.
, H 2010, The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management, John Wiley and Sons, pp. 191.
Chen, IJ & Paulraj, A 2004, Towards a theory of supply chain management: the constructs and measurements. Journal of Operations Management, 22/2: 119-150.
Markides, CC & Williamson, PJ 1994, Resources, firms, and strategies: a reader in the resource-based perspective, 22 - , Oxford University Press, 1997. pp. 327.
Zhang, CH 2002, Supply chain management techniques and methods, Publisher Tsinghua University Press, pp. 24.
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Sarkis, J 2006, Greening the supply chian, Springer press, pp. 9
Kraff, M & Mantrala, MK 2008, Retailing in the 21st Century: Current and Future Trends, Springer press, pp. 378.
Table of tables
Table of figures
Table 1
An illustration of a company's supply chain; the arrows stand for supplier-relationship management, internal SCM and customer-relationship management (Chen and Paulraj, 2004)
Table 2
