Analysis of Supply Chain Management

Introduction:

In today’s retail market, the supply chain management has shifted its focus from production efficiency to partnership synchronization among the sellers and the suppliers. According to Jain (2006), a supply chain is a dynamic process and involves the constant flow of information, materials, and funds across multiple functional areas both within and between chain members. In order to meet customer demand on time as well as to maximize profit, the partners in the supply chain have to cooperate with each other. However, managing many different parties involved in the operation is a very complicated challenges where there is no single authority to control all the members. An effective interdependency requires negotiation and real-time cooperation in operation and decision making. Furthermore, there is an increased need of mass customization, quick response, and quality service among the sellers and suppliers which requires a dynamic supply chain with sophisticated cooperation.

For large and complex supply chain, it is very difficult to design, analyze, and re-engineer it using the formal and quantitative approaches. Such existing models, for example, performance evaluation model, is either overly simplified or very qualitatively described and difficult to apply for evaluating the quantitative analysis and the decision process. This article called “Select supplier-related issues in modeling a dynamic supply chain: potential, challenges and direction for future research” by Vipul Jain, S. Wadhwa, and S.G. Deshmukh, reviews the different approaches to identify supplier related issues, such as, supplier selection, supplier-seller relationships, supplier-seller flexibility, and so on. Furthermore, it focuses on diverse modeling techniques, such as agent technology, data mining, and negotiation model that can be applied to support the dynamic supply chain and the future emerging challenges for the companies in this area.

The Issues:

In order to create an effective supply chain with partners, supply chain synchronization is the most important factor to gain competitive advantage. The main objective of the synchronization is to maximize profit for all the involved partners as well as to focus more on the consumer demand. However, there are selective supplier-related issues, such as selection process, shared relationships, flexibility, and so on affect both the suppliers and the buyers.

• Supplier Selection: Usually there is more than one supplier available in the market for any individual item and periodic evaluation is conducted to ensure the quality and standards. In order to develop a long term relationship, many other factors need to be considered and big companies have adopted new concepts to do so. For example, quality management and Just-in-Time are some popular concepts for supplier selection decision by a wide range of retailers.