The Hidden Potential of Supply Chain and Logistics in an Organization

What if an organization does not have supply chain management (SCM) or fail to operate SCM correctly, can the organization sustain longer? The answer is NO. While every organization try hard up and down to improve their performance, SCM is playing an important role among the organization which can lead them to better outcome. It is undeniable that a well operate SCM can bring many advantages for example reducing inventory cost, provide sufficient manufacturing strategies, improve process integration, especially increase profit and improve competitive advantages. Many people have misunderstanding between Supply chain and Logistics because they are interchangeably but the meaning are absolutely different. Accordingly, Harland (1996) have clearly stated that supply chain refers to a network created among different company by producing, holding, and distributing a particular product while Supply Chain Management (SCM) is management of flow of good and service to end customers.Supply chain is the network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer. Logistics refers to in the right way, the right product in the right quantity and right quality, in the right place at the right time, for the right customer at the right cost. There is only one ‘right’ and cost-effective way to group or segment customers: according to their dominant buying preferences and behaviours. Supply chain configurations that lack a dynamic capability to ‘flex’ between different delivery service propositions will inevitably lead to service failures and reduced operational and financial performance. Once the organization clearly understand those concepts and handle it wisely, the organization are able to improve their performance in all fields.

Why is Supply Chain important in an organization

How can supply chain help the organization improve sale for profitability and gain competitive advantage. According to John Mangan, there are some factor that organization need to consider in order to help manager develop their supply chain strategies to best fit in this competitive world. Those factors that he suggested are Living supply chain, Focus on processes and flows, Focus on high-level objectives, the importance of people, and It’s supply chain that compete which very useful for organization nowadays to face different problem. In the complex and competitive world, “living supply chain” can be used together with a process called “dynamic alignment” to meet the different customer needs and desires with different supply chain strategies. An organization differentiate themselves differently to achieve competitive advantage in order to survive and thrive in competitive market environment. Some company giving away the advantage