Supply Chain Management – Outsourcing Essay

3780 words - 16 pages

INTRODUCTIONMarket globalization and the rapid expansion of information and communication technology are drastically transforming the new business environment. These changes and advances in technology have created an intolerable situation for everybody involved in management. Managers in all organizations must now seek to achieve maximum competitiveness in performing all business processes. In order to do this, they must constantly evaluate the technology on offer and try to achieve performance improvements with what is usually a less than adequate internal skills base. In these circumstances, the use of full-time external specialists through outsourcing has become an important solution to ...view middle of the document...

Finally, the conclusion gives a brief overview of the discussed strategies and predictions about the future are illustrated.1.SUPPLY CHAIN MANAGEMENT (SCM)1.1 Evolution of SCM conceptSupply chain management (SCM) represents the third phase of an evolution that started in the 1960s with the development of physical distribution or outbound logistics concept that focused on the outbound side of a business logistic system. During 1970s-1980s, the logistics or integrated logistics management concept has been developed in a growing number of organizations. Logistics, in its simplest form, added inbound logistics to the outbound of physical distribution. Also, optimization of internal operations took place. (Langley J., Coyle J., Gibson B., Novack R., Bardi E., 2008)On the early 1990s, SCM has gained considerable support as managers have increasingly recognized the importance of logistics as the last cost-cutting frontier. SCM systems have been developed in recent years to offer more cost-effective solutions for logistics within companies and the chain itself. (M. Tarn, D. Yen, M. Beaumont, 2002) As far as the future is concerned, Stock (2000) concludes that: "…SCM offers such potential in terms of financial and service benefits to organizations and customers that it cannot be ignored … The future of SCM is indeed very bright…"Table 1: The Three Phases of the Supply Chain Management Concept EvolutionPhasePhysical Distribution ManagementLogistics ManagementSupply Chain ManagementDate1960s1970s-80s1980s-90sFocusDistribution of final product or outbound logisticsInbound logistics & optimizing internal operations Integration across organizational boundariesAdded•Inventory•Out-bound transportation•Warehousing•Order processing•Manufacturing•Procurement•In-bound transportation•Management of customer relations•Management of information•External logistics process and suppliesSource: Document of Acquisition Community Connection (ACC)Available from: https://acc.dau.mil1.2 SCM Definition AnalysisSupply chain management can be viewed as a pipeline or conduit for the efficient flow of products/material, services, information and financials from the supplier's suppliers through the various intermediate organizations/companies out to the customer's customer or the system of connected networks between the original vendors and the ultimate final customer (J. Langley, J. Coyle, B. Gibson, R. Novack, E. Bardi, 2008)Figure 1: Supply chainSource:(J. Langley, J. Coyle, B. Gibson, R. Novack, E. Bardi, 2008)Source: J. Langley, J. Coyle, B. Gibson, R. Novack, E. Bardi, 2008 "Managing Supply Chains, a Logistics Approach"Supply chain is an extended undertaking that crosses the boundaries of individual firms to span the related activities of all the companies involved in the total supply chain. This extended undertaking should attempt to execute or implement a coordinated, two way flow of goods/services,...

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