Integrative Mission of Supply Chain (E)
What is the role of Supply Chain within the company? What is the best way to close the gap between Marketing and Production?
Posted: May 2009
It is obvious that the mission of supply chain is to plan and co-ordinate all those activities necessary to achieve desired levels of delivered service and quality at lowest possible cost, in order to protect the sustainable competitive advantage. Supply Chain must therefore be seen as the link between the marketplace and the supply base. The Supply Chain spans the organization, from the management of raw materials through to the delivery of the final product.
Supply Chain Management provides that the needs of customers are satisfied through the co-ordination of the materials and information flows that extend from the marketplace, through the firm and its operations and beyond that to suppliers. To achieve this company-wide integration requires a quite different orientation than that typically encountered in the conventional organization.
For example, for many years marketing and production have been seen as separate activities within the organization. At best they have coexisted, at worst there has been the conflict of interests. Production priorities and objectives have typically been focused on operating efficiency, achieved through long production runs, minimized set-ups and change-overs and product standardization. On the other hand, marketing has sought to achieve competitive advantage through variety, high service levels and frequent product changes.
In today's more turbulent environment it is impossible that production and marketing act independently of each other. The conflicting interests of production and marketing are clearly counter-productive to the achievement of overall corporate goals.
This is the reason why both marketing and production have become the focus of business attention. Marketing as a concept of customer orientation now enjoys a wide acceptance. It is now generally accepted that the need to understand and meet customer requirements is a prerequisite for survival. At the same time, in the search for improved cost competitiveness, manufacturing management has been the subject of a significant changes. The recent years has shown the introduction of flexible manufacturing systems, of new approaches to inventory based on materials requirements planning and just-in-time concept and sustained emphasis on total quality management.
Also it has been recognized that the procurement plays a crucial role in creating and sustaining competitive advantage as part of an integrated logistics process. Leading organizations now routinely include supply-side issues in the development of their strategic plans.
It is not only that the cost of purchased materials and supplies a significant part of total costs in most organizations, but there is a major opportunity for leveraging the capabilities and competencies of suppliers through closer integration of customer-supplier process.
As an conclusion, the supply chain management is crucial for integrative concept that seeks to develop a wide view of the firm. It is fundamentally a supply chain planning concept that seeks to create a framework through which the needs of the marketplace can be transferred into a production strategy and plan. In return it links into the strategy for procurement.
As best solution there should be an integrated business plan which for marketing, distribution, production and procurement. This is the role of the Supply Chain.