Supply Chain Management

What’s the future holds for supply chain management? The future of supply chain management is the future of business management when there will be no business that is not part of a supply chain. The paradigm of business management will soon be converged to the paradigm of supply chain management. To precisely fortune-tell the future of supply chains is meaningless.

But what’s useful is to identify and explore some challenges that we better prepare ourselves for. Three key challenges have been identified and discussed here.

For years, researchers and practitioners have primarily investigated the various processes within manufacturing supply chains individually. Recently, however, there has been increasing attention placed on the performance, design, and analysis of the supply chain as a whole.

This attention is largely a result of the rising costs of manufacturing, the shrinking resources of manufacturing bases, shortened product life cycles, the leveling of the playing field within manufacturing, and the globalization of market economies.

One of the important issues in supply chain management is to design and plan out the overall architecture of the supply chain network and the value-adding flows that go through it. This means that managers should step back and looks at the supply chain as a whole and formulates strategies and processes that maximize the total supply chain value-adding and minimizes the total supply chain costs.

The Need for Agility

Having understood the impact and the indisputable success of the lean philosophy applied in many organizations world over. Can we come to a conclusion that the next milestone, after the craft production and mass production, is going to be the lean production? To answer this question, one needs to first establish whether the lean approach can fit all business environments now and in the future. Researches and literature so far appear to believe the otherwise.

The critical argument here is that the lean system was developed from a forecasting based volume production industrial sector where the market differentiator is reliability and cost, and today a large part of our global market is variety dominated and the differentiator is speed and responsiveness. Hence, lean probably is not a cure-all approach after all.

To date, our world market is dominated mostly by many well established global brands. Over the last three decades, there has been a steady trend of global market convergence – the tendency that indigenous markets start to converge on a set of similar products or services across the world. The end-result of the global market convergence is that companies have succeeded in their products or services now have the whole wide world to embrace for their marketing as well as sourcing.

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