Answer to Question #208019 in Management for Pearl

Question

(A) the concept of supplier quality is regarded as an important enabler to organisations’ supply chain efficiency. This is due to its strategic role in ensuring a seamless and continuous flow of quality supplies across a supply chain network. In light of the aforesaid assertion, you are expected to practically demonstrate how your company will manage its supplier quality engagement using the following principles of total quality management (TQM); to ensure that you obtain the best quality supplies and expertise that will enable the organisation to meet and exceed your customers’ expectations (25 marks):

• Stress objective rather than subjective analysis (5 marks)

Answer 1

SCM has been defined to identify the strategic character of trading partner coordination and explain the twin objective of SCM: to improve the performance of an individual business and the overall supply chain performance. SCM aims to seamlessly integrate both information and material flow across the supply chain as a competitive weapon. Academics, consultants, and company managers are all paying more attention to the concept of SCM. Many companies have realised that SCM is the key to gaining a lasting competitive advantage for their products and/or services in an increasingly congested environment.

In several bodies of literature, such as purchasing and supply management, logistics and transportation, operations management, marketing, organisational theory, and management information systems, the notion of SCM has been examined from various perspectives. Various theories, including industrial organisation and associated transaction cost analysis, resource-based and resource-dependency theory, competitive strategy, and social-political perspective, have provided insights into various features or views of SCM.

Purchasing and supply management and transportation and logistics management have both been incorporated in the notion of SCM. According to purchasing and supply management, SCM is synonymous with integrating a supply base that originated from traditional purchasing and materials functions. SCM is associated with integrated logistics systems in transportation and logistics management and hence focuses on inventory reduction both within and between enterprises in the supply chain. These two viewpoints eventually coalesced into an integrated SCM that encompasses all activities across the whole supply chain.

The organizational performance will be influenced by SCM practises both directly and indirectly through competitive advantage. SCM can be thought of as a five-dimensional construct. Strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and postponement are the five dimensions.

SCM practises are described as a series of activities carried out by a company to support effective supply chain management. Supplier collaboration, outsourcing, cycle time compression, continuous process flow, and information technology exchange are examples of the most recent advancement of SCM methods. Other researchers concentrate on core skills, utilisation of inter-organizational systems such as EDI, and removal of surplus inventory levels by deferring customization until the end of the supply chain in their list of SCM techniques. Through factor analysis, they were able to identify six dimensions of SCM practice: supply chain integration, information exchange, supply chain characteristics, customer service management, geographical closeness, and JIT capabilities. To measure buyer-supplier relationships, look at supplier base reduction, long-term partnerships, communication, cross-functional teams, and supplier involvement.

SCM is approached from a variety of angles, with the ultimate goal of increasing organisational performance. Five separate variables, including strategic supplier alliance, customer relationship, level of information sharing, quality of information sharing, and postponement, were reviewed and consolidated.

The five components address the supply chain's upstream (strategic supplier partnerships) and downstream (customer relationships) sides, as well as information flow (amount and quality of information exchange) and internal supply chain processes (postponement). It should be noted that, while the above dimensions represent the most important components of SCM practice, they are not exhaustive. Other elements that have been found include geographical proximity, JIT/lean capability, cross-functional teams, logistical integration, agreed vision and goals, and agreed supply chain leadership. These factors are of great interest; they are not included due to concerns regarding the length of the survey and the parsimony of measurement instruments.

SCM is a multi-dimensional concept in practice. The long-term relationship between the business and its suppliers is defined as a strategic supplier partnership. It aims to assist participating firms in generating significant long-term benefits by leveraging their strategic and operational skills. A strategic partnership promotes reciprocal planning and problem-solving efforts by emphasising direct, long-term association. These strategic alliances are formed to provide mutual benefits and continued engagement in one or more key strategic sectors, such as technology, goods, and markets.

Organizations can operate more effectively with a few key suppliers ready to share responsibility for the goods' success by forming strategic alliances with them. Suppliers who participate early in the product design process can provide more cost-effective design options, assist in selecting the best components and technologies, and assist in design evaluation. Organizations that are strategically aligned can collaborate closely and save time and effort. A strong supplier relationship can be a key component of a cutting-edge supply chain.

Customer relationship: This word refers to the full set of procedures used to handle customer complaints, develop long-term relationships with customers, and improve customer satisfaction. Customer relationship management is regarded as a critical component of SCM methods. Because of their intrinsic hurdles to competition, committed partnerships are the best sustainable advantage, as previously stated. The rise of mass customisation and customised service has ushered in a new era in which customer relationship management has become critical to a company's existence.

For successful SCM programmes, good connections with supply chain members, especially customers, are required. Close client relationships enable a company to set itself apart from its competitors, maintain customer loyalty, and significantly increase the value it gives to its customers.

Level of information sharing: There are two sides to information sharing: quantity and quality. Both components are critical to SCM procedures and have been viewed as separate entities. The amount to which vital and private information is provided to one's supply chain partner is referred to as the level (quantity aspect) of information sharing. Shared information can range from strategic to tactical in nature and from logistics-related information to market and customer data. Making undistorted and up-to-date marketing data available at every node in the supply chain is critical to achieving a smooth supply chain. Information about the supply chain can be leveraged to gain a competitive edge. It believes information exchange to be one of the five-building elements of a strong supply chain relationship.

While information sharing is crucial, the influence on SCM is determined by the type of information shared, when and how it is shared, and with whom it is shared. The quality of information is influenced by supply chain participants' differing goals and opportunistic behaviour, and informational asymmetries across the supply chain. It's been proposed that businesses will purposefully misrepresent information that could reach their competitors and their own suppliers and customers. Because information disclosure is viewed as a loss of authority, it appears that there is a built-in aversion within businesses to give out more than basic information. Given these biases, assuring the quality of shared data becomes a vital component of effective SCM. Organizations must regard their data as a strategic asset and ensure that it flows with the least amount of delay and distortion possible.

The technique of deferring one or more operations or activities (manufacturing, sourcing, and delivering) to a later point in the supply chain is known as the postponement. (1) choosing how many steps to postpone and (2) determining which actions to postpone are the two most important factors to consider while establishing a postponement plan.

Postponement helps a company be more flexible in developing alternative versions of a product to satisfy changing customer wants and differentiate a product or change the demand function. Keeping materials undifferentiated for as long as feasible improves a company's ability to respond to changes in client demand. Keeping undifferentiated stocks can also help a company save money in the supply chain. The postponement must be tailored to the type of product, the company's market demands, and the structure or limits of the manufacturing and logistics system. In general, postponement may be appropriate in the following situations: innovative products; products with high monetary density, high specialisation, and a broad range; markets with long delivery times, low delivery frequency, and high demand uncertainty; and manufacturing or logistics systems with small economies of scale and no need for specialised knowledge.

Short-term SCM goals include increasing productivity and decreasing inventory and cycle time, while long-term goals include increasing market share and profits for all supply chain participants. Financial indicators have long been used to compare firms and evaluate their performance over time. Any organisational activity, including supply chain management, should improve organisational performance in the long run. Return on investment (ROI), market share, the profit margin on sales, the growth of ROI, market share growth, and overall competitive position.