Supply Chain Management-A strategic tool?

Leading  manufacturing and retail organizations have realized that a well run supply chain can give then a competitive advantage against their rivals. The rest of the organizations having realized this have embarked on auditing and tweaking their supply chains in  order to stay relevant.

The greatest danger that they face is Instead of re-thinking supply chain end to end they tweak which many at times is myopic by default as we will see later on.

Many of these organizations within the supply chain with the best intentions experiment with incoherent efforts to improve sustainability only to encounter a long queue of unexpected consequences, often in the form of financial, social and/or environmental cost.

The reason for this is because most companies respond reactively and in piece meal to pressures from stakeholders such as customers,shareholders,government etc.

For example due to pressure, an organization may demand that its suppliers change materials to environmentally friendly ones or move manufacturing closer to end markets to reduce emissions from transportation and tweak their operations by using florescent lamps,recycle materials etc. This unfortunately is called substitution.

Such organizations would rather take a strategic/ holistic approach to sustainability and make broader structural changes such as re-inventing processes,developing new relationship with business partners and even collaborating with competitors to achieve scale (Hau.L.Lee Havard Business Review 2011).

Top management in charge of supply chain need therefore to consider supply chain as a competitive tool and must tackle it as aggressively as they do cost,quality,speed and dependability.