Supply Chain Management: Factors and Performance Report

This report delves into the intricacies of supply chain management, examining the core concepts and elements that contribute to its effectiveness. The report begins by defining supply chain management as a network encompassing suppliers, manufacturers, and end-users, emphasizing its role in reducing costs and improving efficiency. It highlights the key components of a supply chain, including customer orders, product development, operations, and customer service. Furthermore, the report explores the critical factors that influence supply chain performance, drawing on the works of various scholars. These factors include facilities, which encompass the location, size, and operational methodologies of storage and production areas; inventory, which involves managing raw materials and finished goods to balance availability and cost; transportation, which addresses the movement of goods within the supply chain; and information, which serves as the foundation for decision-making and transaction execution. The report emphasizes the importance of optimizing each of these factors to achieve a robust and efficient supply chain.

Running Head : SUPPLY CHAIN MANAGEMENT
Supply Chain Management
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Author Note

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What is supply chain? And what factors effect supply chain performance?
Supply chain can be referred to as a network between suppliers and a company for producing and
distributing specific product to the end user. This particular network consist of various activities,
entities, information, people and resources too. The supply chain also is a representative of the
steps taken for getting the product or the service from the original state to the buyers. Notably
the supply chains are developed by the organizations in order to reduce the costs and remain
competitive in the specific business landscape. The supply chain management is a critical
process since an optimized supply chain result in reduced costs along with faster production
cycle (Hugos 2018). The elements of supply chain starts with the function of receiving customer
orders, product development, marketing, operations, distribution , finance along with the
customer service. The concept of supply chain management is founded on two of the core ideas.
The first one is that every product should reach the user representing the cumulative effort of
different organizations. These organizations are collectively known as supply chain. Another
idea is based on the management of the functions of supply chain.
According to David M. Kroenke (2012), there are four major factors or the driven that
affect the performance of supply chain such as facilities, transportation, inventory and
information. The facilities are the location, the size and operation methodology of the areas
where the products are assembled, fabricated and stored. The optimal design of the facilities is a
complex subject. It concerns about where a company should locate its warehouse, the size of the
warehouse, what are the items to be stored which are complicated decisions. The inventory on
the other hand, consists of the materials used in the supply chain including the raw materials, and
the finished goods. The companies usually maintain one or more inventories. When one of the
inventories are found less, the company reorders from the distributors and lastly from the

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manufacturers (Monczka et al. 2015). The inventory management needs the balance between
availability and cost. The inventory management can easily increase the availability of the
products having increased the size of the inventory. However, through this the expenses of the
company increases, so does the profitability of the company. The less the inventory size is, the
more the company incurs the oddities and items start becoming unavailable for purchase. When
it happens, the customers switch to other sources. In turn, the revenues of the company can be
reduced through this. Significantly, the inventory management always maintains balance
between cost and availability (Christopher 2016). The transportation is the third important factor
which drives the performance of the supply chain. It concerns the goods movement in a specific
supply chain. There are some organizations which have their own transportation facilities and
there are also some which outsource the transportation. Notably, information is also crucial for
the supply chain performance. It is the foundation of supply chain and helps in executing
transactions and decision making among the managers.

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Reference
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Kroenke, D.M., 2012. Experiencing mis. Pearson Prentice Hall,.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and
supply chain management. Cengage Learning.