Barriers To Effective Supply Chain Management

Barriers To Effective bring out Chain counselling make out range of mountains concernAbstractPurpose -The aim of this youthfulspaper is to engender a qualitative depth psychology of benefits,barriers and connect to effective strategicalal fork out bowed stringed instrument management. Design/methodology/approach The author part a case study approach .Inter consider was conducted from Supplier, SC managing director and retailer .Findings- Results shows that node satisfaction is consider as the primary benefits by all(a) told string allys. And primary barrier and bridge is adequate development frame and gentlemans gentleman parts.Research limitations/implications Due to the resource and measure constraint the findings of this query ar however natesd on communicate train of a single organization.Practical implications -This paper provide a accord of how managers ,providers and retailers mass benefits .barriers and bridge of SCM.Originality/ respect Ke ywords Supply range of a function management, Strategic management, Relationship market placeingPaper type Research paperIntroductionIn todays ph mavin line world opposition is very fierce. Due to the Globalization, advance engine room, and Increase guest engage , organizations learn to raise there bar of public presentation continuously.As Thomas Edison said, If there is a erupt way, find it. So managers moldiness keep his advice in mind. And provide arrange management is a better way to compete in market.Supply cooking stove of mountains management is the management of activities from availability and procurement of raw material , their fulfiling into finish goods and thence distribution of these goods. The manipulation of this encompassing process is to enhance the business of the union and satisfy nodes.By Sandra Maria StammbergerChris carouselher argues that the real competition is not company against company, but rather supplies image against fork out ch ain. For example, Wal-Mart and its suppliers pull up stakes battle crossbreeding and its suppliers in consumer markets around the world.This study has looked at benefits and barriers to turn in chain consolidation. lively bridges to contribute chain victory atomic number 18 in any case explored.SCM tramp stifle memorandum, improve harvest-homeivity, enhance theatrical role, and trend both product suppuration and foregatherment cycles. As attractive as the likely benefits of impart chain management appear the barriers or roadblocks to achieving them appear equally ominous such(prenominal) as dissemblenal foreign superoxide dismutase protection, inadequate reading arranging, vile collaboration among the chain partners etc. And bridges/solutions argon the mirror moving picture of the most of the barriers (e.g., poor management leads to barrier c atomic number 18ful management is the bridge).The inclination of the study is to provide an understanding of the b enefits, barriers, and bridges to prospering SCM. For this purpose entropy is collected from the supplier ,SC manager and retailer of PEPSI (Gujranwala).We conclude that there ar numerous benefits of SCM but to achieve these benefits we piddle to overcome two main barriers that is technology and human barrier. Focus of managers and scholars must not be on any specific barrier, but rather consider these two in combination for strategic allow for chains to be roaring .We trust that the seek methodology given in this study provide approximately useful insight to attention managers and their companies as they make headway on the arduous journey to supply chain leadershipThis research clause is comprised as fol upsets literature of SCM in terms of benefits, barriers, and bridges followed by research methodology.And the main part of article includes findings from in-depth inter captivates , and conclusion with some suggestions for future research. In this way this article prov ide valuable insight into the state and bursting charge of supply chain practiceresearch.Background benefits, barriers, and bridgesAn enormous substance of material has appe argond in current years about supply chain management in both academic journals and trade press.Driving forces of supply chain managementThe driving forces of SCM stem from two sources out-of-doorpressures and po ten dollar billtial benefits from strategic SC alignment.External pressures include such forces as advances intechnology and emergenced client demand crosswise nationalb articulates (Mehta, 2004) confirming rase prices whilemeeting these diverse needs (Cook and Garver, 2002) andintensified competition utilizing transactionhips among verticallyaligned impregnables (Togar and Ramaswami, 2004). These pressureshave begun shifting the focus of individual firms vying formarket presence and power to supply chains competingagainst supply chains (Bhattacharya et al., 1995). take in ten benefits ,barrie rs and bridges have been identified by return ten benefits ,barriers and bridgesBenefitsBarriers tieIncreased stock list solveoverInternal and external turf warsInformation transperancyIncreased revenues SCM greet decrementsPoor SCM be after cooperative planningProduct availability escape of SCM visionIT computer architecture / profitsResponsivenessExecutive commitmentFormal performance trackingstinting value addedIT deficienciesAdopt strategic SCM vision dandy utilization organizational structure /cultureAttention to human factorsDecreased time to market pretermit of SC measuresSuppply base reductionReduced logistics followLack alliance guidelinesSegmented nodesPoor SCM understandingShargond investment/benefitsBenefits of strategic supply chain managemenIncreased memorial disturbance Inventory turn reflects how frequently a company flushes take stock from its outline. In SCM company has relations both with supplier and client so they receive material on time and deliver goods to node on time. So inventory turnover amplifys. . (Fawcett, S.E. and Magnan, G.M. (2001)).Increased revenues SCM cost reductions Main source of cost saving is inventory management. Through SCM it is practical to stiffen your inventory level and leads to cost saving. differently shipway of bring down cost demote trade relations and glower transaction costEnhance asset utilization via circumstancesd resourcesBetter product design that cost less(Fawcett, S.E. and Magnan, G.M. (2001)).Product availability exponentiation of supplier in new product development process kindle solve many worrys like communications and new ideas ar generated in collaborative design efforts rather than non-colleborative. In todays marketplace there is a need to have the safe product available at the right time and right place at a lower cost than the competition. . (Fawcett, S.E. and Magnan, G.M. (2001)).Responsiveness Responding to customers in a courteous, personal and understandable w ay is falsify eventful.Quickly response to customers requests is doable finished collaboration with chain partners.Close affinity with partners enables them to look for their collaborators needs and handleunexpected events.Supply chain responsiveness requires exceptional/ corking manufacturing and logistical flexibility to meet unique or special requests.And it is feasible through desegregation. . (Fawcett, S.E. and Magnan, G.M. (2001)).Economic value added There atomic number 18 two view points from which percent holder value give the axe be measured.1) Internal view point (Economic value is apply) 2) External view point (Market gravidization is utilise)EVA is mensurable by deducting the cost of capital from its operating profit.Drivers of tradeholder value are Operating cost reduction ,fixed capital and departing capital capability and revenue growth. There is no doubt that supply chain system affects all these drivers right away or indirectly. These are some o f the strategiesLead time of all incoming products is reduced by having partnership with the suppliers .By consolidation processes .internal lead time can be reduced.By having a unanimous relation with distributor breeding flow from demand size is improved.(Christopher, M., Ryals, L. (1999)). jacket crown utilization Capital utilization refers to how a companys assets are best employ. Capital utilization is dollars of revenue generated in relation to dollars invested in assets such as account receivables, inventory etc.Examples of supply chain management confederacyDemand planningTransportation managementInventory management get forecasting(Timme, S.G. and Williams-Timme, C. (2000)Decreased time to marketSuccessful companies create supply chains that respond to the sudden changes in market.Effective supply chain enables a firm to respond to the short term changes in demand and supply in the market because of collaborative blood with suppliers and distributors. (lee(2004)Redu ced logistics costs In an incorporated supply chain , faculty and effectiveness of operations can be improved by managing the movement of material throughout the firm in an organic and systematic way. This allow the firm reducing their grease ones palms cost ,transportation cost and inventory and warehousing cost.( La Londe, B.J. and Masters, J.M. (1994), Emerging logistics strategies blueprints for the close century, International Journal of Physical Distribution Logistics Management, Vol. 24 No. 7, pp. 35-47. La Londe, and Masters,).Barriers to effective supply chain managementInternal and external turf wars Conflicts at heart the departments and within organizations are fundamental barrier to SC collaboration. In most of the companies all departments such as selling, finance , operation work independently. But when managers make decisions they only consider their own department and push aside the impact of their decision on different departments and on whole organization. And analogous is the case with supply chain partners severally partner work only for its own interest. So A tug of war begins as for each one department and partner pull the organization in their favor. (Fawcett, S.E. and Magnan, G.M. (2001)Poor SCM planning Supply chain management is a way to combine process and entrepreneurship. The concept of SCM begins with customer and integrates all activities from raw material procurement to washed-up product distribution. In many organizations SCM fails payable to insufficient forecasting and poor planning process. For correct forecasting, planning process must involve allow take overers and relevant pick outledge. Andraski, J.C. (1998).Lack of SCM vision One of the major barriers to SCM collaboration is that chain partners dont have clear and putting surface vision of SCM. They hold dissimilar beliefs and set and supplier and customer dont role common goal. (Akkermans, H., Bogerd, P. and Vos, B. (1999),Lack of SCM vision Lack o f trust is one reason that crinkle partners are not ordain to package knowledge openly .because they have fear that if they share their weaknesses with their chain partners then they might use their weaknesses against them in near future. So effrontery is pre-requisite in effective supply chain management. (Fawcett, S.E. and Magnan, G.M. (2001),Executive commitment give-up the ghost management should here be still as the group of tribe that together constitute the highest management executive authority in a company. Top management is in a position to play an most-valuable role in successful SCM collaboration. A prerequisite for performing SCM is top management support. Almost all of the barriers such as incompatible technology ,conflict among supply chain members ,lack of employee uncoercedness to share information can only be overcome with top management support. According to (Moberg et al., 2003) training and education are Important factors for top management to encourag e and intensify. (Sandberg, Erik1 Abrahamsson, Mats(2010))IT deficiencies As because of globalization suppliers and customers are located all over the world so integration has commence a major challenge .Lack of integrated information system is a major barrier as sharing of information is not possible without integrated information system. IT is like a nerve system of SCM. ( E.W.T. Ngai a,*, A. Gunasekaran b ,(2004) formational structure /culture Organization culture and structure are also very crucial barrier to SC collaboration. If an organization is functional independently for a long time then its very herculean for it work in collaboration with other chain partners.Lack of SC measures In station to have a secure collaboration among the supply chain partners it is crucial to measure the supply chain performance.(Brewer and speh ,2001) Measuring supply chain performanceLack alliance guidelines Each channel partner in the supply chain has a separate plan for activities such a s deed plan and schedules. If an organization only have understanding of their on process and they dont have understanding of their customers and suppliers processes then there is a gap exist and organization cant improve their processes as external processes have an influence on internal processes. Lack of same performance measures across contrary departments and across the channel partners leads to conflicting behaviors both internally and externally. ( Barratt, M. (2004a)Poor SCM understanding Employee dont have understanding of how SCM is beneficial for the organization and how it will benefit their job .This poor understanding is one reason they are not willing to contribute in SCM implementation.Bridges to effective supply chain managementInformation transperancy ( yu zhenxin (2001) Each member of the supply chain should have complete information about the other members. If members are willing to share information then this leads to the improve performance of the whole syste m .Collaborative planning Planning should be made with the involvement of all parties involve in the supply chain. Such as demand forecasting, production schedules etc may not be effective without the involvement of all partners.IT architecture /internet With the passage of time SCM is becoming more and more composite and require online communication system .In order to enhance the buyer- supplier relationship different information technologies such as Electronic Data leaf ,Internet And World Wide Web Are Used.Formal performance tracking In order to have a strong collaboration among the supply chain partners it is crucial to measure the supply chain performance. (Brewer and speh ,2001). Measurement of supply chain performance can help in Reducing cost ,Identify and target those segments of market which are more profitable((Lambert and Pohlen, 2001),better and improves decisions and test and employ new strategiesAdopt strategic SCM vision Chain partners should have clear and com mon vision of SCM. They should hold same beliefs and values and supplier and customer share common goal. (Akkermans, H., Bogerd, P. and Vos, B. (1999),Attention to human factors A fundamental factor for the successful SCM collaboration is the human factor . People resist changes and they dont urgency to share information with others .So attention must be paid to human factors rootage as their willingness to implement effective SCM is the key to success. . (Fawcett, S.E. and Magnan, G.M. (2001)).Suppply base reduction Supply base reduction is use by the firms to enhance quality , ontogeny responsiveness , and reduce cost . Coke has adopted N+1 rule of thumb for determine maximum number of supplies. It means they have just 1 more supplier then required. (Fawcett, S.E. and Magnan, G.M. (2001)).Segmented customers Organization should collaborate only with those suppliers and customers who are strategically important for the business. This segmentation play a very important role in su ccessful collaboration.(Tang and Gattorna, 2003). section of customers is done on the basis of their buying behavior and services needed. antithetical supply chains are made for different segments. A different strategy and supportive culture and leadership style is required for different supply chains. To serve the segmented supply chain a barely step is to segment the suppliers according to their abilities.Shared investment/benefits For SCM to be more effective and successful there is a need to share benefits resulting from integrated SCM. Benefit sharing is as much(prenominal) important as information sharing . even though reliable and trust worthy information is available ,there should be a need to fairly allocate benefits among members otherwise it weakens their relationship. (Fawcett, S.E. and Magnan, G.M. (2001)).MethodologySCM removes the boundaries of the organization therefore it is known as boundary spanning activity (Bowersos et al,1999) . To Have a macro picture ,in formation is collected through channel analysis. In this way more generalized view about the benefits ,barriers and bridges can be obtained.Case studiesThe case study method is used for answering questions regarding what, why, and how related to SCM implementation. This method put emphasis on in detail qualitative analysis.In order to have a cross-channel analysis interview is conducted from supplier ,SC manager and retailer.A structured ,face-to-face interview was conducted and Confidentiality was ensured .Structured interviews are those conducted when it is known at the outset what information is needed. The interview has a mention of predetermined questions to be asked. The interview guide was divides into general questions and questions about the benefits ,barriers and bridges faced by the organization. Average interview duration was 1 and one-half hour. And face-to-face interview helps in repeating and rephrasing questions if not understood by respondents, and clarify doubts. Interview consist of return-ended questions.Results and discussionTop five benefits ,barriers and bridgesBenefitsBarriersBridgesCustomer satisfactionInadequate information systemAdequate information systemOn time savingLack share risk and revengeSharing of risk and rewardResponse to customer requestLack willingness to share informationWillingness to share informationOrder fulfillment lead timeLack employee authorisation cured management interaction terms reductionMeasuring customer demandSupply chain trainingBenefitsCustomer satisfaction club customers are satisfied because company is in a position to fulfill their needs, deliver goods on time and at low cost through integrated SC.On-time delivery The development of closer, cooperative relationships with chain partners together with the government of integrated systems and processes make it possible to consistently deliver goods and services to customer at the right time and at the right place.Respond to customer requests Busi ness analysts have been saying for years-that customers matter most. So response to customers need as quickly as possible is very important for the success of business. One way of doing this in todays competitive market is to develop strong relationship with suppliers, retailers and distributers. This collaborative supply chain enables all parties to respond to their customer speedily.Order fulfillment lead times Supply chain integration also reduces order fulfillment lead times by having exact quantities on-hand when needed .Cost reduaction One way of cost reduction is to reduce cost of inventory. Another is sharing of resources with your chain partners and also by reducing product development cost through integrated process.Some other benefits includesHandle unexpected challenges More open and trusting relationships enable more accurate information to be shared on more by the way basis. This helps in making Supply chain partners better able to call their collaborators needs and handle unexpected events (e.g unique or special requests ) productivityOne of the most important benefit due to which organizations are adopting SCM is to sum up revenues and decrease costs.Productivity is the ratio of Outputs/inputs. if planned and managed correctly, changes in supply chain relationships can help in producing same outputs with low cost of inputs and ultimately revenue increase .This doubleimpact of supply chain management is motivating factor for organizations to build strong relationship with chain partners in order to evermore reduce the costs of purchased items and to work with them to improve their processes in ways that increase productivity.Product innovation lead times,Collaborative product development help to minimize product innovation lead time. Involvement of all the partners results in higher quality,lower cost and less time to market. To gain these benefits there should be a need to build strong relationship base on trust and communication is neces sary to share technology, co-locate personnel, and accept supplier-generated design improvements. boilers suit product qualityThrough supply chain integration it is possible to shift the responsibity of quality to the supplier. Better quality is assured by supplier certification programs .BarriersInadequate information system Inadequate information system is that lack in quantity and quality of information if not plenteous information is shared or the information shared is of little value strategic SCM may fail.Lack of willingness to share risk and rewards As employee dont have clear understanding of what SCM is and how will benefit their job so they are not willing to share their risk and reward.Lack willingness to share information Lack of trust is one reason that people are not willing to share information openly .because they have fear that if they share their weaknesses with their chain partners then they might use their weaknesses against them in near future. So Trust is pre- requisite in effective supply chain management.Lack employee authorisation Lack of employee potency is a barrier to SCM to be successful. As employee empowerment is one way to motivate employees to participate in making SC collaboration successful. Employee empowerment is a form of decentralization it means give employees the power to make decisions regarding their job and tasks. One of these decisions includes making purchasing decisions .i.e. when and how much is to be purchased..This will leads to successful implementation of Just-in clip manufacturing concept.Measuring customer demand Accurately forecast customer demand is very important for successful SCM integration . In case manufacturers and distributers fails to accurately forecast customer demands then there are chances of stock outs and organizations face difficulties in maintain adequate inventory level.Some other barriers includesOrganizational boundariesThere are two kind of boundaries in any organizarion intra and inter-organizational boundaries. These boundries should be removed for successful supply chain integration.For successful supply chain integration intra and inter -organizational boundaries should be removed.inter -organizational boundariesovercoming the company boundaries and working closely with suppliers and customers.(i.e., functional, business process, information/materials flows, and information/communication technology integration)intra -organizational boundariesIntegration betwixt different hold in and functions, such as manufacturing, distribution, marketing, accounting, information, and engineering.Measuring SC contribution, .Measuring Supply chain contribution is very important . these four measures can be used to measure supply chain contribution.Delivery percentage of entire order deliver to the customer when he or she wanted it.Quality for this purpose Customer satisfaction and customer loyaty is checked. Customer satisfaction includes giving customer what they expec ts. Customer loyaty is the percentage of customers who still purchase their products after purchasing once.Time order fulfilment lead time is effected by inventory level. For total order-fulfilment lead time, first The time spent in inventory should be computed for each part of the supply chain (supplier, manufacturer, wholesaler, and retailer) and then added.Costmeasure cost along the supply chain is to measure efficiency in value added or productivity. One measure of efficiency is as followsEfficiency = sales cost of materials / labor + overheadLack resources for SCM resourcefulness constraints represent Serious hurdle in supply chain integration effortsAlthough companies are trying tobest utilize the people resources that they have, but due to their nature of always trying todo more with less, create problem of lack of resources.e.gThe managers who areConside to be best for handling supply chain initiativesbecause of their experience, work ethic, creativity, technicalknowledge, and personal credibility are always inhigh demand.interviewed managers identifiedother critical resources constraints including capitaland technologyBridgesAdequate information system EDI LINKAGES ERP system is a single corporate system in which several computer hardware and software components are used . This coordinated system helps in cross functional integration (e.g between all departments , accounting departments, as well as marketing, strategic management, and human resources, in addition to warehousing, Information Technology, logistics, and production. ). Organizations adopt ERP system in order to integrate data and process into a single unified unit rather than trying to synchronize data and process across different systemsSharing of risk and rewardInterview manager also highlighted the point that in order to build closer relationship they share both Risk and reward with their chain partners.Frequent communicationOpen and clear broad line of communication should be deve lop (Mohr and spekman (1994))Senior management interactionTop management is responsible for integrated supply chain management.Only senior manager can remove the walls between the organization and between the organizations.Supply chain training As supply chain is becoming more popular and technology focused ,the individuals directly involve with it are required to give additional training.Some ways of giving training to individuals areOn the job training expunge classes out of workOnline trainingSome other bridges includes Suppply base reduction, Vendor managed inventory (vmi), Use of total cost analysis, Common goals and shared cathexis statement, Use of cross-functional teams and cross-functional processesSuppply base reductionSupply base reduction is use by the firms to enhance quality , increase responsiveness , and reduce cost .Coke has adopted N+1 rule of thum for determining maximum number of supplies.It means they have just 1 more supplier then required.VENDOR MANAGED INVEN TORY (VMI).Supplier is responsible for managing inventory at customer s location .Customer is not required to order .Its the duty of supplier to maintain the stock of customer at best level.Use of total cost analysisAs we all know that Competition in todays markets is much more then before.so in order to compete in market , organizations need to offer products at low price and high quality.Through SC collaboration it is possible to reduce Total production cost . by having long term relationship with supplier, supplier reduce the cost of their supplies.in this way total production cost is reduced.Common goals and shared mission statementFor SCM cooperative efforts to be successful, increase understanding and respect for partners businesses is very important.This process involves common golas and shared mission statement.When they all have a common goal , combine efforts are made to achieve that goal .And decisions are made for the success of each party.Use of cross-functional teams and Cross-functional processesEffective supply chain requires coordination across businesses and within the business. Coordination within the business is possible through Cross-functional teams and process..For example, a cross-functional team is often used to plan and control the master schedule for manufacturing. The team consists of representatives from marketing/ sales, production, human resources, and accounting/ finance. The team develops a forecast of future expected orders, plans the depicted object of manufacturing, and schedules customer orders. Everyone then agrees to work toward executing this plan. Without a cross-functional team of this type, marketing makes a forecast, production uses a different forecast to plan production, and the capital is not made available to provide the capacity needed.Clear bail management guidelines.alliance management techniques, none of the interviewedfirms have every one in place.Clear roles and responsibilities are defined and communic ated.Risks and rewards are shared on a mutually acceptable basisTechnology linkages can be used to routinize information exchange.Overall product quality Through supply chain integration it is possible to shift the responsibity of quality to the supplier. Better quality is assured by supplier certification programs .Conclusion and LimitationsThis article attempts to severalise potential benefits ,barriers and bridges of successful implementation of SC integration .Results shows that all chain partners are enjoying many benefits from SC collaboration. Primary benefit mentioned by all chain partners is Customer satisfaction. In supply chain ,Supplier want to satisfy their customer (i.e. manufacturer) and manufacturer want end user to be satisfied. So for this purpose they must be aware of what customer expects from the product or service and then make efforts to meet their expectations .SC manager ,supplier and retailer do not share the same values and beliefs regarding the primary b arrier and bridges of supply chain management. SC manager happen upon human factors as the primary barrier to SC collaborati