An Introduction to the Supply Chain and the Firm's Position within It Essay

An Introduction to the Supply Chain and the Firm's Position within It - Essay Example Discussion: A Supply Chain may be seen as a series or network of facilities and distribution channels which facilitate the procurement, processing and conversion of raw materials into finished products and their distribution from the place of production to the final customer through a series of distribution stages. The stages are characterized by the distributer at the given stage and the activities that are performed by the distributor to ensure the delivery of the product to the end customer (Wiley 2012). The supply chain usually takes diverse forms. The structure of the firm varies in length, size, shape and the kind of activity involved. Also, a firm may be part of more than one interconnected supply chains, whose final outcome might be differentially diverse (Enporion 2009). Thus the Supply chains may sometimes more appropriately be referred to as Supply networks. For example Kellogg’s the world leading breakfast cereal and snack producer, sources raw materials from diffe rent sources which are functionally as well as geographically diverse. Further, Kellogg’s collaborates with a huge network of distributors like wholesalers, retailers and other outlets like hotels etc to make its product reach to the end customers (The Times 2012). Once the concept of a Supply chain as part of the value chain is established, the concept of Supply Chain Management (SCM) comes to the fore. However it is important to understand the concept of logistics first. Logistics is concerned with Flow of materials and information to and from a firm’s boundaries aiding in the production and distribution of its products to the customers. At the same time, supply chain is a network of companies performing these logistical activities together to bring a product or products to the market. Also, a supply chain, apart from the logistical activities, also includes activities like marketing, finance and customer service. Supply Chain management thus is concerned with the co ordinated activities of production, location and inventory among the various participants of a supply chain. The activities are directed such that a mix of responsiveness and efficiency that is best suited to the market is achieved (Wiley 2012). Supply chain management is therefore concerned with the efficiency and effectiveness of a supply chain. One of the major objectives of a supply chain is to reduce the logistical costs. Also, it strives to achieve an incentive within the system to remove waste from the processes or activities involved. It is through effective Supply Chain management that a firm can achieve the objective of a giving a better and differentiated value to the end customer. Kellogg’s for instance achieves this value through activities like partnering with supermarkets like Tesco. It follows close relationships with such partners. It has come up with a shelf ready unit at Tesco, which helps gives better choice and visibility to customers. Also, it augurs wel l for the sales both for Tesco as well as for Kellogg’s. In the recent years, Supply Chain Management has assumed an increasingly important role. This is so due the increasing globalization and industrial competition. From the perspective of stakeholders of a supply chain