Key Issues In Supply Chain Management

The supply chain management issues concern activities of the firm at various levels of decision making, ranging from operational level to strategic level via tactical level.
The strategic level : The decision making at this level is made with long term objectives and with long lasting effects. These include decisions regarding location of various facilities, including the manufacturing plant, distribution warehouses and the structure of the distribution channel.
The tactical level: Decision making at this level is concerned with purchasing and production functions, inventory policies and transportation strategies. These decisions will be usually updated on an annual basis.
The operational level: Decision making at operational level will concern day to day management of activities such as scheduling, routing and vehicle loading etc.
Your text provided details of some of the key issues identified by the authors. Your text is laid out in that line. The key issues in contemporary supply chain management are:
• Configuration of distribution network : This issue deals with the design of a distribution network to serve a specific market. This will consist of a set of warehouses and retail outlets, together with the manufacturing plant and supply sources. The design will be based on consideration of location and capacity of each of these elements. The total network cost will include the costs of inventory at various levels and costs of transportation between various facilities. This will also determine the level of service available to the customers.
• Inventory control: This is concerned with the levels of inventory to be held at various points in the supply chain. As inventory represents costs, the sensible approach is to hold as low an inventory as possible but businesses are forced to hold inventories as a buffer to counter the affects of an uncertain demand. How to minimise the uncertainty and therefore the necessity of holding unnecessary inventory which increases the cost at the end?? This is one of the key issues in supply chain management.
• Distribution strategy: The distribution strategy is concerned with the distribution of the firm's products. There are several strategies available such as cross-docking, the classical distribution strategy or direct shipping. Which one is the best suitable for the firm to achieve its supply chain and corporate goals??
• Supply chain integration and strategic partnering: This is concerned with the complex issue of strategic inter organisational partnership for achieving competitive advantage. This is about sharing of information and efficient use of the information for coordinating business processes to deliver a superior value to the customers. How to achieve this and what are the challenges? This is one of the emerging issues in supply chain management.
• Product design: This is concerned with the design of the product and its impact on total cost of the product. How does the design of a product affect the various cost elements within the supply chain? It is possible that the design determines the strategies to be followed regarding inventory or transportation. The design may also determine the length of the product life cycle and the extent of uncertainty associated with demand for this product. How to leverage design to achieve supply chain management objectives.
• Information technology and decision support systems: The enabling role of information and communication technologies has been identified. The concerns of contemporary supply chain management are the efficient use of modern technology including the Internet and computerised decision support systems. The technology allows acquisition of vast quantity of data, information and their subsequent processing in accordance with selected decision criteria. Will these technologies emerge as key determinants of success in the management of supply chains?
• Customer value: The key issue is the definition of customer value in an age of increasing consumer power. How will supply chains will be designed to provide value to the customers and how will firms define value?