Discuss about the Supply Chain Management for Global Market.
Supply chain management focuses on analysing movement of products for ensuring all the requirements of the market fulfilled in an appropriate manner (Christopher, 2016). With the increasing competition in the global market, organizations have focused on formulating logistic management strategies for sustaining its position in the market. In this study, the focus would be one of the prime computer hardware providing organizations namely Supermicro. The study will focus on evaluating entire order management procedure of Supermicro for fulfilling the requirements of the customers. The study would also analyze the investment management procedure of the organization to reduce issues associated with the waste management procedure.
Charles Liang founded Supermicro in the year of 1993 with the focus of providing superior types of computer hardware products across the globe. Supermicro also has enhanced its specialization in providing power supplies, networking and storage system equipments for grabbing the major share of the market. Presently, headquarter of Supermicro is based on San Jose California of USA (supermicro.com, 2017). From the beginning, Supermicro has always tried to initiate effective strategies for achieving competitive advantage in the market. Presently, Supermicro has to face immense competition from the organizations like Concurrent computers, Cray Inc, Fitbit Inc and Omnicell Inc in sustaining its position in the global market. For that reason, it has also has tried to include advance technology solutions for providing maximum support to the customers. Moreover, organizations like Apple and HP has able to set the trend in the computer hardware equipments globally. Therefore, Supermicro is to establish its presence in the global market, it has focused on developing effective supply management strategies. In fact, Supermicro also have focused on evaluating different departments including production, marketing and financial department for handling all the business activities appropriately. It has also focused on developing specific strategies related to inventory management for minimizing the possibility of waste in the operational process.
According to Islam et al. (2013), using pattern of supply chain network also can influence business activities of other departments as well. Specifically, globalization has made supply chain process of the organizations extremely complex, which also has influenced other departments like production, marketing and finance to change their activity accordingly. The impacts of Supermicro’s supply chain management on other departments are as follows:
As per the article by Stadtler (2015), efficient use of supply chain management can ensure required amount of raw materials reach to all the production facilities consistently. Now, Supermicro produce networking and computer hardware equipments that require specific superior quality of raw materials. Otherwise, the provided quality of the hardware or networking products will not able to satisfy the customers effectively. Furthermore, effective supply chain management would allow organizations to maintain the quality of raw materials, as it would develop strong relationship with distributors. As a result, it would help production unit of Supermicro in maintaining its produced quality continuously. On the other hand, supply chain management can create direct impact on the distribution cost. Therefore, if Supermicro can able to reduce the distribution cost, it would allow manufacturing unit to reduce direct sales and overhead cost in a major way. It has been assessed that Supermicro tried to utilize advance technologies for reducing the required lead-time in a major way (Wisner, Tan & Leong, 2014). Furthermore, effective utilization of supply chain require well-developed organizational structure, which would also help production unit to maintain strong coordination with other departments. For that reason, it has helped Supermicro to fulfil all the business activities within the given timeframe.
As highlighted by Fawcett, Ellram and Ogden (2014) supply chain management can also have huge impact on the marketing activities of the organizations. It has been assessed that effective utilization of supply chain management can allow organizations to provide required amount of products at the desired destination effectively. As a result, it helps organizations to increase the convenience level of the customers. On the other hand, one of the prime objectives of marketing department is to increase the sales volume of the provided products and services in a major way. Now, higher convenience will increase the satisfaction level of the customers, which will eventually create positive impact on the overall sales volume. Therefore, if Supermicro can able to initiate proper logistics management strategies, it would definitely help marketing team in fulfilling their aims and objectives. Moreover, supply chain network also play crucial role in returning diffective products from the customers in a short period of time (Schönsleben, 2016). Therefore, if Supermicro can able to reduce the required time for providing the right product to the right customers, it will help to enhance the sales volume in a major way. Thus, effective utilization of supply chain management is necessary for providing assistance to the marketing department in fulfilling their goals and objectives.
As opined by Mangan, Lalwani and Lalwani (2016) logistics and supply chain management also can have major impact on the financial performance of the organizations. It has been assessed that effective utilization of supply chain management will allow Supermicro to provide optimum amount of products to the customers. As a result, it would help Supermicro to reduce the waiting the time of the customers in a major way. Moreover, effective use of supply chain management will allow Supermicro to eliminate all the intermediaries in an effective way. As a result, it would help financial department to keep track of all the activities associated with supply chain procedure in a much easier way.
It has been assessed that organizations like Supermicro will have to deal with huge number of customers for fulfilling all the business objectives effectively. For that reason, it had to systematic order supply process for providing right amount of products to the right place at the right time. Now, order supply process of Supermicro desired as follows:
Figure 1: Order cycle
(Source: Fernie & Sparks, 2014)
From the above figure, it can be assessed that supply chain management process of Supermicro can has three components including manufactures, retailers and distributors. It has been assessed that distributors and manufacturers of Supermicro collaborate to fulfil the requirements of each placed orders. However, the logistic chain begins from supply of raw materials for developing proper computer hardware and networking products. Supermicro has focused on developing long-term relationship with all the suppliers in order to maintain the quality of raw materials at the desired order (Tayur, Ganeshan & Magazine, 2012). Moreover, it also has focused on providing specific benefits to all the suppliers for ensuring the required amount of raw materials are present at all the time.
As highlighted by Dyckhoff, Lackes and Reese (2013) ordering cycle of Supermicro has different steps, which allow organizations to fulfil all the requirements effectively. Firstly, order cycle of Supermicro focuses on tracking the placement of orders from the different geographical areas. It allow Supermicro to assess the amount of product need to be delivered at different locations. Moreover, it also helps Supermicro to assess the present trend of the market regarding specific products and services. Secondly, Supermicro focuses on receiving the orders from customers. This step is essential for confirming the sales of that particular unit. Moreover, confirmation provides customers to become more relax, as they will receive the desired product within the given timeframe. Thirdly, Supermicro focuses on processing the order from inventory department for ensuring right amount product would be provided at the given period of time. For that reason, Supermicro has tried to develop strong link up between inventory department and distributors so that it do not have to wait for processing the products. Thus, it actually would help Supermicro to reduce the required lead-time in an appropriate manner. Fourthly, credit department focuses on verifying the processed products in order to ensure right products will be delivered to right destination. Moreover, it also focuses on assessing the amount of products have to be delivered within near future (Coyle et al., 2016). As a result, it allows organization to manufacture required amount of products in an effective manner. Fifthly, Supermicro focuses on shipping the products to specific retail outlets so that customers can purchase without facing any difficulties. As a global organization, Supermicro has tried to utilize different transportation tools for ensuring required amount of products has been delivered to the desired destination. Finally, Supermicro also has focused on collecting back the products from the customers in case of any complaints regarding improper functioning. Here, Supermicro try to provide replacement to the customers with 24 hours time limit so that satisfaction level of the customers remain at the optimum level.
As per the article by Waters and Rinsler (2014) effective utilization of inventory management strategies are crucial for maintaining the profit level at the desired rate. For that reason, Supermicro has focused on developing inventory management strategies carefully so that it can fulfil all the business objectives. For instance, it has focused on reducing the amount of obsolete products in order to ensure the cost required for operational process remains at the optimum level. For that reason, it has focused on introducing new advanced technologies warehousing management system in the inventory management procedure. Supermicro also has used all these advanced technologies to maintain continues track of all the products. It has also focused on developing strong relationship with the distributors so that they select right product to take out from the inventory process. For that reason, it has allowed Supermicro to achieve success in maintaining the profit level at the desired rate. Moreover, it has also focused on utilizing requirements planning for handling all the challenges associated with the inventory management procedure.
It has been assessed that Supermicro has made a conscious effort in managing the inventory level effectively. However, there is still scope for improvement for Supermicro, which will allow the organization to achieve competitive advantage in the market. For instance, Supermicro can focus on using systematic procedure for handling all the responsibilities associated with inventory management. Firstly, Supermicro would have to focus on fastening the supplier lead-time, which will help to reduce cost related inventory process. Moreover, it would also help Supermicro to follow quick replenishment model. Secondly, Supermicro needs to focus on eliminating all the obsolete products from the stock. As a result, it would help Supermicro to simplify inventory management procedure in an effective manner. It has been assessed that with time different networking and computer hardware products become defected or obsolete (Sarkis, 2012). Therefore, keeping track of all these defected products will not add value to the inventory management procedure. For that reason, it is necessary to eliminate all the obsolete products immediately. Thirdly, Supermicro will have to focus on optimizing order size and frequency of purchase in order to have an idea about the future demand. Therefore, it would help Supermicro in formulating strategies for handling all the future challenges related to inventory management. Fourthly, Supermicro needs to focus on centralizing the inventory control so that it can handle all the requirements effectively (Beske, 2012). Now, advanced technologies are required for utilizing centralized system in dealing with inventory management perspective. Now, Supermicro has already initiated different software applications for handling inventory activities. Thus, it needs to focus on multi-echelon planning models for handling all the requirements in an efficient way.
Conclusion:
The above discussion has highlighted the fact that supply chain management plays an important role in providing higher profit level to the organizations. The study has highlighted the fact that Supermicro has focused on covering all possible aspect related to supply chain procedure for delivering right product at the right time. It has also highlighted the fact that effective utilization of supply chain concept can also help organizations to provide support to other business departments. Specifically, supply chain management can help production, marketing and finance department to fulfil their objectives in an effective way. Moreover, it has also highlighted the significance of maintaining proper inventory management procedure for fulfilling all the requirements related supply chain concept.
References:
Beske, P. (2012). Dynamic capabilities and sustainable supply chain management. International Journal of Physical Distribution & Logistics Management, 42(4), 372-387.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. (2016). Supply chain management: a logistics perspective. Nelson Education.
Dyckhoff, H., Lackes, R., & Reese, J. (Eds.). (2013). Supply chain management and reverse logistics. Springer Science & Business Media.
Fawcett, S. E., Ellram, L. M., & Ogden, J. A. (2014). Supply chain management: from vision to implementation. London: Pearson.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
Islam, D. M. Z., Meier, J. F., Aditjandra, P. T., Zunder, T. H., & Pace, G. (2013). Logistics and supply chain management. Research in Transportation Economics, 41(1), 3-16.
Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain management. John Wiley & Sons.
Ross, D. F. (2013). Competing through supply chain management: creating market-winning strategies through supply chain partnerships. Springer Science & Business Media.
Sarkis, J. (2012). A boundaries and flows perspective of green supply chain management. Supply Chain Management: An International Journal, 17(2), 202-216.
Schönsleben, P. (2016). Integral logistics management: operations and supply chain management within and across companies. CRC Press.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
supermicro.com. (2017). Supermicro.com. Retrieved 13 February 2017, from https://www.supermicro.com
Tayur, S., Ganeshan, R., & Magazine, M. (Eds.). (2012). Quantitative models for supply chain management (Vol. 17). Springer Science & Business Media.
Waters, D., & Rinsler, S. (2014). Global logistics: New directions in supply chain management. Kogan Page Publishers.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach. Cengage Learning.
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