Supply chain system
refers to the flow of materials and information in an organisation that
eventually reaches consumers. It typically involves a series of operations such
as obtaining raw materials, converting them and distributing the end product.
The main aim of it is to ensure the right product reaches customers in the
quickest and cost-efficient way (Simchi-Levi et al, 2000)m1 . A model of a supply chain system is illustrated
Fig.1 Supply chain system of Apple (Benjabutr,2013)
The first benefit is
reduced cost (Fawcett, Magnan, & McCarter, 2008). Through implementation of
effective supply chain system, inventory cost can be reduced. Information
provided from such a system enables operational managers to plan primary
activities such as arrival of goods and shipment timings. As such, leading to a
more effective and efficient inventory management. For example, Intel
considered implementing a “true make-to-order” supply chain system. Some
changes made include reducing chip assembly time from five to two days,
introducing a planning process and even, using a vendor-managed inventory
model. These changes reduced cycle times in a short time period and resulted in
cost reduction of approximately $1.50 per unit for an Atom chip (Vijairaghavan,2013m2 ).
Another benefit is
improved delivery service (Ivanovska & Kaleshovska,2013). Supply chain
management system allows ease of flow of materials and goods. With an automated
system, it minimises errors and increase accuracy of the system. This allows
for a seamless flow of information and goods from supplier to customers. For
example, Deere & Company, a manufacturing firm produces a range of
products. This requires major operations such as cross-docking which are
expensive and slow. As such, the company redesigned its supply chain network,
optimising cross-dock terminal locations and consolidating shipments. The
increased involvement of third party logistics also aided in forming a network.
This resulted in a vast decrease
in product delivery time(Byrne,2016).
Furthermore, it increases
quality of products. Supply chain management aids to minimise process
variation. As the system is automated, less errors are found in the supply
chain. This helps to regulate and maintain the system and as such, reduces
cycle times. Therefore, facilitating the production of less defected and
better-quality products (Flynn &
Flynn,2005). For example,
ModusLink used its supply chain to identify inaccuracies in its system and
rectify them. With supply chain management in place, it was able to find errors
and created a new production model to redefine its business processes. This
increased flexibility in the chain, allowing forecast inaccuracies to occur.
key benefit is increased customer responsiveness. Supply chain management
results in a faster flow of materials. The use of automated systems makes it
possible to deliver goods from supplier to customer quickly. This means that
customers are able to receive their goods on time and can respond quicker.
Increased customer responsiveness is important as firms largely depend on
customers to make a profit and to uphold their company’s name as well.
Maintaining a good relationship with customers would instil customer loyalty,
reducing bargaining power of customers and ensuring that firm has control over
its activities. For instance, Unilever’s crowdsourced supply chain transparency
has allowed customers to voice their opinions via virtual interaction. This has
allowed Unilever to understand their customer’s need better and implement
changes to meet their needs. This has resulted in positive customer feedback
and an increase in customer satisfaction. (Dhawan, Goodman, Harris & Mitchel,2010)
The last benefit is
improved partner relations. It is easier to coordinate business activities with
suppliers. Also, it aids in choosing the best possible supplier, offering a
better service and adding value to the firm. Supply chain management provides
vital information which helps managers in decision making processes. Managers
can communicate with suppliers beforehand and inform them of the operations
schedule. Suppliers are able to access database of firms at ease. This improves
relations between partner relations and suppliers can deliver their product on
time. For example, Rolls Royce, an
engine manufacture company, establishes a good relationship with its suppliers
by outsourcing 70% of their materials. This collaborative effort has resulted
in an increase in operational performance. Through building a good bond, Rolls
Royce ensures that quality is improved and as such, creates a competitive edge
In conclusion, supply chain system helps to coordinate
business activities between different parties involved in the processes. The
integrated system allows for easy exchange of information and materials at a fast
speed. Supply chain system is therefore necessary for a business to operate
effectively and efficiently.
chain refers to a series of activities involved in adding value to the chain at
each step present in the system. It is used to analyse key operations within a
company and create value to such activities to give firms a competitive edge.
(Laudon, 2012) As illustrated by the Fig 1, key activities can be
categories into primary and support activities.
1. Michael Porter’s Value chain
first primary activity is inbound logistics.
It involves acquiring, storing and maintenance of raw materials. An
example of inbound logistics is Radio Frequency Identification system (RFID).
It uses a microchip that can receive signals from tagged products, just within
a few feet. Companies use RFID to improve inventory control and warehouse
management. Megatrux, a shipment company in California, has introduced RFID
tagging for real-time tracking of goods. This has vastly aided in minimising
tracking errors involved, increasing effectiveness.
primary activity would be operations. Operations refer to the assembly and
packaging of products via use of machines. For instance, the Computer-aided
design and Manufacturing system(CAD/CAM). It uses modern computer technology
for infusing designing and manufacturing of products. For example, General
Motors invested in the CAD/CAM system to improve its operation. With the
implementation of the system, the company was able to save cost and invent a
new series of cars and trucks. This also
resulted in a increase in engineering productivity by 13%.
logistics is a primary activity aimed at delivering the finished product for
distribution to consumers. Order processing system is an instance of outbound logistics.
Samsung utilises a web-based Mule order processing system. This system receives
and processes various order requests. However, it only notifies Samsung of
orders that are manufactured by Samsung. This helps Samsung to process orders
in time, ensuring smooth delivery of products to retail and distributor stores
is accompanied by sales and marketing, a key primary activity essential in
making sure product is made known to potential customers. With the advent of
technology, firms make use of social media sites such as YouTube to advertise
their products. A recent example would be iPhoneX. Apple decided to allow
Youtube stars to have a hands-on experience with the phone and make first
impression videos before distributing it in store outlets. This caught the
attention of many and encouraged them to purchase the phone, resulting in more
last primary activity is customer service. It is vital in ensuring customer
loyalty via fulfilling their needs. Customer Relation Management (CRM) system,
for instance, is aimed at maintaining and improving relations with customers.
Huge firms such as Wells Fargo, a fintech company, has utilised CRM system to
maximise interactions with their customers.It realises that maintaining
customer contact is epochal in having an edge over other banks. With CRM
system, accessibility via social media connectivity is improved and customer concerns
are quickly addressed.
addition, support activities help to facilitate these primary activities. One
of which is firm infrastructure. It refers to an organization’s daily administrative activities such as
accounting, legal, public relations, quality assurance and strategic
management. Highlighting a prominent firm, Procter and Gamble, introduced an
agent-based modelling to improve its financial management. By doing so, it was
able analyse inventory levels, stockouts and transportation costs to improve
current systems. This resulted in cost savings of $300 million annually.
Next is human resource management. It focuses
on hiring, training, retaining employees and general management. The main aim
of HRM is to maximise efforts of employees, enhancing productivity of firm to
achieve firm’s business goal. An example is interactive voice response
system(IVR). It is an automated telephone system that allows user interaction
and gathering of information into database. Zappix has introduced HR Visual IVR
system to upgrade HR employee communication. With this system, employees can
gain access to payroll systems, benefits and administration easily. Thus, it is
more convenient for HR team to manage employee data as it is updated quickly.
activity is technological development. It relates to the use of hardware,
software and equipment to keep firm competitive. With technology rapidly
advancing, it is vital to keep up with the times and update the technology
along with it. A common example used in firms is Internet of Things (IoT). For instance, The Fitbit One uses modern
technology to footsteps, calculate calories burned, and even evaluate sleep
quality. It wirelessly syncs with devices to transfer fitness data to monitor
final secondary activity is procurement. It pertains to the process of
obtaining goods and services from an external vendor. It maximises value to a
firm by reducing cost and generating revenue. Electronic Data Interchange (EDI)
system, for instance, is a computerised telecommunications technology that
enables transfer of data from one user to another. An example is the transmission of an electronic invoice from a
supplier’s invoicing software to a customer’s accounts receivable software. Walmart uses
EDI to interact with one of it suppliers, Seminole Manufacturing Co. This has
reduced delivery time of goods greatly and has increased sales in a short time
since it was implemented
Internet has a great impact on people. With the vast usage of it, it can either
affect people positively or negatively. It is a double edges sword able to add
value or decrease value of lives. This essay would describe ways in which it
improves and leads to a decline in quality of life(QOL).
way it improves QOL is by improving communication. People can converse without
face-to face interactions and distance is no longer a barrier for individuals.
Without the use of the Internet, it would be much more difficult to interact
with family and friends. By increasing connectivity, people can not only
interact with close ones, but can share their lives with the world. Social
media sites such as Facebook and Instagram have enabled us to find out more
about happenings around the world without being physically present.
is another benefit of the Internet. With overwhelming stress and workload,
people find it difficult to find time to relax. The Internet serves as a ready
place of entertainment with its vast options such as watching videos, playing
video games or even reading online books. This acts as a more convenient way
for people to rest well, improving quality of life.
way it improves QOL is via education. The traditional mindset that going to
school is the only way to study has long been gone. With online learning
platforms that are certified, individuals are able to take education in their
own hands. This is especially useful for the older generation as access to
learning is much easier. It promotes lifelong learning which enhances
understanding of the world, improving QOL.
is another factor in which the Internet has played a key role. It consists of a
plethora of information, including healthcare related articles. Individuals can
improve their health by finding for useful information online. This enables
individuals to self-help in cases that do not require professional help. In
recent times, online medical consultations have been made possible with the use
of Internet and medications are prescribed online. This vastly reduces effort
and time that people usually take just to queue and consult a doctor.
Internet has also facilitated online banking. They enable ease of cash transfer
between accounts. It makes it more convenient for consumers to access their
personal bank information and carry out transactions. The fast speed of the
Internet enables bank transactions such as paying bills, to run smoothly. This
decreases time and saves energy of people.
the advent of Internet has also resulted in negative impacts. One major concern
is social isolation. With people utilising virtual platforms often, they might
choose to stay away from social interaction.
Internet causes people to be hooked on and dissociate from their
real-life issues. This reduces communication among individuals, resulting in
loneliness and even, depression.
way it declines QOL is it causes lack of security. With ease of access to
information, personal information can be easily leaked out as well. This raises
the question on whether the Internet is truly safe for users. Hackers may pry
into one’s personal details and invade their security. As such, users can never
really trust the Internet and must be alert online. This reduces QOL as it
reduces freedom for people.
it causes digital divide among different generations. As the Internet is
rapidly growing, it is vital to keep up with the times. The younger generation
is able to cope with such changes. However, this is not the case for the older
Baby Boomers generation. Senior citizens usually have a harder time integrating
with technology and may not be well versed with its usage. This results in a
social disconnection between the two generations. It can also result in feelings
of resentment as younger adults feel the need to constantly “teach” the older
adults resulting in frustration. This affects relations, reducing QOL.
issue brought about by the Internet is addiction. It is a serious disorder that
results in individuals to live in their own world. They grow emotionally
attached to people they meet online. Online games, for instance, connects
groups of people from across borders and can result in one wanting to live in
the gaming world. This causes adverse mental effects as they become overly
dependent on such platforms and find it difficult to live without it. This
implies that they seek personal satisfaction from virtual networks, instead of
connecting with people in real life. Relations are affected, reducing QOL.
last concern addressed would be the reliability of the internet. With
information being easily accessible, people can share news that are untrue or
inaccurate. However, due to the rapid nature of the Internet, news spread
quickly and can reach millions in a few minutes. With dissemination of such
information, people cannot always trust what they see and this questions the
liability of Internet.
refers to the collection of hardware, software and people that coordinate to gather,
store, categorise and process information (Laudon,2012). The use of
information system has now become a great support to firms (Adekeye). Without
the use of Information system, it would be difficult to manage information in a
firm. It helps a firm gain competitive advantage. Therefore, I disagree with
the statement to a large extent.
System is used to divert business cost and reduce cost of products and services
(Booth, Roberts & Sikes ,2011). As such, improving business processes. With
the help of IS, the production and delivery costs are greatly reduced (Ward, P. T.,
Bickford, D. J., & Leong, G. K. ,1996). A classic example
is Walmart. It spent a significant amount of money, investing in and
implementing cut-edge modern technology to aid in supply chain management. As a
result, its operational cost has reduced while achieving excellence in
procedures. (Tanwar, 2013)
Secondly, the advent
of technology has enabled firms to work closely with business partners via
virtual platforms. Firms can focus on key business operations while being able
to work on collaborative projects with other businesses. This enhances
relations between firms, allowing for growth opportunities. An example is the
Philips- Sony partnership. Philip formed alliances with Sony as it was running
the risk of being kicked out of the VCR market. Due to this joint venture, they
created a mini-CD which gained global recognition and created better footing
for both firms. (Pellicelli,2003)
Furthermore, it aids
in innovation. With Information System, companies can collect and analyse
information on products and services. Modern technology facilitates companies
in creating and developing novel products and services, creating a niche
market. (Atlaf & Khalil,2016). This can drastically impact business processes
and even nature of industry. Amazon, for instance, managed to enhance its
competitive advantage by introducing B2C e-commerce model. It also offered web
services for customers to access products. It is currently one of the largest
online e-commerce platforms. (Imran,2014)
Lastly, it also
fosters strong ties between the firm and key players. It is vital to strengthen
relations with key players such as customers and suppliers. Without them, it
would be impossible for a business to operate. Along with the above strategies
that help to create a competitive edge, fostering strong ties enhances this advantage.
This ensures brand loyalty and reduces bargaining power of them, aiding firm to
achieve economic success. One such company that does so is Cisco. It utilised a
specialised desktop application, Cisco Unified Personal Communicator, that can
only be accessed by Cisco partners for security services. By offering
reliability of services, Cisco ensures that the customers remain loyal to its
firms do gain from the use of IS, it is vital to note that improvements must be
made to the system as technology is rapidly advancing. Furthermore, to ensure
that IS is adopted successfully, it requires customer involvement and
appropriate use. Customers are needed to collect and analyse information to
improve business processes. Without them, it would be more difficult to
maintain a sustainable advantage even with the use of IS. (Madadipouya, 2015)
current times, it is acceptable to say that firms need to use IS systems,
However, it is key to align the technology with the business’s goals sand
strategies to ensures success in the long run.