SUPPLY CHAIN MANAGEMENT

Supply Chain Management



Supply Chain Management

Introducton

Logistics is all-encompassing throughout the organization. It includes everything from the moment a product or service needs to be made, through to incoming raw materials management, production, finished goods storage, delivery to the customer and after-sales service. Indeed, the most common definition of logistics reflects this: a time-based activity concerned with the profitable movement of information and materials into/through the organization and out to the customer. Logistics spans everyone's territory, although the accountabilities and responsibilities are not so clear. It is best considered as an activity rather than a function.

Capital investment in infrastructure is likely to be outpaced by demand, despite the government's aggressive plans. As consumer demand accelerates and becomes more sophisticated, requiring wider product ranges, higher quality and better service, the demand for improved logistics capacity and capability will continue to rise.

Despite these barriers, China has a desperate and growing need for efficient, reliable, high-quality logistics providers operating on a national level. A broader and higher level of logistics-service performance is becoming of increasing importance; quality and value provided in transport and warehousing are receiving greater attention.

Discussion

Day suggests that the view that managers are resistant to change is untrue. It is not the change they resist, rather it is how change happens. When new initiatives or proposals are not adopted it is usually because something has gone wrong in the process. No director is going to refuse to consider a great idea that will make the company profitable on the grounds of resisting change. Logistics managers need to make senior managers care. This means understanding the current status and the impact that the proposed changes will have. Often, directors are only interested in a few issues (customers, competitors, costs) and developments in logistics should be seen in these terms. How, for example, will a new transport system improve customer relationships? Communication is important too: senior management will not be impressed with jargon; keep it simple. It is also important to remember that change and innovation involves risk. The goal is to minimize that risk in the eyes of management.( Franke 2010 36)

In China, where economic growth has strained the logistics infrastructure to breaking point, those foreign companies who can develop the means to deliver the goods stand to gain substantial competitive advantage, enabling them to generate real growth from this huge market. A successful growth strategy in China will require understanding of current realities and the vision to help build the logistics infrastructure of the future.

Legal and bureaucratic hurdles abound: navigating through the Chinese bureaucracy and its licensing and approval procedures remains a difficult and time-consuming task, complicated by rapidly changing rules. The time and resources needed to train staff to world-class quality methods adds significantly to costs. Finally, understanding the Chinese culture poses one of the most perplexing barriers for many foreign managers. Developing a network of “guanxi”, or relationships, is usually essential to penetrate bureaucratic walls. Establishing and maintaining credibility is especially important as mistakes, especially those committed ...