Supply Chain Management And Competitive Advantage

INTRODUCTION In todays competitive environment, business strategies are built around the concept of competitive advantage of a company. The concept of competitive advantage has been discussed by many scholars such as Li et al (2006) who stated that the capacity of organizations to create and maintain their defensive positive is due their competitive advantage. The concept of supply chain management was derived from the formation of supply chain networks, which consists of individual companies linked to each other for providing information and resources to produce a final product and to accomplish the objectives of managing the suppliers efficiently (Lau & Lee, 2000). Supply chain management (SCM) is an ongoing concept that helps to achieve …show more content…
These supply chain networks optimize the flow of materials and services, money and information. Supply chain networks focus on the ultimate customer or user of the product. They are designed and managed so that one member does not benefit at the expense of another. The main focus of SCM is to make sure that companies are utilizing the technology, processes and capability to enhance their competitive advantage and that both the material flow and information are integrated seamlessly across the supply chain network. This way organizations are able to smoothly execute its operations while delivering quality and maximizing the value for the end customer (Al Mudimigh et al., 2004). Supply chain network involves manufacturers, suppliers, retailers, warehouses, customers and transporters with a sole purpose of maximizing company’s earnings while creating value for their customer by improving the bottom line. There are two factors that control the bottom line of a company are sales and costs. Supply management has the capability to drive sales up and costs down in an ethical manner which impacts on the firm’s shareholder …show more content…
In many cases, the first firm to introduce a successful new product or service will hold most of the market share after competition enters the picture. This research also demonstrates that the profit margins enjoyed by the first firm to introduce a new product tend to be twice those of its competitor (Robert & Bradley, 1987). Firms which have embraced that supply management activities are critical for their business have reduced their new product development cycles by an average of 30 percent as a direct result of a cross functional approach to product development (Clark & Fujimoto, 1991; pp. 67-95 & 136-146). Purchasing and carefully selected suppliers are key members of these cross functional