Society Publishing Logistics and Supply Chain Management: Moving Towards Integration

A couple of decades ago, few companies focused on supply-chain management and logistics. Because of globalization, distribution enjoyed much of the focus. Various techniques and methods were developed to control costs and to improve sales. These past 20 years have seen growing understanding and focus on supply chain management. Today, Supply Chain Management and logistics are considered mainstream in strategic planning and decision-making. Supply-chain and logistics management is leveraged to attain competitive advantage. Traditionally, the aim was to reduce costs by achieving economies of scale. However, today the focus on value creation and its delivery are in focus. Another significant change is of managing relationships with all partners of complex network chains. We may be right in saying globalization has fueled intense market competition, which has further made the markets volatile, uncertain and dynamic. These dynamic and uncertain markets demand companies to cope-up turbulent markets. Hence, companies acquire flexibility and responsive supply chains. As the actual costs of satisfying the customer are usually considerable, it is difficult to calculate these costs. Some costs are tangible and others intangible. As the costs vary company to company, sector to sector, industry to industry and region-to-region, the total costs of Managing logistical operations is 10% of total gross domestic product (GDP) of United States of America (State of Logistics). The aim and objective of a supply chain is quite simple: to match supply and demand. However, given the uncertainties it is a difficult task to achieve. Uncertainties and vast marketplace today makes it strenuous to conduct the business on forecasts. The product lifecycles are getting shorter, huge demands with variety and competitive pressures demand companies to be innovative and be able to respond to changing demands of the market in a faster way. To achieve this, companies have to be agile (adjusting to market quickly) in their processes and organizational structure. There is another technique developed by Toyota in Japan famously know as Lean Technique where companies try to have just-in-time deliveries. The aim of lean management is to eliminate waste and reduce inventories. `Time is money’ is a cliché well versed over the world but it does hold true in business, even more for logistics management. There is a direct proportionality between the length of supply chain, inventory and cost. Companies having longer lead times are less responsive and have potential risk of losing sales. Supply chains traditionally were a group of disconnected departments, processes, activities and elements. Internal elements off of a supply chain followed a philosophy to optimize departmental efficiencies. This created gaps and differences between functions on the entities of supply chain. A smaller end-to-end supply chain is competitively easier to manage and is responsive. Information plays a vital role in making a supply chain responsive. Sharing information helps integrating supply-chains; it improves coordination and collaboration. We discuss in this book how supply chains have transformed into demand chains or supply networks. Companies guard core activities and outsource the rest. Thus, to manage this complex network, information flows are necessary. Information technology helps connecting and linking activities, processes and entities in a supply chain. Making use of technology processes are simplified reducing lead-times considerably. Information Technology helps installing information systems, which can not only improve information sharing in quick time but also analyze the data. Information systems can help in making rational decisions based on marketplace information. This further enables companies to respond to customer demands and market fluctuations in a timely manner. Supply chains are no longer a group of independently working entities; current supply chains are integrated set of processes and activities, which function in a synchronized manner. Companies source worldwide, they have the facilities like manufacturing, distribution offshore this makes it difficult manage the entire supply network. Although, globalization offers larger market space, it comes with a few challenges. Markets across the world vary and companies have to categorize and design products as per regional requirements and demands in each place. This requires excessive coordination and collaboration to manage logistical and supply chain activities. To be successful in current turbulent markets, companies need to transform their organizational structure, strategic, managerial and operational level planning. Many leading companies have radically redesigned processes to achieve significant results. Shortening of product lifecycles, has made time to market a very critical factor. Just in time and flexible manufacturing enables companies to produce as per fluctuating market demands,