Considerations in Creating an Effective Supply Chain for a Company

Questions: 1.Describe some of the Considerations in Creating an Effective Supply Chain for a Middle Eastern company.2.What Challenges might the Company Face in terms of Complexity? Answers: 1.Considerations in creating supply chain A supply chain refers to the systems used in the production process of product and services; they include people, activities, resources and information. It flows flow the suppliers all the way to consumers(Wieland Wallenburg, 2011).Companies should considerputting into consideration the factors below in order for them to avoid getting into challenging situations, these are pre-planned and they ensure that the company maximizes on the Return on Investment. Middle East Companies most of which are in the gas and oil businesses should consider the following; Stakeholders readiness - Most companies in the Middle East still use manual procure-to-pay activities manually and are currently going digital by introducing automation, these changes can pose challenges to companys team members, and negatively affect their motivation and morale to work. These can be avoided by establishing how willing the stakeholders are to adjust to change and incorporating them as part of the system to avoid negativity and resistance(Jacoby, 2009). According to (Blanchard, 2010) the supply chain priorities should be established in line with other company initiatives. Members allocated roles in the system, should as well establish if there is any part of the company that will be affected either positively or negatively. If any the impact should be discussed and controlled before setting up the chain supply. Suppliers - supply chain should feature suppliers to the company. In setting up a supply chain considerations must be laid on the different suppliers of materials. The chain should incorporate a strategy for improving the company-supplier relationship. In Middle East for example, oil and gas companies should consider the performance and reliability of different contractors before coming up with their chain of supply(Hines, 2004). People and talent - an effective supply chain must consider having the right talent within the company. Due to aging and fatigue the human resources abilities decreases each day. The company should therefore come up with a new strategy of evaluating the workforce regularly. There must also be proper and well planned recruitment of staff. Technology - before setting up to a supply chain companies should consider having an innovative technology platforms, companies in the Middle East majorly ship their products to other parts of the world majorly African countries, this means that the supply chain must consider choosing a cutting edge technology which will assist the company to optimize its potentials. Key functionalities and ROI requirement - Consider what the chain needs to achieve and the time it will take to pay its own expenses, any other needs such as performance metrics, and support for mobile devices among others. ERP Solutions - Consider the advantages and disadvantages of using the chain, and how well the ERP suits the supplier integration portal. Before setting up the supply chain the companies should consider their ERPs, those will help them consolidate to supply chains which are in line and can handle the diversity of the ERPs. ERP Integration with 3rd party solution - before setting up any supply chain system the company should see to it that the systems have necessary tools, frameworks and IT resources to help in the integration process. It takes quite some time in establishing how well the system can be integrated. Therefore, takes long before implementation of the supply chain system. The team should consider solutions that can smoothly work along with XML, EDI, and CSV among others, and use HTTP, FTP, and AS2. They should have as many options as possible, to increase the chances of compatibility with available systems in the organization. Consideration of how the existing data will be incorporated in the system should be made as well(Handfield Nicholas, 1999). 2.Challenges facing supply chain Supply chains complexity arises due to presence of several variations on the supply system. There are three aspects of complexity which most companies face in the supply chain. These are administrative complexity, and operational complexity. Companies face a number of supply related challenges which lower or hinder the effectiveness of the supply chain. These challenges range from global competitions, changing customers expectations, and increasing complexity in the consumer demands. These challenges are discussed below; Pressure from global competition - there are competitors arising every single day, most companies are going global, this makes it complex creating a supply chain as the chain must consider and be in a position to handle the issue of global competition(Handfield A. W., 2013). Regardless of their physical locations there are several other companies competing on the same line. Changing levels of globalization makes it hard to manage supply chains as they have to be adjusted from time to time(Marcus Noland and Howard Pack, 2007). Rising consumer expectations - consumer expectation is and will always remain a complex issue. In any organization supply chains are always affected when the demand interests of customers change. Costs of risks management - risks are on the rise worldwide, ranging from terror attacks to natural disasters, these risks when they happen affects both the business and its supply chains, to manage these risks the companies are faced with changes of additional costs which might not have been planned for(Yucesan, 2007). However, the costs of ignoring these risks would be higher than that of managing them hence they should be managed at all costs Infrastructure - complex supply chains requires some drivers to be implemented. Companies are faced with the challenge of identifying such infrastructure and acquiring them takes the company back to the issue of increased costs. Lack of proper planning and coordination among the supply tiers - According to(Cooper, 1997) for companies to fully commit to customers needs and demands, various supply tiers existing in the company must coordinate and function as one towards the same goals. Unfortunately for our companies this is not the case. Most lack a comprehensive coordination between the relevant tiers hence no effective supply chains. The challenge arises when companies cannot synchronize demand and supply due to lack of timely and accurate data from the supply chain parties. This makes them to turn to online portals which cannot be fully relied on. Conflicting KPIs - presence of KPIs which are not similar is challenging as it discourages efficiency of the supply chain. Key players in the supply chain alignment fail in matters of what is being measured and the measurement tools results to conflicting KPIs. This makes supply chain more complex in the long run and difficult to manage(Simchi-Levi D., 2007). Constrained capacity; its known that complexity exists, indentifying existence of it is not a challenge any more, the challenge lies in the ability the companies have in managing the complexities , most companies have limited abilities to manage the chains complex matters. Inability to link product design, the manufacturing, and fulfillment within the supply chains - due to complexities in the supply chains, it is quite hard to link the above three aspects of supply chains. Companies are faced with the challenge of increased competition on product innovation and customer service improvement. To deal with this challenges companies should establish a close coordination with all their manufacturing partners and improve on product specifications to help break the launches of new products. Borderless global and weak economies - According to (Richards Waterbury, 2008)global economies are faced with diverse logistics and several transportation options that requires the organization to decide on the bests means to use and remain competitive. Most world economies keep on fluctuating, at times getting weak. Weak economies are on the rise due to complications on the supply chain systems. Companies operating in weak economic countries mainly are faced with complexity challenges for their supply chains. Others factors posing challenge on global economies are; port strikes and natural disasters all of which cause unpredictable influences on the supply chains. Diverse Technological changes; the changes in technology is very diverse, this leads to informational complexities as the companies must keep on establishing current information (Movahedi B, 2009), as a result of this its impossible to always acquire accurate information, this thus brings in the challenge as organization requires this information in order for them to remain competitive by having functional supply chains(Hackimian Nugent, 2004). In conclusion its important for the companies in Middle East whether small or large to consider all the factors that might affect their supply chains, whether in the short term or long term. In as much as there is room for ignoring them, the impact might not be felt in the early stages of the process. But they will appear in the course of running the system. Thus these considerations should be made at the initial stages of chain creation as well as provide for early solutions in case a problem arises in the course of operations. 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