Critical Elements Of Supply Chain Management

The Supply String Management is justification of the planning and controlling function of materials and stream of information and logistic activities of the business internally as well as externally. The framework of the resource chain management features key areas of provider and buyer romantic relationships that further include source base reduction, maintenance of long-term interactions, development of mix functional teams, communication and involvement of suppliers (PAULRAJ, 2004).

The author outlined several key forced that drives the maintenance of superior connections among the source chain members. Mainly, he stresses after environmental uncertainty arising as a simple problem. Also, internal corporate and business strategy and organizational composition also have an influence on success of such initiatives. The writer recognized the value of challengers' activities, support from top management and strategic decisions regarding purchasing over the potency of supply chain (PAULRAJ, 2004).

Critical Components of Supply Chain Management:

The elements are actually the approaches that are initiated by the firms and organization to handle supply chain management. These elements are evaluated carefully to derive its effect on the performance of overall resource chain process. They are really the following -

Strategic Purchasing:

The proper purchasing is thought to have an inert role in organizations and it is thought as the integration of interior as well as external functions pertaining to industrial purchasing by taking into consideration quality of purchasing done and measurement of customers' perceptions. It has resulted in achievement of breakthrough through advancement, proactiveness and risk taking. The initiative has also led to the establishment of cooperative associations with suppliers to adhere to the competitive stance (PAULRAJ, 2004).

Supply Management:

This area mainly focuses on the delivery of products and services to the distinguished customers and the region had increasingly received tactical importance and proper recognition through the years in large organizations. However, it is clear that selection of suppliers and suppliers' activities have a primary relationship on the price and quality of the products/services sent by the buying organizations. In that way, it is imperative to have an efficient two-way communication throughout the supply process. In addition, adoption of multiple resources for buying/purchasing in order to avoid dependency on the one supplier. This may further results in various benefits such as reduction of inventory management costs, achievement of economies of level and reduction in other costs. Also, collection of suppliers is the most critical aspect of the complete process that is needed to be treated skillfully and strategically as this has a direct impact on financial as well as functional function of the business enterprise (PAULRAJ, 2004).

Logistics Integration:

The logistics integration can be done both internally within the efficient boundaries of the company as well as externally to supply and send out products/services to the clients. The industry certainly requires advanced of integration especially externally and for doing so it's important to coordinate logistics activities with suppliers and customers (PAULRAJ, 2004).

Supply Network Coordination:

The researcher views Source Chain as a blend of three essential phases include procurement, creation and distribution which further includes of multiple facilities. With the help of numerical models and bullwhip models, the writer has researched several supply chain problems and issues including of - deviation in demand, scheduling, degree of inventory, volume of stages among the process, number of distribution centers, plants, volume of products and type of products (PAULRAJ, 2004).

Managing Supply Chain Relationships:

Success of supply chain performance is determined by the trust and determination established among source chain partners. For the purpose of sharing and launching financial or proper information to supply chain partners is largely reliable on the trust extending to the resource chain partners. The supply chain trust is largely related to investment in investments as well as behavioral doubt. The writer emphasized on the actual fact that showing of information ends up with the loss of behavioral uncertainty. At the same time, goodwill and trustworthiness of the firm is also considered important during building of trust and member's perceptions also have an effect on the romantic relationships of associates (Kwon & Suh, 2004).

With the use of conceptual and behavioral models, the author has also referred to that supply chain relationships are determined by the energetic knowledge management by the customers in marriage building. Thereby, the writer identified that interval training and education is essentially imperative during supply chain implementation (Kwon & Suh, 2004).

Large Organizations are located to be more collaborative than those of small or mid-sized firms and using contractual contracts at the time of getting into partnerships or collaborations. Resource Chain lovers throughout the resource chain process will work in integration on major customers' techniques as well as for the achievements of goals. The partners willingly discuss information about the near future plans or specs of designs or any information pertaining to research and development or competitive causes (Kwon & Suh, 2004).

The collaborative patterns results in engagement of supply chain partners in joint planning and moves beyond to the development of intensified relationships. The writer justified his fact by stressing upon the success of cost command in the procurement function and other revenue encouraging strategic initiatives (Kwon & Suh, 2004).

Determinants of Effective Supply Chain Cooperation:

With the partnering and cooperation of supply string members or organizations involved in the process requires the integration of several source string functions such as purchasing of recycleables, receiving of raw materials from throughout processing process to the syndication process for way to obtain finished goods and services to the customer. The author shown that the thought of collaboration is endowing organizations to attain better procurement, lower inventory costs, and lower operational costs (RAJAGOPAL, 2006).

The supply string infrastructure, move of information, writing of resources and organizational linkages are identifying the effectiveness of supply chain processes. From the information extracted from the investigation, circulation of information among the supply chain partners and their linkages are identified to be the most influencing and critical indicators having effect on of supply chain partnering and cooperation. On analyzing the case studies, the writer revealed that high level partnering is more effective than that of low scale partnering for the success of resource string partnering (RAJAGOPAL, 2006).

The field research resulted in the identification of several factors observed in the resource string performance of UAE food industry. The analysis is conducted within eight Businesses functioning in the UAE food industry from the mature managerial participants. The key determinants found own an imperative effect in the source chain performance. The top findings are provided in the following sections -

Inter-Firm Interactions:

Mutual Trust & Dedication:

The strength of relationships is maintained on the actual fact that the way the organizations are integrating vertically showing product information, and are experiencing determination and interdependency among one another. The durability is shown by the reviews of the participants of the analysis. The feedback of the members reveal that while coping with their suppliers for obtaining fresh products, it is important to maintain available connections with multiple suppliers owing to the emerging popular for quality on the market. Almost all of the participants emphasized on the actual fact they are must maintain permanent relationships in the process for mutual gain. The importance of maintaining permanent relationships may also results in negotiation of costs incurred in the business deal. Also, if not maintained effectively, it'll bring the firm in the collegial position and isolate from the rest of the chain. It was also driven that suppliers are ought to understand the view point of business of processors as well as business of retailers to encourage sharing of benefits and dangers in the resource chain.

Mutual Investment:

Mutual Investment by the businesses to handle the needs of providers, processors, retailers, market agents is obviously important for value creation at the time of transaction in source chain. This common investment would be further helpful in building new facilities such as warehouses that improves the safe-keeping or delivery of goods.

The knowledge stream in the resource chain process can encourage the complete process and it is carried out and transmitted by using technologies, such as Content Management System, Internet, and EDI. In addition, use of e-mails, bulletin boards and video meetings are also popular in many of the organizations.

The Knowledge Movement along the way of Supply Chain as determined through the field research is summarized below -

Supply Chain Process

Formally Structured

Informally Structured

Product Design & Development

Customer Requirements

Components Specifications

Engineering Specifications

Estimated Cost


Target for Quality and Cost

Innovative Concept

Relationship Management

Information on Potential Buyers

Corporate & Marketing Strategy

Product & Service Contract

Performance Specification

Market Power

Expected Service Level


Demand & Sales

Purchasing Information/Receipt of Order

Sales Proposal

Point of Deal/Key Customer Data

Response & Circuit Time

Order Fulfillment Rate

Sources of Demand variability/uncertainty

Bid Process

Product Processing

Production Plan



Inventory Level

Quality Plan

Efficient Consumer Response/Flexible Manufacturing

Demand Forecast

Technical/Special Skill


Shipment Plan

Delivering Plan


Logistic Process

Service & Support

Customer Grievance/Feedback

After Sales Service

Support for Product Consumption


Return Business Rules

Legal and Environmental Conformity guidelines

Return Rates and Business Impact

Effective return Process

Identify defective product/areas of improvement

The Companies have another group of folks for the assortment of data from the marketplace and also some are performing surveys to collect data.

The Firms are employing advanced technology to get access to the scanned data knowledge and are also formulating reviews for writing of common passions.

The purchased knowledge is effective in forecasting demand by lowering their inventory lead times and placing your order lead times which is also helpful at the time of negotiation from large consumers.

Use of Inter-Organizational System:

Several cutting edge and state-of-the-art solutions have been found in the supply chain processes and techniques by the UAE food industry companies with an aim to lower and decrease the cost. The success of the IOS use is relying closely on the sound inter-firm relationships. In the discussions placed with the concerned regulators of different businesses revealed the process of supply -

Automatic TEXTS are delivered from Transfer to Store for providing the loads.

The Buying System gets used and then incorporates in the machine installed in the machine.

EDI System is employed for attracting the orders and later gets included with the in-house developed computer management system.

Several insights were received that the IOS utilization results in reducing of costs by reducing lead time, exact estimation of inventory, requests needed and also in the distribution of products.

Compatibility Issues in IOS Usage:

Difficulty in integrating in-house installed computerized systems.

Difficulty arising at that time jogging of system by the consumers those who have access under the individual franchise contract.

Issues regarding software update, software set up and agreement for obtaining sales data back.

Uncertainties in the meals Supply String:

Demand Uncertainty:

The Businesses are must meet the contingencies arising anticipated to seasonal uncertainties, and have also concluded on the fact that they are ending up with backlog of stock or without stock credited to volatility popular.

Supply Chain Uncertainty:

Problem of derailment (de-railing of rail series for 5 to 15 times in a calendar year) occurring causing into the disruption of services, especially in perishable goods. Break down of manufacturer or any manufacturing facility also brings about the risk of uncertainty of timely supply. Uncertainty also develops for farmers those are responsible for the supply of good grains.

Product Perishability:

The product perishability has been commonly encountered by the companies as they actually have only few days for keeping the stock of such products and stay away from the degradation of quality or any code of expiry of such products. This doubt is largely affected by the demand and beneficial market conditions, eventually results in higher transactions costs for the company.

External Factors in the Food Industry Supply String:

Several dominating factors are influencing the source string performance within the meals industry in the UAE. They can be the following -

International Competition:

Presence of multinational competition such as Wal-Mart as the same high level of quality of the food products offered in their supermarkets is should be maintained and that is what the customers choose or buy. Due to the growing market talk about of such brands, it becomes vital to track their activities.

Policy of Technology Use:

Making use of technology within the procedure becomes a skeptical concern in conditions of affordability, though presence of obvious benefits in the production. Problems in adaptations brings about the increase of inter-firm exchange or collaboration costs.

Environmental Concerns:

Insights gained regarding environmentally friendly concerns focus on on the handled use of energy and electricity, use of diesel, petrol and kerosene and carbon footprints which is very critical.

Trading Legislation:

Several governmental rules certainly affect the supply chain process in conditions of economic viability, balancing of wellbeing and bringing about reasonable trade on foods. In additions, impact of deregulations was also regarded as a major concern to accomplish a competitive edge in the market.

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