Why strong supply chains matter in today’s business world

The modern concept of supply chain management resulted from the recognition that supply chains are most effective when supply chain processes are not only managed together within a company, but managed across firms externally, says Garland Chow, director of the Bureau of Intelligent Transportation Systems and Freight Security and an associate professor of operations and logistics at the University of British Columbia’s Sauder School of Business.

“Supply chain processes are core to any business,” says Dr. Chow. “Any company can improve its competitive position by managing the supply chain process together across the firm rather than as individual silos.”

He points out that practically every product that reaches a consumer is the result of the collective effort of multiple organizations.

“The modern supply chain is a network of companies where each is somebody else’s customer or supplier and the ultmate goal is to provide the final customer with the right quality product at the right cost at the right place and time,” adds Dr. Chow.

Supply chain management is more important today than ever as companies continue to specialize in what they do best and purchase, outsource or contract out to other companies what they can’t do as well, he says.

“Globalization of the supply chain is inevitable as companies discover growth opportunities outside of their domestic or regional markets,” he adds. “Globalization has also been greatly enabled by the removal of trade barriers, the development of low-cost communications and Internet, and efficient transportation between countries.”

However, trade is a “two-way street,” says Dr. Chow, leading to more competition from competitors in other countries.

“All of these trends have made supply chain networks in many industries increasingly complex, extended and facing more intense global competition,” he says. “Now more than ever, there is need for co-ordinated and collaborative management of the supply chain and supply chain processes.”

View full report online at supplychainfeature.scmanational.ca