You are on page 1of 12

Issues in Supply Chain


Amit Kumar Giri

Issues of S.C.M.

The supply chain management

issues concern activities of the
firm at various levels of decision
making, ranging from
operational level to strategic
level via tactical level.
The strategic level :

The decision making at this level is made with

long term objectives and with long lasting
effects. These include decisions regarding
location of various facilities, including the
manufacturing plant, distribution warehouses
and the structure of the distribution channel.
The tactical level: 

Decision making at this level is concerned

with purchasing and production functions,
inventory policies and transportation
strategies. These decisions will be usually
updated on an annual basis.
The operational level:

   Decision making at operational level will

concern day to day management of activities
such as scheduling, routing and vehicle
loading etc.

The key issues in contemporary supply chain

management are :--
Configuration of distribution
network :
• This issue deals with the design of a
distribution network to serve a specific
market. This will consist of a set of
warehouses and retail outlets, together with
the manufacturing plant and supply sources,
based on consideration of location and
capacity of each of these elements. This will
also determine the level of service available
to the customers.
Inventory control:
   This is concerned with the levels of inventory to
be held at various points in the supply chain. As
inventory represents costs, the sensible
approach is to hold as low an inventory as
possible but businesses are forced to hold
inventories as a buffer to counter the affects of
an uncertain demand. This is one of the key
issues in supply chain management.
Distribution strategy:

  The distribution strategy is concerned with the

distribution of the firm's products. There are
several strategies available such as the
classical distribution strategy or direct
shipping. Which one is the best suitable for
the firm to achieve its supply chain and
corporate goals?
Supply chain integration and
strategic partnering:
•  This is concerned with the complex issue of
strategic inter organizational partnership for
achieving competitive advantage. This is
about sharing of information and efficient use
of the information for coordinating business
processes to deliver a superior value to the
customers. How to achieve this and what are
the challenges? This is one of the emerging
issues in supply chain management.
Product design: 
 This is concerned with the design of the
product and its impact on total cost of the
product. It is possible that the design
determines the strategies to be followed
regarding inventory or transportation. The
design may also determine the length of the
product life cycle and the extent of
uncertainty associated with demand for this
Customer value: 

 The key issue is the definition of customer

value in an age of increasing consumer
power. How will supply chains will be
designed to provide value to the customers
and how will firms define value?