Q: 1) Do you think Supply Chain and Supply Chain Management Same?

Explain according to your own

Understanding.

How Company getting Competitive Advantage through Supply Chain?

Answer: No. Supply chain and supply chain management are not same.

Supply Chain- Supply chain is the network of organizations that are involved through upstream and
downstream linkages, in the different process and activities that produce value in the form of product or
service in the hands of customers.

The objectives of supply chain are maximize the overall value, looking for sources of revenue & cost,
minimizing of cost, creating supply chain surplus.

In supply chain all parties are involved directly or indirectly for fulfilling a customer request. It includes-

Product raw materials Process Finished Goods Wholesaler Retailer Customer

Example: For Ready-made garments (RMG) industry, upstream includes cotton produces, threads, fabric
and downstream includes distributor, customer.

Supply Chain Management- It refers to the management of upstream and downstream relationship with
suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.

Through controlling the supply chain, companies can cut the unnecessary costs and deliver goods quicker
to the customer. That is achieved by keeping the corporate inventories, internal development, distribution,
sales, and business suppliers inventories.

It refers lower purchasing and inventory cost, improve product quality, better customer service, improve
product availability, understanding customer need, improve productivity, create supplier partnership,
improving process design.

Example- In the Coca Cola company, key drink concentrates manufacturers, advertisers and retailers, and
non-alcoholic syrups. The headquarters are based in Atlanta, GA but their goods are sold to almost every
country in the world. When it comes to the delivery of their goods, their planning, distribution and
transportation logistics are in line with a segmentation approach for their customers.

Answer: Company getting competitive advantage through supply chain. Now describing this-

 Competitive advantage gaining through cost advantage and differentiation advantage.

1) Cost Advantage: Lowest cost structure vis-à-vis competitors allowing price flexibility & higher
profitability. Example: In this case, company sells products at the same price as competitors but
reaps higher profit margins because of lower production costs. The company that tries to achieve
cost advantage is pursuing cost leadership strategy. Like - Amazon.com
2) Differentiation Advantage: Features important to customers & distinct from competitors that
allow premium pricing. Example: Differentiation strategy is used in this situation and company
positions itself more on branding, advertising, design, quality and new product development
rather than efficiency, outsourcing or process innovation. Customers are willing to pay higher
price only for unique features and the best quality. Like -Apple Inc. or Starbucks.

 Another is value chain model from Michael E Porter’s Competitive Advantage-

1) Primary Activity: It includes basic functions. Such as

 Inbound Logistics- It refers to the transport, storage and delivery of goods coming into
business.
 Outbound Logistics- It refers to the same for goods going out of business.
 Operations- The process whereby resources are combined and transformed by a
controlled manner to add value.
 Marketing and Sales- Sales refers to all activities that lead to the selling of goods and
services. Marketing is the process of getting people interested in the goods and services.
 Service- Service is intangible in nature.
2) Support Activity: Support is need for ongoing primary activity.
 Firm Infrastructure- For an industry, warehouse is firm infrastructure.
 Human Resource Management- There need top, middle and low level management.
 Technology Development- For ongoing business, technology is needed.
 Procurement- It is the act of obtaining goods or services for business purposes.