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Advantages and disadvantages of supply chain operations:

ADVANTAGES:

 A better quality of life

 Wealth creation
 New and innovative job opportunities (EG- telemarketing)
 Reduce cost by improving inventory systems, Adjust the storage space for finished goods which
eliminated damaged resources; improves systems responsiveness to customer requirements;
improves relations with vendors and suppliers
 Increase output – improvement in communication allows for improvement in the coordination
and collaboration which shipping and transport companies, vendors and suppliers

DISADVANTAGES:

 Globalization ( the movement of goods, services or people across the world)- suppliers in different
geographic locations complicates the supply chain. Companies have to deal with, coordinate and
collaborate with parties across boarders regarding manufacturing, storage and logistics. Businesses
also have to maintain real time visibility into their production cycle from raw materials to finished
goods to ensure the efficiency of their manufacturing processes
 Counterfeiting- making false parts/products and selling them in place of obsolescent products
 Product complexity- the number of parts or components required to produce the product must be
available on time/ on schedule for efficient production, if any part of component is missing, then the
good cannot be manufactured as planned

Seises to be usesful, productive or compatible. Change continues to create challenge related to

obsolescent of products or components or parts as they may become outdated or useless very quickly

 Regulatory complexity
 Management blunders- if management doesn’t order the correct components; the quantity
ordered wasn’t enough: inferior materials
 Changing market conditions- products have shorter life cycles due to rapidly changing market
demands
 Natural disasters
 Political instability- the propensity for regime or government change political upheaval or
violence is society or instability and uncertainty such as regulatory tax or human rights law. Any
political shift triggered by one of the aforementioned can affect the supply chain
This can affect global supply chain with varying degrees of damage to the organization and the
economy. It can mean delivery delays and rerouted resources when political unrest occurs
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The impact of logistics and supply chain operations on the competitiveness of

business:
A:
 Logistic improves competitiveness - businesses tend to source raw materials or components
in global markets thus they are able to efficiently outsource raw materials needed to
manufacture or produce the goods and services
 Through outsourcing businesses enhanced their competitiveness by being able to trade goods
and services on a timely basis both locally and internationally

OUTSOURCING- having certain job functions done outside a company instead of having an inhouse
department or employee handle them

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B:

 Competitive advantage- An advantage the business has over competitors gained by offering
consumers greater value either by means of lower prices or providing greater benefits and
services that justifies higher prices
 By partnering with businesses through logistics and supply chain will allow for optimal
performance of the business resulting in the company achieving greater profitability and
increased market share and thus gaining a better competitive advantage
 For a business to achieve competitiveness advantage must differentiate itself in the eyes of the
customer from its competitors and operating at a lower cost and hence a greater profit
 Comparative cost advantage through outsourcing comparative advantage is when one
country can produce a good or service at a lower opportunity cost than another. This
means that the country could produce that specific good or service relatively cheaper
than other countries

I second party logistics- an asset based carrier which actually owns the means of
transportation for instance shipping lines which own lease or charter their ships, airlines or
trucks which own lease or charter their airplanes or trucks etc.
Third party logistics- A Firm that provides service to its customers of outsource or third party
logistics for part or all of their supply chain management function. These providers typically
specialize in integrated operation warehousing and transportation services that can be skilled
to meet their customers needs
Forth party logistics- when a company uses an integrator that brings together resources,
capabilities and technologies to streamline the design and execution of a company’s supply
chain
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Read section 13.7