Strategic Organizational Supply Chain Management And Logistics

Running Head: SUPPLY CHAIN MANAGEMENT

Strategic Organizational Supply Chain Management and Logistics

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Institution

SUPPLY CHAIN MANAGEMENT

Introduction

Logistics are some of the most important departments in the running of any successful

organization. In real sense, logistics exist hand in hand with the issue of supply chain as they are

closely related to each other. The purpose of this paper is to expound the learner’s understanding

of strategic organizational supply chain and logistics using the case of a random organization that

uses traditional methods of procurement. The paper will further seek how supply chain

management affects the overall performance of the whole organization, the role of IT in

procurement as well as what can be done to improve the effectiveness of the organizations

supply chain management.

The Case of Celonis

Celonis is a private procurement company operating in Germany. Founded in the year

2011, the company actively conducts procurement processes by connecting buyers and sellers

from across the globe. However, just like any other company that is conducting procurement

processes, the company has faced the challenges arising from a fast rising technological growth

(.Edquist & Hommen, 2000). Its traditional methods of procurement require are visit in order to

allow the company operate using the healthiest approaches in the procurement industry.

The company’s procurement process is like of any other traditional company. Although

they have tried to incorporate information technology in the whole process, they still have a large

gap to fill in terms of technological fulfilment.

Commonly, traditional purchasing involves direct negotiation with the suppliers to ensure

that the right prices are set for a given product. Where the company requires a lot of products, it

contacts a lot of suppliers to get the best prices, in order to save the amount spent.

SUPPLY CHAIN MANAGEMENT

Why Celonis should adopt IT based procurement

Effective supply chain management is very important when it comes to organization

achieving its business goals. According to Zhang & Whu (2013), the success of any business

relies on its supply chain management. An efficient supply chain management is essential as it

boosts the services offered to customers. This way, customers are always assured that the

company will deliver the right product at the right product. As a result, the client relationship is

strengthened and customers are likely to return to the business for more services.

Similarly, Celonis should adopt an IT based purchasing process as it reduces the cost they

incur during purchases. Whereas the traditional purchasing process involves a lot of consultation

and distribution of resources to different sellers, the IT based approach centralizes the whole

process, reducing the whole supply chain costs.

Supply chain and Business Functions

Supply chain is closely related to business external environment (Pagell &Wu, 2017).

With the help of supply chain, Celonis can easily understand its business environment. The

whole business of Celonis is tied to its supply chain as its customers and suppliers are fully

involved in the business functions. Without either of the parties, the supply chain would break.

Key drivers for achieving an integrated supply chain strategy in Celonis

With the increase in the supply chain innovation speed, companies need to check and

scrutinize a number of the factors which are essential. Factors such as costs should be a topic of

scrutiny. Additionally, the company should look at its key business drivers.

SUPPLY CHAIN MANAGEMENT

Customer Management process is the first driver in any supply chain business. This is

because the source of customer information is got from customer service. First, the company

should set goals which appeal to the customers and the organization, set a strong client

relationship and build positive emotions in the organization and among the customers.

The company should also look into its supply chain management and ensure that their

suppliers meet an international standards. Additionally, they should ensure that while they get

products at reasonable prices, the whole relationship between the two should be a win win for

either parties.

Effectiveness of strategies used by an organization to maintain supplier

relationships

Efficient supplier management is essential in any manufacturing company. a company

with good strategies of maintaining its suppliers is always full of sourcing options. Contrary to

the traditional supplier relationships, the urbanized relationships remain a better option for the

success of the business-supplier relationship. Research shows that although there can be

alteration in the relationships where the companies have urbanized it, the strategy leads to

development from outside and leads to the increase in acceptance of best practices in the whole

process.

Use of IT to create strategies to develop an organization’s relationship with its

suppliers

IT is important in various ways. First and foremost, the system is essential in cutting

down the prices of the whole process. When the costs between the company and the supplier are

cut, the buyer is favored and tends to maintain it.IT is also essential for analyzing actual market

SUPPLY CHAIN MANAGEMENT

trends before making a decision, predicting and responding to changes in demand of the product,

forecasting inventory planning, and assists in analyzing the history of sales performance, which

helps in evaluating the forecasts for different suppliers.

Develop systems to maintain an organization’s relationship with its Suppliers

To develop a system that would maintain the relationship, the organization should always

develop an understanding that the way their supplier works gives them a sense of how it can

benefit their business. Additionally, the company should utilize the strategy to enhance their

relationship with suppliers. It should be ready to understand their partner’s plans in the future,

should always place orders at the most appropriate time and pay on time. All these strategies are

essential in maintaining the relationship.

The Role of IT in supply Chain Management Information Technology would assist in

several ways during the process of supply chain management. First, IT would help in changing

the source of manufacture. It would be essential in the sourcing of products.

IT based strategy is also essential as it assists in the record keeping. It controls the

inventory keeping and helps in monitoring the holding and ordering costs which can be reduced.

Since IT based supply chain management is able to monitor the market prices, the

management is able to change the product prices according to the market trends.

How IT has contributed to the management of the supply chain of an organization

IT has contributed a lot to the management of supply chain in any organization. Firstly, it

plays a critical role in availing information to the managers easily (Peano et al., 2017).This is

SUPPLY CHAIN MANAGEMENT

contrary to the paper based method of sourcing information. A fast exchange of information also

contributes to faster processes in the chain, customer satisfaction and increased sales volume.

Effectiveness of information technology in managing the supply chain

Some of the companies that have adopted IT in their supply chain have seen how

effective it can be.IT has the ability to enable businesses solve the e business problems, enhance

efficiency in business activities which brings up courage to operate in riskier business activities,

and so forth. Use of IT also improves the quality of information shared between partners and

enhances the process of supply chain.

The role of logistics in supply chain management.

Logistics play a very important role in surmounting business activities. In a traditional

approach where businesses have to locate goods and services from across the globe, the process

becomes time consuming.

Logistics management has become the most common approach. It involves the flow of

goods from the source to where they’re required. The biggest role the logistics management

plays is optimization of time and resources as it reduces the costs that would have been incurred

within the supply chain management through the management of materials, channels, and

distribution.

Procurement Practices

Procurement is a process that involves a lot of practices. Such may be involved in

different processes. During a pre competitive approach, the organization may provide support to

the sources of their raw materials by providing trainings on production.

SUPPLY CHAIN MANAGEMENT

During the competitive stage, the company may team up with the highest consumers of

their services to provide exclusive procurement services at a discounted prices.

Factors that must be considered when improving logistics and procurement

practices

Some of the factors that can be considered to improve logistics include effective order

processing, low transport costs, good inventory management and effective handling and

management of warehousing to avoid losses, proper material handling to improve logistics and

make procurement easy and sound packaging of goods which allows procurement to be easy.

Similarly, IT integration in all sections of procurement improves logistics.

Strategy to improve an organization’s supply chain

In order to improve the supply chain, there should be a clear strategy. One of the most

effective strategies is the reduction of costs. The strategy should consider reduced costs of

operation. Secondly, an effective strategy involves time reduction between the processes

involved, to make supply easier. Lastly, the strategy must be value oriented and should ensure

that production is acquired efficiently.

How a supply chain improvement strategy will benefit overall business performance

Improved supply chain management will benefit the business in various ways. First,

improving the chain would favor the stakeholders and as a result, would build more trust.

Similarly, it will lead to efficiency and reduced costs. Improving supply chain management will

also help in increasing customer satisfaction.

How barriers will be overcome in an organization when implementing a supply chain

improvement strategy

SUPPLY CHAIN MANAGEMENT

During the implementation of the process, the business may face a number of setbacks

resulting from barriers which may interfere with the process. However, the business must

overcome them.

Satisfying customers. The supply chain of Celonis is centered on customer satisfaction. In

order to overcome the problem of not satisfying them, the company will need to manage their

customer service in order to enable them get feedback from their customers on how they could

improve.

Simplicity. The company will also reduce the complexity of the whole chain. All the

processes will be made easier and concise in the chain of Celonis.

The barrier of uncertainty will also be reduced using the improved forecast of the market

trends. This forecast will be important in managing the prices of the products for a more customer

satisfaction.

Conclusion

To conclude, it is undeniable that supply chain is important in any business as its nature

closely determines how the business succeeds or fails.

SUPPLY CHAIN MANAGEMENT

References

Edquist, C., & Hommen, L. (2000). Public technology procurement and innovation theory.

In Public technology procurement and innovation (pp. 5-70). Springer US.

Pagell, M., & Wu, Z. (2017). Business implications of sustainability practices in supply chains.

In Sustainable Supply Chains (pp. 339-353). Springer International Publishing.

Peano, C., Girgenti, V., Baudino, C., & Giuggioli, N. R. (2017). Blueberry Supply Chain in Italy:

Management, Innovation and Sustainability. Sustainability, 9(2), 261.

Zhang, W., & Wu, X. (2013). The importance of supply chain management. International Journal

of Business and Social Science, 4(16).

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