SUPPLY CHAIN MANAGEMENT
INTRODUCTIONAND GENERAL OVERVIEW OF
The channel of distributionfor a product determines the success of a particular product in themarket and its long-run effects in the market. Consumers’ prefers achannel of distribution that is convenient, timely and costeffective. Furthermore, they want a channel that is reliable andwould give them provide the commodity when and when they want it. Itis, therefore, that those tasked with the responsibility of supplychain management draft strategies that would be able to meet thecustomers need in terms of providing place utility (Gattorna,2003). Place utilityrefers to the filling in of the gap between the place and venue wherethe product is produced and taking it to the place where consumersneed it. It is for this reason that the supply chain managementfunction of an organization become to be considered among the mostvital function. Meeting demand for the goods depends on the qualityand availability of a reliable supply chain management. Determinationof a supply chain management strategy is the responsibility of thesales and marketing department of a particular organization. Thefunction, hence, plays a major role in placing the organizationproduct in the market and the determination of dependency for forgingof a long-lasting relationship (Jacobs,2011).
A supply chain refers to aroute taken by goods from the time they leave a producer to the timethey finally get to be bought by the final consumer. These routesdetermine the effectiveness and enhance distribution of goods in themarket to the consumers. Distribution of goods is very importantsince it enhances and strengthens the consumer’s loyalty toward thegoods. Consistency is very important as far as supply of products tothe market is concerned. Consumers would prefers to consume aparticular good as long as it is available in the market. To maintainthe existing demand, the producers ensure that they select a chain ofsupply that will ensure goods reach consumers in time and every time.The function of supply chain management was. Therefore, put in placeto determine, select, and manage these supply chains in order tomaximize the benefits for an organization. Supply chain managementare systems established by the organization to help in function ofidentifying, selection, analysis and management of supply chains ofan organization product so as to ensure that they are in line withthe overall organization objectives. No single method or chain ofsupply is appropriate for all markets, and it is proven that verymany factors will determine the supply chain adopted by anorganization. It is the role of supply management functions todetermine these factors and determine the optimal combination thatmaximizes the value (Poirier,1999).
RECENT DEVELOPMENTS IN SUPPLYCHAIN MANAGEMENT
In the recent world, the roleof supply chain is taking a paradigm by increasing its scope byincluding innovations and methodologies brought about by the recentchanges in technology. To determine these new developments relatingto the retail market, technology will be among the most recentrecognizable. In the recent days, most people have gone on andstarted on-line shopping. E-bay has, for instance, changed the waypeople buy goods in the market. By just clicking an icon on thecomputer, a person places an order, and the same will be delivered tothe customers’ as soon as possible. This is called virtualshopping. Payment are done through electronic means by use ofMasterCard, Visa, and even PayPal. Products and services can bebought from any part of this world no matter where in the globe youare. It has eased the role supply chain management as all that isrequired is to place the items on the Internet. The customers thenbrowse the net and can easily get what they want (Ravindran& Warsing, 2013).
Another development that hastaken place in the last five years is perhaps the ability to traceparticular store or retail point using the Internet in the Goggle mapapplication using the Internet. People can be informed about theexistence of a point where they can go and make purchases. Thespecific store can be typed, and a search conducted. The exactlocation of the retail depot is identified. Other developments thathave occurred involve a company or a business organizationdesignating particular days for visiting a certain area with the solepurpose of selling. The days are made known to the public so that thecustomers can prepare themselves for the purchase of the products(Ayers, 2006).The producers utilize this technique in distributing goods to mostlyareas where it is remote and almost impossible to place a permanentretail point for providing these goods. However, this method is onlyapplicable to products life is longer and is not perishable. Fastmoving goods cannot be distributed using this channel of distributionbecause the customers need them in the market every day. Some of theproducts that are appropriate for this, technique include electronicand hardware. The supply chain of this kind is, nevertheless, cheaperand more convenient in terms of delivery. The method, on the otherhand, is not reliable since the designated days do not necessarilymean the customers have the money to buy the product (Ross,1998).
CHALLENGE FACING THEE-COMMERCE AND HOME DELIVERY .
E-commercelogistics and supply chain management face very many challenges.First and foremost is that people lack knowledge of the existence ofthe R-commerce services in the economy. The concept of on-lineshopping and home delivery service has started to gain groundrecently. So it is only known and applied by a very few individualsacross the world. The developed countries are the ones that lead thelist of those who conduct on-line shopping the most. Those who know,however, are always afraid and consider it fraud (Tompkins& Harmelink, 2004).They do not trust conducting on-line shopping as they view it as amethod designed to swindle fund from them. Moreover, true to theseclaim, fraudsters exploit the opportunity by enriching themselves.This is a challenge to on-line selling also called E-commerce, and itis a challenge that organizations find difficulty in solving. Once aperson is conned, and he or her money stolen, it then follows thatthe same person will never or will take a long time before decidingto shop on-line again. For home delivery, the customers feel that thedelivering company will not deliver what they specifically want. Thecustomers opt to go to these places themselves to select the itemsthey want. Products that fall into this category are the foods andgroceries (Fredendall &Hill, 2001).
The other problems come inidentification of the location of the customers. Once a customer’splaces an order, it is the responsibility of the selling organizationto locate the buyer. Some buyers have admitted that the deliveringpersonality fail to locate the buyer even if the direction they aregiven belong to a very popular and known places. This can lead towasting of time and resources. Some of them get lost which lead towaste of time and consequently can lead to a dis-satisfied customer.The problem of delivery and movement of good to the customer placesremains the largest problem. In case the products being delivered aregroceries and foods and if the person delivering them fails to getthe direction will result in a very huge loss to the company. Solvingthis problem can increase customer confidence and retain a majorityof them given the efficiency in the supply chain management (Ross& Ross, 2011).
The other challenge exhibititself when it comes to the final payment for the goods. It is a veryshocking thing to learn that about 25% of trials to pay for the goodspurchased on-line result into an error. This translates into astatistics of 25% customers failing to get satisfied. In themarketing discipline, in general, a customer who fail to getsatisfaction is proven by research that he may go ahead and inform onaverage 11 persons about the experience. The bad experience may beused to discourage potential victims who were contemplating to usethe new platform in buying goods and services. The volume of goodsbeing traded on the Internet is a challenge. If the amount is toolarge, it is likely that the customer would prefer the physicalconduct in buying the good. The total monetary value of the goods isalso a factor looked upon before conducting Internet purchase. Thecustomer will first ensure he has custody of the goods beforepartying away with a huge amount of money (Gattorna,1998).
COMPARETHE LOGISTICS AND OF AMAZON UK AND A RETAILERWITH HOME DELIVERY AND OFFERS ON-LINE SALES AND HAS A PHYSICAL STOREPRESENCE
Amazon UK is a pure on-lineservice and is likely to face with all the challenges facingorganization that carries out the E-commerce. For Amazon UK, thelogistics and supply chain management function is shortened since itonly involves the utilization of Internet to carry out all itsoperations. Due to its large size and worldwide fame, Amazon UK islikely to be trusted and, therefore, conduct its on-line businessacross the whole world. When we come to the retailer, although he isalso using the on-line platform to offer the goods, people may failto believe him the most. Furthermore, the presence of a physical shopmakes the on-line platform only a form of promotion and serves as anadvertising tool. It informs the potential customers of the goodsfrom the places where they can get the goods and hence provide adirection.Amazon UK is also concerned with and promoting a chain ofsupply that is more or less depended on other parties to distributethe commodities for them. In the case of a single retailer carryingout distribution and also conducting business on-line, all functionsare carried out by the same organization (Rushton& Walker, 2007).
PUBLICAND REGULATORY CONCERNS IN THE NEXT DECADE
Online shopping and E-commercein general is faced by on vital issue, which apparently inhibit itswidespread use. The issue is the security of the transactions andalso assurance that the customer will get the goods in time. No lawexists to cover substantially and comprehensively deal and control the practices of conducting on-line trade. It is,therefore, necessary that the regulatory authorities stepped up andset a law to regulate the practice. Currently the law that governsthe trading platform is not explicitly defined but they are ratherderived formal ready existing laws. In the future, on-line businesswill be among the leading, and it is, therefore, necessary thatlegitimate measures are taken earlier before. We would like to seethe policy where the customers assured of the security of his moneygiven their recent rise in the cases of computer crimes among themfraud. In line also is the provision of necessary actions to bebrought forward in court concerning the case where a seller fails todeliver good in time? The supply chain of goods is very important andin that aspect, the policies in future ought to give a clearunderstanding of when the goods are in the custody and care of thebuyer (Snyder &Shen, 2011).
In line with the practice offairness and responsibility, businesses should take an initiative toinstitute protocols that will ensure the customer is safe when andwhenever he or she visits the on-line shopping site. Supply chainshould also be established in accordance with the necessity ofcustomer in order to meet demand with a steady supply. Publicity isone of the factors that enhance consumer’s loyalty towardconsumption of a particular good. Assurance of a steady supply of acommodity reflects an organization commitment to meeting andfulfilling the request of the customer. Further, this is one of thevariables that shape consumer and market positioning are consequentlyresulting in the success of the company. A supply chain managementsystem will in future face all the above challenges in establishing asuccessful distribution channel of the goods produced by theorganization. Commitment to these policy issues will increaseconfidence on the part of the consumer since it will be an assuranceand direct acknowledgment of the problems that the on-line businessis facing. It will, therefore, be a milestone on the producers’side to ensure the on-line sites are in conformity with the relevantregulations of the practices of on-line trading. To end the matter,it is proper to acknowledge that the recent trade in supply chainmanagement and inclusion of and integrating information systems hasenhanced the supply chains and distribution of goods, in general.However, serious security concerns and system failure have beenraised and questioned the credibility of the emerging issue inbusiness supply chain (Tayur,Ganeshan & Magazine, 1999).
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