ALEXANDRU IOAN CUZA UNIVERSITY

Faculty of Economics and Business Administration

SUPPLY CHAIN MANAGEMENT

FUTURE TRENDS-

Student: Prihor Adina Oana

Supply chain management-future trends

The term supply chain management (Supply chain management - SCM) was created by two
consultants: R. Oliver and M. Webber, in 1982. In their view, coordination of materials, and
finance information circulating within a large multinational is a challenging task and brings
rewards. Obviously, a chain of supply of a group of individual companies should act as an
entity unique, which is more difficult
.
Research on the integration and coordination of different functional units began long before
the emergence of the term supply-chain management was delivered in 1982. These efforts can
be detected in various areas such as logistics, marketing, theory organizational, operational
management and operational research.
The term supply chain management was accredited by the consulting firm Booz Allen
Hamilton, in 1982. According to the definition developed in 2004 by a well known
professional supply chain management include planning and management of all activities to
identify sources and their procurement, conversion, and all activities involved in logistics
management. It also includes coordination and collaboration with partners who may be:
suppliers, intermediaries, third-party vendors and customers. In essence, supply chain
management integrates supply and demand both within and between various companies.
Logistics after the 80 began to be addressed by more and more companies in the business, as
its main objective being the competitive advantage. The competitiveness of the firm, opinion
specialists, is largely determined by the characteristics and quality of the supply chain. This
approach led to the emergence and development of the concept of supply chain.
In the opinion of Peter Drucker, the concept of supply chain seen as business relationships,
extends beyond traditional companies seeking to optimize all business processes within a
single supply chain consisting of partner companies that take various logistic functions (Peter
Druker, 1998 ).
Other authors define the supply chain management as being the integration of key business
processes from end user to the original suppliers that provides products, services and
information that add value for customers and other stakeholders (Lambert and Cooper, 2000:
46).
By applying specific management within the supply chain it is obtained a coordination of
organizations that acts as a system to improve and optimize processes to obtain an overall
benefit.
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Competitiveness and performance of an organization is dependent on allegiance in a supply

chain, which operates efficiently and effective, in which there is a synergy due to the
imposition and implementation of common objectives and strategies of the partners.
It is said by a new philosophy of business, that competition is no longer taking place between
independent organizations or between small group organizations, but between supply chainsdelivery network consisting of interconnected manufacturers, retailers and logistics providers.

Most common definition of supply chain management sees it as a process of planning,

implementation and supply control operations carried out in order to meet the
specifications efficiency. Supply chain management covers all movements of
raw materials and stock, processing them, it refers to the finished goods from point of origin
to the delivery to the consumer.

Lately, the most important task of a company is to fully understand and anticipate its
contribution in the supply chain. By defining customer needs and wishes, and trying their
fulfillment, supply chain of which the company is a complex array of business processes,
decisions and commitments of resources unmatched by any size organization.
An effective and efficient supply chain, to ensure competitive advantage so wide (global) and
individually to members that integrates it, requires consideration of the following:
- Changes in requirements and customer responsiveness;
- Reduce inventory, both in size and duration of restraint products in stock;
- Reducing service costs associated logistics activities;
- Improved quality of service;
- Response (reaction) quickly to market changes.
A classification of supply chain based on the complexity of supply chains, define simple and
complex supply chains. The complexity of the supply chain will vary depending on the size
of the business and the variety and number of units manufactured, the number of levels in the
supply chain and distribution members at every level.
Supply chain management performance
A performance measurement system supply chain plays an important role in managing a
business, because it provides the necessary information for decision making and various
activities. After Kaplan, without tools, can not achieve any improvement , it is essential to
manage the right things at the right time in a supply chain so that action can be decided in
time (Kaplan, 1990).
Instruments and performance measurement indicators do not measure performance alone,
they are often integrated with policy, strategy and many other aspects of behavior.
Measurement system supply chain must necessarily take into account organizational

performance measurement, and the supply chain as a whole, because if there is a correlation
between one or the other, or both suffer.
The purpose of organizational performance measurement is:
identify results or success or failure;
identify whether the customer needs are met;
help the organization understand its processes and to confirm what we know, or to reveal
what is not known;
identify where there are problems, bottlenecks, losses, etc. and where improvements are
needed;
ensure that decisions are based on facts, not assumptions, emotion, faith or intuition;
show whether planned improvements actually occurred (Parker, 2000).
The traditional measurement of business performance were mostly financial, to measure
return on investment, cash flow and profit rates. However, conventional instruments have the
disadvantage of focusing on the company's internal environment where there is only less
costs and the external environment, which appear and evaluate the results, they fail to include
intangible indicators, but focuses mainly on indicators relating to past situations. This has led
researchers and companies to review the tools and indicators to measure performance in this
new economic environment in which firms operate within the supply chain (Parker, 2000).

The literature identifies four main elements supply chain management, such as:
Planning - includes identification of requirements, planning supply and distribution;
Resources - include identifying sources that will run procurement, repair techniques and
equipment, and other services;
Delivery - involves ordering, storage and transport;
Maintenance - includes repair techniques and equipment and provision of spare parts.
Supply chain management may be analysed from two points of view: on one side from an
emergent area of practice and on the other side from an emerging academic field. Non of the
positions is full developed but each has significant hope. The upcoming advance of each will
be increased and so is finally dependent upon the other. Given the off-remarked
acknowledgement of the critical grandness of the activity and people proportion but the
relative neglect of this in any meaningful
form, specific care is offered to this thing. Supply (chain) management is finally about
influencing behaviour in specific directions and in specific ways. The underlying logics,
drivers, enablers and barriers deserve and demand careful tending.
A group of analysts have already tried to understand and considerably redesign the
boundaries of, and the vital nature of, this field of theorising and practice. For instance, in one
of the most logical and formed attempts at a reconceptualisation, Harland (1999) presents the
case for a new expanded set of knowledge and area of practice which they indicate should be
tagged supply strategy. The principle in arrears this is the purpose to improve upon the
more restricted concepts of operations management and operations strategy. They say
that supply strategy may adopt logistics, operations management, purchasing and supply
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management, industrial relationship marketing and service management. But, they propose it
is not only an accumulation of these: the underpinning purpose is to exploit relational
strategies in a holistic manner. When approached in this manner the area merges
unnoticeably into the strategical management literature interested with strategical
partnerships (Storey, 2002). Strategic partnerships can be shaped horizontally and
vertically the last mentioned being expressions of supply or channel relationships. nearer
bonds are: . . . what separates partnerships from a more transaction supported set of
exchanges which are restricted in scope and purpose (Mohr and Spekman, 1994, p. 140).
The primary idea is to find and offer details about an area of theory and practice where it
exist potential for several extra benefit by reconceptualising it in a specific manner. The main
idea captured by supply strategy (or strategic supply management) refers to a manner
of thinking and initiative taking which encompasses, and seeks to exploit, interlocking
relationships could possibly be utilized as a strong lever for competitive advantage (Ketchen
and Giunipero, 2004).
Supply chain management - theory
Apparently, the main focus regarding the literature related to supply strategy, operations
strategy and supply chain management is directed at meaning making. Most of the time, this
offers insights regarding what it essentially is. The main points of Supply Chain
Management, that were mentioned before, are related to three elements: description,
prescription and the identification of alleged trends.
Most of the debates are related to scope and focus. Many academicians sustain that they
utilise the terms supply chain management and purchasing as synonims (Stuart, 1997). In the
opinion of Lamming the concept of supply management should be broader. According to
specialists in purchasing, supply chain management is about suppliers relation development.
(Giunipero and Brand, 1996). On the other hand some agree that it is not enough to have a
good supplier management, there is a need of a wider perspective that will comprehend all
the processes beginning with sourcing, creating and transporting onto merchandising and
finally, to the customer (Davis, 1993).
Supply chain management -Trends identification
Cooperation rather than competition
Collaborative models rather than antagonistic models (Matthyssens and Van den
Bulte, 1994; Carr, 1999)
The increasing use of supplier-evaluation tools (Carr, 1999)
Retailers requiring suppliers to replenish stock based on actual sales (Abernathy et al.
2000)
The increasing use of tools and techniques such as Quick Response (QR) and
Efficient Consumer Response (ECR) (Senter and Flynn, 1999).
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 Supply management consciousness accelerating up the corporate agenda

Even though most of the trend analysis involve advancement, some analysts sustain that even
with all the technology, supply chain management has never been worse. Hines et al.
(2004) Fisher (1997). In their opinion, the managers fail at identifying the most appropriate
methods. They should focus more on adopting a contingent approach and not an best
practise approach, managing to meet the characteristics of supply chain to product strategy.
(Lambert et al. 1996).

Next Steps Towards the Future Supply Chain

The road toward the future supply chain architecture will be paved with a combination of
individual improvements by companies and collaborative initiatives by groups of retailers,
manufacturers, suppliers and other companies in the value chain (such as logistics service
providers). While individual company improvements will be implemented based on
assessments of the added value of certain solutions in their specific situations, that will not be
enough for collaborative initiatives. These collaborative initiatives need industry leadership in
order to move forward.
The realisation of the collaborative concepts that comprise the future supply chain
architecture will require a number of initial next steps, driven by industry leaders. Action
must be started in one or more of the following areas:

Information sharing driving the collaborative supply chain

Collaborative warehousing
Collaborative city distribution (including home delivery and pick-up)
Collaborative non-urban distribution (including home delivery and pick-up)
New ways of working together in the physical supply chain (including management of
required investments, capabilities, organisational resources and design, incentives and
measures, social regulations like working hours, etc.)

The actions should be structured as follows:

Establish buy-in on the vision by a select group of key stakeholders (such as leading
retailers and manufacturers, mayors of big cities).
Check the concepts business case with the involvement of all key stakeholders.
Pilot the concept (or possibly leverage and enhance existing pilots).
Evaluate the implementation and share learnings.

Trends of Future Supply Chain management

The future changes regarding the supply chain management represents a problem that every
organization meets. The secret to be successful stands in improving every supply chain in
order to meet the changing demand of the market.
Cloud Computing. It refers to a distributed computing over a network, in which an
application is able to run on a multitude of computers in the same time. One or more
computing hardware machines forming a server are connected to a communication network.
The server can run applications, store data, perform mainly any computing tasking. It can be
used from anywhere in the world, by any person having permission to access the server. All
this are available at low costs. Applications with low costs and safe cloud solutions for the
supply chains all over the world are beginning to develop more and more.
Business Process Convergence. Instead of wasting time with automating inefficient
processes, the firms will obviate them. For example, the companies will supersede the
business documents inside the company with different systems.
Global Labour Costs Equalize. Labour arbitrage is in declivity as labour costs in Mexico
correspond Chinas, and India, Ukraine, and Indonesia get efficient regarding the cost
competitive.
Raw Material Scarcity. Companies that use energy, water and other raw materials
responsibly will have a competitive edge in global markets by 2030.
Energy
Worldwide consumption of primary energy will grow with 26%. Oil will have a decline
regarding the market share, to renewables. The gap in energy consumption between
developed and developing countries is going to extent, having the consumption of energy of
the developing countries around 79% bigger than developed countries in 2030.
Water
Total yearly water requirement will grow with 53%. Regarding the population, 94% of the
urban population has access to clean water nowadays, while in the rural environment, 76% of
the people have access. The issue regarding water pollution will not be solved by 2030, due
to the rapid urbanization and unsustainable agriculture
Commodities
Requirement for food will increase due to the increasing population and increasing per capita
food consumption. The food production worldwide will have a decline by 2030 due to the
ecosystems changes that will appear as a result of the climate change. As resources scarcer,
conflicts will heighten up to 2030. The polarity exportation and importation countries will do
trading raw materials an matter of national political involvement.
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Raw material scarceness is influencing innovation in materials, with companies replacement

copper with aluminium, gold with copper, and steel with resin in certain cases. Companies
will also need to improve the management of the conflict minerals and rare earth metals.
Skill Specialization.
New supply chain skills will be developed, as ,mentioned before, cloud computing. Also, the
the undergraduate and MBA environment will develop, becoming more specialised.
Regional & Local Sourcing. Sustainable local sourcing refers to a firm which buys local or
regional products, processes them locally and sells them in local or regional markets, and
through this it creates a sustainable business that has benefits on both sides: its local suppliers
and the to the business. This firms might be international ones, national supermarkets or, also,
entrepreneurs.
Local sourcing is an chance for firms which`wish to assure sustainable supply and minimize
costs by substituting imports. Taking into account the design of the business model, sourcing
locally can also have advantageous spin-offs for food security and local economic
development.
Emergence of Control Towers.
The mission of the Supply Chain Control Towers is to transform raw data feeds into real-time
information, all these happen in a central location which controls the flow of orders,
inventory, and consumption across the network.
Predictable versus Unpredictability: being predictable represents a competitive advantage;
supply chains overcome the barriers met in order to become faster, more cost efficient, and
safer.
Corporate Social Responsibility Becomes Fundamental: For the companies this ill not be
optional anymore, due to the policies which enlarge, developing country laws which catch up,
and foreign corporations which will start to follow global norms.
Non-Zero Supply Chains Win: The key to succeed is in focused supply chains on bigger
collaboration between everyone in the ecosystem. The estimated result of this will consist in
end-to-end supply chain solutions creating new value for customers.

Conclusion
Many authors tried to define the concept of Supply Chain Management (SCM). Most
common definition of supply chain management sees it as a process of planning,
implementation and supply control operations carried out in order to meet the specifications
efficiency. Supply chain activities cover everything from product development, sourcing,
production, and logistics, as well as the information systems needed to coordinate these
activities. Supply chain management, in other words refers to the management of supply
chain activities in order to rise customer value and, also, to gain advantage in terms of
competition. It represents a conscious effort by the supply chain firms to develop and run
supply chains in the most effective & efficient ways possible.

This concept has its base in two main ideas. The first main idea sustains the fact that every
product that reaches an end user is the result of the additive effort of multiple organizations.
This firms compose the supply chain.
The second idea refers to the fact that even though the supply chains were existing for a long
time, many entities focused on what was happening in the interior of the entity.. The result
was related to ineffective supply chains.
An effective and efficient supply chain, to ensure competitive advantage so wide (global) and
individually to members that integrates it, requires consideration of the following:
- Changes in requirements and customer responsiveness;
- Reduce inventory, both in size and duration of restraint products in stock;
- Reducing service costs associated logistics activities;
- Improved quality of service;
- Response (reaction) quickly to market changes.
The literature identifies four main elements supply chain management, such as:
Planning - includes identification of requirements, planning supply and distribution;
Resources - include identifying sources that will run procurement, repair techniques and
equipment, and other services;
Delivery - involves ordering, storage and transport;
Maintenance - includes repair techniques and equipment and provision of spare parts.
Trends of Future Supply Chain management
The future changes regarding the supply chain management represents a problem that every
organization meets. The secret to be successful stands in improving every supply chain in
order to meet the changing demand of the market. 10 supply chain management trends for the
future have been identified:

Cloud Computing.
Business Process Convergence.
Global Labour Costs Equalize.
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Raw Material Scarcity.

Skill Specialization.
Regional & Local Sourcing.
Emergence of Control Towers.
Predictable versus Unpredictability.
Corporate Social Responsibility Becomes Fundamental
Non-Zero Supply Chains Win

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18. http://www.supplychainquarterly.com/topics/Strategy/20130621-supply-chainmanagement-a-look-back-a-look-ahead/

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