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Lean organization denotes almost zero inventories while a resilient firm ought to have adequate
inventories to respond to the impact of disruptions, which may transpire in chain of supply.
These notions appear to contradict. However, it would be perfect to have both paradigms
functioning together in an organization (Peck 2005; (Narus and Anderson 1996). Additionally, it
As much as low-cost production may primarily prove appealing, a total cost of supply chain
perspective provides a far more practical approach to formulating sourcing decisions (Monczka,
Trent, and Handfield 2005). In todays economy, a cost outlook has become more crucial than
ever, especially as increasing costs of energy have pushed up logistics, distribution, and
transportation expenses as a total percentage cost. Thus, as these expenses increases, they could
Supply chain strategies today need to consider how fast suppliers deliver materials and parts to
manufacturers (Rosenfield, Shapiro and Bohn 1985). At times, lowcost nation sourcing does not
add up, for instance, if constraints of leadtime counterbalance any cost benefits. Certainly, in
some instances, leadtime considerations might essentially be of greater importance than cost or
they may need to be taken into account as part of the extensive cost equation (Chopra and
Meindl 2004; (Gonalves, Hines, and Sterman 2005).
Therefore, a time and cost trade-off is a wise supply chain strategy to balance demand with
supply to build an international supply network distribution, which best caters for the business
objectives of the company. Thus, companies recognize that the chain of supply is the
indispensable ingredient for international competition (Monczka, Trent, and Handfield 2005).
Thus, managers must take into account the chain of supply in extensive business decisions,
particularly the cost pressures in transportation and sourcing. They will possibly increase their
software application use, for example, as systems execution of supply chain, as means of cost
management. Additionally, there is decreased tolerance for waste from supply chain and clear
proof that the involvement of supply chain in the novel development and launch of a product can
both accelerate the procedure and decrease rework (Gonalves, Hines, and Sterman 2005).
Risk management is also a key to going global. It becomes a precedence as organizations strive
to move past multiregional processes to truly international supply networks (Gonalves, Hines,
Suppliers problems become a companys problems, particularly when they are linked to
sustainability. Thus, suppliers have to integrate regulatory compliance and environmental factors
in the metrics of operations (Monczka, Trent, and Handfield 2005). The pervasiveness of
discussions on sustainability means that consumers are more and more demanding discernibility
into operations as well as those of their suppliers (Holweg 2005).
Conclusion
Conclusively, whether companies are concerned about handling risk of supply chain and
business continuity, sustainability or reliability and quality, organizations have to re-evaluate
their strategy of supply network to mirror total cost. Moreover, the total cost of supply chain is a
major influence for the implementation of a time sourcing strategy. Thus, a trade-off between
time and cost is critically focal to global supply chains to meet the needs of the company and
those of the customers.
Tang, CS 2006, Robust strategies for mitigating supply chain disruptions, International Journal
of Logistics: Research and Applications, vol.9, n.1, pp. 3345.
Peck, H, 2005, Drivers of supply chain vulnerability: an integrated framework, International
Journal of Physical Distribution & Logistics Management, vol. 35, n. 4, pp. 210-232.