Essay: THE COMPONENTS OF INTERNATIONAL SUPPLY CHAIN INFRASTRUCTURE

THE COMPONENTS OF INTERNATIONAL SUPPLY CHAIN INFRASTRUCTURE
A supply chain is made up of many independent organizations that are glued together with the aim of making use of raw materials and delivering them as finished products to the end consumers. Supply chain employs a fact which is adding value to the goods and services before delivering them to their esteemed end consumers. Supply chain management is thus one of those young and nascent subjects or topics that has replaced the old approaches when it comes to supplying and delivering the end product to consumers. It has been greatly associated with re-engineering, strategic management, agile manufacturing, and lean thinking as well as other well-grown management practices that have been on the rise in the industry. Some years ago, supply chain management and infrastructure mainly focused its activities mainly on purchasing and other cost reduction related activities. (Bowersox et al, 2002)
One question that keeps ringing at the back of everybody’s mind is “why now?” Why has the business family abruptly started acknowledging and implementing this unique market strategy? The most polite answer to this question is that business and the business environments have really changed. These changes include globalization, more and more competition growing each day, increased customer expectations, rise and growth of technology, geopolitical aspects among other factors. It is as a result of these factors that businesses have stopped using the organization focused management approach. One of the main reasons for dropping this approach is because it is out of date and can no longer adequately deliver goods or services at the required competitiveness. Thus, organizations and businesses can be treated as a part of the chains. At the end of the day, it is only the supply chains that can be used to describe a success or a failure when it comes to successfully delivering goods and services to the end consumers and not businesses as people tend to think.
As discussed above, it is quite clear that competition has moved from organizations to supply chain against other supply chains which indicate great changes as compared to the other old approaches. In this case, for any business to thrive, survive and remain relevant in the industry, it depends on its ability to greatly cooperate with the supply chain as opposed to its ability to bring about competition. Thus, the supply chain is responsible for the success or failure of any business that is a part of it thereby bringing out the reason why it is important at this moment. Extensive research has proved that there is a no better way to manage a business other than managing it while corresponding to the supply chain aspects such as appropriate strategic positioning, adequate structural configuration, collaboration, leadership, and integration as well. Every single aspect of the business has something to do with the supply chain in a way and thus value creation is as a result of combined efforts by all those involved in the chain.  A successful supply chain has to have more than one companies. Also, these companies should not belong to the same business owners. This, therefore, brings out the issue of legal dependence because two separately owned companies team up to work together. The other most important fact is the common commitment between these two entities with the aim of adding value to the goods and services as the flow through the supply chain. It is thus correct to conclude that each company receives materials as the inputs which are later released as value added outputs. ( Horvath, 2001)
THE FOUR INTRINSIC FLOWS OF A SUPPLY CHAIN.
In order to understand the business connections and other activities, it is important for this paper to outline the existing flows that are associated with the supply chain.
Material flow- every existing chain has this flow that runs from the beginning of the chain as raw materials and ends when they become finished products. An instance in the case of a furniture making supply chain, raw materials are introduced to the chain as wood in the forest. The woods pass through the chain and ends as furniture ready to be used at home. These materials draw a clear boundary that is unique to only them as they find their way through the chain. That’s why a supply chain dealing with other different materials cannot be comparable to the one dealing with furniture.
Information flow- in order for any chain to be successful, it has to utilize information. There is much information that comes into play when supply chains are into play. This includes details about forecasting, demand, design, scheduling, to name but a few. This flow is however unique, it can move towards upstream and downstream alike. Any supply chain has its different set of information flows that are only important to it.
Finance flow- this flow is also important. The flow of money keeps the chain alive and supply chain remains relevant. There is only a single source of finance that introduces the concept of single entity aspect of a supply chain. This flow allows for the better alignment among the companies that are participating in the chain.
Commercial flow- every chain is a representation of transactional commercial flows. In this case, the material flows change their ownership as they move from supplier to buyer. As they near the end consumer, commercial flow occurs as they move within the multiple companies. ( Hult et al, 2004)
The above-explained flows define and clearly explain the function of a supply chain. They clearly stipulate the major areas of concern whenever supply chain management is of concern.
PURCHASING MANAGEMENT
Any supply chain has purchasing as its heart. This is one of the components that need to be strategically managed in order to establish and facilitate a great and a successful supply chain. In order to understand and implement this, one needs to know what resources are required in the supply chain and how each and every one of them is to be managed. This is because when it comes to purchasing strategies that are implemented in the supply chain, there are problems that arise such as inflation, physical shortages, and energy crises as well as supply chain integration which can affect and cause costly damages to a supply chain. For example, any reduction in the supplies in a supply chain will certainly cause a corresponding increase in the normal prices of the product. Alternatively, an increase in demand for the goods will affect the prices too. In addition, prices can also be affected by actions from the government such as when tariffs are imposed on imports. This is why purchasing takes up such an important role in supply chain management and its actions are critical to the success of the chain. This purchasing arena defines the chains viability, profitability and also the bottom line productivity. ( Van Weele, 2010)
QUALITY MANAGEMENT
Quality of a product needs to be managed carefully as it should always be right for the consumers (both suppliers and buyers) to find value in them. The quality of a certain product is the one responsible for the company’s reputation that it creates to the world. A company that is known for its continuous supply of quality products in the chain is likely to succeed when compared to a company whose quality is unpredictable. The success of a supply chain means success to the individual companies making up the chain which extends to the success of even the employees. Thus, in order to thrive and remain relevant in today’s world of business, every company in the supply chain must be geared to improving and even employing ways that are efficient enough to produce and deliver goods that help satisfy the end customers. Products that meet customer’s requirements are advocated for in a supply chain as they help balance the whole supply concept. Extensive research shows that a customer should never have a reason to make a choice between price and quality of a product. The two should always show an aspect of balance as they both contribute to satisfying a customer’s needs without having to exploit them. This is why you will find competition playing a very important role in the market. When there is mature and ethical competition between different companies dealing with the same product, quality has been the focus for any company to stand out. A great company that wants to succeed in the supply chain management should thus implement a quality policy that is unique to them as quality is treated as a sign of excellence.  It is thus such an important tool in the supply infrastructure.
OPERATING ENVIRONMENT
A supply chain ought to operate in a well deserving and in an enabling environment for it to be successful. A business environment is, however, a complex set of a number of variables rather than and cannot be described by a single aspect. The environment in the supply chain extends to even the existing buyer and supplier relationships that define and facilitate the whole process of the supply chain as raw materials find their way through the chain until they are finally received by their end users. This relationship help both parties to know and understand their limitations as well as their opportunities. However, the condition of any relationship (whether good or bad) totally depends on both the involved parties as well as another external business environment. Business environment can be classified as either external or internal that can further explain how they affect risks and how the two influences performance. Some of the internal factors that tend to affect the operating environment in the supply chains include technology, social bonds, the supplier base, experience by them buyer to name but a few. On the other hand, external supply chain environments include the political environment, culture, and competition by other firms. ( Gunasekaran et al, 2001)
STORES AND THEIR MANAGEMENT
Stores are equally significant when a supply chain is in operation. Every single unit of the chain needs a store. Products that are introduced to the chain need to be held at a safe place with the right conditions after their transportation. This makes stores part and parcel of the chain as they facilitate receiving and storing of stock. They as well control how different levels of the stock moved from one place to another within the chain. It is in these stores that other activities such as training of staff is done and ensuring that health and other stipulated measures are observed. This makes it one of the most crucial components of a supply chain infrastructure as no activities can go on without the presence of physical products that are being supplied.
 
Reference
Horvath, L. (2001). Collaboration: the key to value creation in supply chain management.  Supply chain management: an international journal ,  6 (5), 205-207.
Hult, G. T. M., Ketchen, D. J., & Slater, S. F. (2004). Information processing, knowledge development, and strategic supply chain performance.  Academy of management journal ,  47 (2), 241-253.
Van Weele, A. J. (2010).  Purchasing and supply chain management: Analysis, strategy, planning and practice . Cengage Learning EMEA.
Gunasekaran, A., Patel, C., & Tirtiroglu, E. (2001). Performance measures and metrics in a supply chain environment.  International journal of operations & production Management ,  21 (1/2), 71-87.