Supply Chain Management
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Supply Chain Management
Supply chain management is the supervision of goods and services till they reach the target customers or market. Companies should have supply chains which are efficient, responsive to the needs of clients, agile and risk hedging. Firms and other business entities need to put in place mechanisms that ensure incentives are aligned in the supply chain as expected so that the costs, incurred risks and rewards of carrying out business are distributed equitably across the network. Misalignment of the incentives affects a company ability to control its supply chain resulting in excess inventory, high operational costs with reduced profits and a weak return on assets (Narayanan & Raman, 2004). A company needs to devise strategies which will enhance the supply process of its products till they reach the desired market or customers. One of the methods to be used is the framework of uncertainty which elaborates on the demand and supply uncertainty faced by a product. Fisher introduces the aligning of supply chain strategies at the right level of demand. The demand uncertainty deals with the approximation of the demand for a good and, therefore, the deployment of different supply chains based on the need. Functional products such as basic clothing, food, oil and gas and household consumable items tend to have extended product life and consistent demand, need for a more mature and stable supply process (Narayanan & Raman, 2004).Though this doesn’t reflect what is happening in the real world. For instance, the quality and quantity supplied of some food commodities greatly depend on yearly weather conditions. On the other hand, innovative products like modern integrated circuits, high-end computers, and fashion apparel are characterized with limited lifespan of great fashion contents due to innovation