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Supply Chain Management: Theory and Practice

Table of Contents


Supply chain management is the management of the system that involves the provision of goods and services to the final consumer. The system thus begins from the movement of raw materials up to the point at which a consumer receives the good or the service. This paper seeks to discuss aspects of supply chain management. The paper discusses supply chain management from a company’s supply chain director’s point of view. The discussion will involve the pricing, coordination and technological future issues regarding supply chain management.


Supply chain management is one of the key departments in our organization. The department has over time been transformed to improve the services that the department offers to the organization as well as the level of satisfaction that our partners and customers derive from our services. Some of the key issues that the department has successfully are: development of strong relationships with the company’s suppliers and customers, departments and other supply chains.

Such relationships have been aimed at developing a clear understanding of the parties to ensure that the supply chain management department is coordinated competitively with the parties’ needs for maximum satisfaction. The duties of the supply chain management as outlined in the company’s structure includes, though is not always limited to “order processing, customer service, distribution, product development and supply” (Jespersen and Larsen 17).

The management of the company’s supply chain department has for this reason been structured to operate from two perspectives. The two divisions in the supply chain management are “physical and technical” management and “operational and behavioral” management. It has been argued that these divisions are very vital in ensuring the competitiveness of a supply chain (Jespersen and Larsen 17). Both departments cover a variety of issues in the organization.

The major aspects of the organization’s supply chain management include pricing, coordination, and technological issues. Though the aspects have so far been satisfactorily handled as revealed by our service recipients and the organization’s internal monitoring systems, there are still plans to enhance the operations of the department about these aspects. Below are some of the plans that the department has identified with respect to these aspects.


The supply chain department has been using a combination of pricing approaches based on the type of parties that we deal with and the market trend for our services. The approach we have adopted is that suggested by Wisner, Tan, and Leong: “cost of service pricing and value of service pricing” (Wisner, Tan and Leong 315).

The cost of service pricing is based on the quantity of service rendered in terms of volume of commodities dealt with at a particular time as well as the distance to be covered in transportation in cases of moving commodities. The value of service pricing, on the other hand, depends on factors such as the value of the commodity being handled as well as the changing market demands for offering the services. Though the value of service pricing is not always stable, it has been recommended for future adoption by the department following its revenue capacity especially with specialization on highly valued commodities (Wisner, Tan and Leong 315).


Coordination of activities has been another aspect that the department has established plans for. The mode that has been applied by the company concerning its coordination has been based on information models such as “vendor managed inventory, jointly managed inventory and collaborative planning, forecasting and replenishment” (Xu, Tjoa and Chaudhry 11). These models have, however, showed several weaknesses leading to plans to adopt a grid model of information system from which efficient coordination can be achieved.

This integrated model of information system has been identified to have “openness, heterogeneity, distribution and autonomy” (Xu, Tjoa and Chaudhry 12). It is for these reasons that it is believed to have the ability to improve the department’s capacity to effectively and efficiently integrate the needs of partners to the company’s supply chain management. The model has been designed and is currently ready for a pilot test (Xu, Tjoa and Chaudhry 11).


Following the essence of information in the whole process of coordination and management of the organization’s supply chain, a great deal of consideration has been given to the company’s information technology which the department depends upon. Research and analysis has been undertaken to establish an information system that will sufficiently connect the department to its partners and the organization’s customers and suppliers. Measures have been undertaken for the development of an information technology that will be more efficient concerning “flexibility, agility, transparency, speed and quality” (Poirier 86). Such a development will have the effect of improving the information flow through the supply chain for better coordination and management.


Though the organization’s supply chain management has been over time commended for its services, we still aspire to improve our work through continuous developments of the department’s systems and aspects.

Works Cited

Jespersen, Birgit and Larsen, Tage. Supply chain management: in theory and practice. Copenhagen, Denmark: Copenhagen Business School Press DK, 2005. Print.

Poirier, Charles. The networked supply chain: applying breakthrough BPM technology to meet relentless customer demands. Florida: J. Ross Publishing, 2004. Print.

Wisner, Joel., Tan, Keah and Leong, Keong. Principles of Supply Chain Management. New York, NY: Cengage Learning, 2008. Print.

Xu, Li., Tjoa, Min and Chaudhry, Sohail. Research and practical issues of enterprise information systems II. New York, NY: Springer, 2007. Print.

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