Logistics Within the Business Organization

LOG 490
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Efficient systems of supply chain management (SCM) and logistics are required for the sustainability of the organization and attainment for competitive advantage. This is because they can rarely be imitated by competitors as supply chains are always unique for each company and, in addition, difficult to manage the logistics and SCM systems of a company. This is due to the challenging and different risks involved. It is, therefore, important for even the senior managers to understand the aspects and benefits of incorporating SCM in a company. This paper highlights the reasons why senior management ignores SCM and provides strategies that could be employed to sell to the senior management the benefits of SCM, including the benefits of working with the key stakeholders while selling SCM.
Q.1
Per Dutton (2009), the higher a company’s profitability, the less the managers perceive the need to address issues that are related to supply chain Management (SCM). Among the reasons that managers do not see the need for logistic management inherent in supply chain management is due to the organization’s profitability. The managers are highly concerned about the profit margins and not SCM. When a company’s profitability increases, logistics in SCM and issues such as transport become minor costs and managers devote minimal time to management of supply. They place their focus on areas of the company that high returns (Dutton, 2009). However, in incidences where profits begin declining, the managers recognize turn their focus to the efficiency in SCM as now, even the smallest costs become vital for the company. Therefore, in case of decreased profitability, efforts will be placed to recover such profits. SCM is among the strategies employed by companies to increase its profitability through Just in Time (JIT) approaches and inventory management (Dutton, 2009).
Supply Chain Management is a combination of various processes that are procurement, regulations relating to law, sales, transport, and financing including other factors. Managers, especially those at the top level are often not conversant with the factors and hence ignore issues related to SCM leaving them for the subordinate employees. This brings into light the importance of SCM and the need for managers to have knowledge of the concept. The management team pays little or no attention to SCM due to the lack of awareness of its inherent ability and potential in dealing with the most pertinent issues affecting the business (Rudzki, 2008). The dilemma here becomes whether the fault is on the top managers or supply chain managers for their failure to provide relevant information on the importance of SCM to top managers. Therefore, another reason attributed to the managers’ ignorance of SCM is the minimal coordination between the top management and the supply chain department and other relevant departments in the c...