¶ … Logistics in the Business Organization
Why have supply chain management issues often been ignored by senior management?
As an organization becomes more and more profitable, the managers perceive a lesser need for addressing issues in the supply chain (Dutton, 2009). One of the key causes encompasses the profitability of the company and the focus is on profit margin generated. With regard to companies that generate greater profit margins, while transport and logistics form a meager part of expenses, managers barely dedicate their time in supply chain management. Instead, they have a tendency of laying emphasis on what generates greater proceeds. Nonetheless, when the organization is in turmoil and having poor returns, managers will acknowledge the need for having an effective and efficacious supply chain. This is owing to the fact that every minimal expense will have an impact. As a result, every probable solution is sought after, when the margin of profit is deteriorating. Supply chain management is one of the manners in which an organization can boost its profit margin by having a well-timed distribution and managing of inventory from the starting point of procurement to the delivery to the consumers (Dutton, 2009; Rudski, 2008).
Customarily, supply chain management will encompass numerous operations, such as procurement, distribution, retail, transportation and even financing. At times, top-level managers might not have a proper understanding of this whole association. Therefore, lack of understanding of these aspects might result in ignoring the supply chain management. As a result, it is necessary to underline the significance of role played by supply chain management in order to make such top-level managers to understand its decisive role in the performance of the company (Robert, 2008). The argument made by the author is that managers end up ignoring supply chain management as they might not be completely cognizant of its competitive advantage with regard to resolving a number of the issue that are worrisome (Robert, 2008).
In addition, according to Robert (2008), one of the other reasons why senior management of companies constantly ignore logistics is owing to the fact that some of them are not completely cognizant of the benefits that come along with it. Lack of interest in the supply chain management and operations possibly make the senior management ignorant of the importance of this sector of its operations of the company. Conversely, this could be the result of supply chain managers failing to give insight and understanding to senior management regarding the prospective advantages of logistics for the company. Therefore, taking this last possibility into consideration, it can be inferred that the reason is because there is a lack of cooperation and link between senior management and the supply chain division of the company as well as other supportive divisions involved in this function (Robert, 2008).
Question 2: How would you convince senior management to focus more attention on supply chain management?
It is imperative for senior management to lay emphasis on supply chain management in order to realize what is fully achievable. One of the ways of convincing senior management is to bring into focus a number of the objectives predetermined by the management to accomplish (Robert, 2008). A number of these objectives consist of decreasing risks and thereby safeguard generated revenues and returns, attaining organizational growth subsequent to every year, exceed the already set proceeds, increasing the return on equity of the shareholders and also attaining a competitive edge (Robert, 2008). This required plan thereto would cause the management take into account all areas of operations, including SCM, thereby realizing its potential and importance. Another way of attaining conviction is having proper communication with senior management to generate cognizance regarding its potential in realizing their objectives. Such an action will necessitate deliberations to seek the attention of the senior management. This would necessitate furnishing particulars and information of how supply management can advance and accomplish a number of their objectives, for instance maximizing the shareholder's equity. This can be undertaken through cost saving which is realizable through supply chain and increasing proceeds through customer satisfaction (Dutton, 2009). This improves the profit margin while simultaneously decreases expenses, which has a remarkable influence on the performance of the company. To detail the conception, numerous other approaches to influence senior management can be employed, for instance presenting the experience of other corporations that have realized accomplishment through judicious deployment of supply chain management. Presenting the senior management with the status and position of the companies prior to and subsequent...
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now