The Present and Future Outlook of Process Improvement to Global Supply Chain Management

Abstract

The supply chain management process improvement elements of six sigma, benchmarking, reengineering and process mapping can serve as a tool for the identification, recovery from root causes of problems, and inefficiencies in the global organizations. Process improvement optimizes production, cost, and efficiencies in organizations pursuits of production, distribution, and sales. Process improvement for the next five years will be geared towards shorter time of product development, cost reduction, quality, and e- business. The e- business will improve customer services, information quality, planning collaboration, and the supply network activities. Successful process improvement management can lead to businesses operated internationally, thus more profits and giving backs to the communities in which they operate in the form of libraries, hospitals, clinics, and schools.

Keywords: e-business, giving backs, optimization, product development, process improvement, supply network

Supply Chain management (SCM) is the correlation of a network interconnected businesses and operations that need to take place for the output of a product (Stadtler, 2005). From the companies’ floors, and retail outlets products are offered to consumers to purchase where these consumers have the final decision in selecting their products of choice and making purchases to conclude the supply chain. The importance of the global supply chain cannot be over emphasized if companies want to increase their profits, expand, and be sustainable into the future.

Thesis Statement

How does process improvement in the global supply chain management help in the eradication of the root cause of problems and inefficiencies faced in the business environment?

Analysis of the state of the field of global supply chain management

Many at times companies develop their products without considering SCM (Dittmann, 2009). It may be a good product, but if considerations are not given to where the resources will come from, business failure will be the result. However, successful businesses must initially consider what to produce, where to get the appropriate resources, how to produce and distribute to maximize profit. Knowing the impact of resources will enable company’s operations to prepare for the real world and compete in today’s fast-moving environment (Sabbaghi & Vaidyanathan, 2008). Systems supporting manufacturing planning and control (MPC) practices are vigorously being enhanced. These elements included; inventory control, labor, cost planning, material planning, sales and operations planning (Olson et al., 2013). Some organizations are using the effective supply chain management to manage cost and promote efficiency. Beyond cost and efficiency, organizations are at lost because there is more to the supply chain process.

Description of the important issues in the field of global supply chain management

Resource management system which integrates multiple functional areas within an organization including production, distribution, finance, accounting, operation, sales, purchase, and personnel management are being pursued (Lee et al., 2011). Managers have ensured they obtain only the level of resources necessary to support operations because stagnant resources can be a drain on a company’s operations (Holweg, Leinbacher, & Zinn, 2010). This is one of the important areas to consider when developing a company’s suppliers and partners. Growth is inevitable provided companies have market to their products. In far-fetched, knowing the level of risk a company is willing to take is important. This allows management to prepare and give the risks the needed understanding for the decisions making. Shacklett (2012) confirmed that companies need to determine what kind of relationship to have with its suppliers. Generally, companies need to consider multiple areas in their supply chain management as an occurrence in one area can affect operations in others. Wu (2006) postulated that if a company was going to expand, importance of diversification must come to play to ensure no one loss will completely shut down the company’s operations. Houlihan, (1987) when operating internationally, the company needs to consider more than just their own local production area, but also cultural, transportation and economics. Several factors have been identified as contributors to failures in ERP system implementation, but little evidence has surfaced regarding the most influential factor(s) causing failures with ERP system implementation with global partners. Organizations should identify critical success factors (CSFs) related to the organization’s key objectives, departmental objectives, ERP objectives, and then determine the most appropriate critical success strategies (CSSs) for those objectives (Yeh & Xu, 2013).

Top 10 CSFs for implementing an ERP system which need to be address are; top management support, project team competence, interdepartmental co-operation, clear goals and objectives, project management, interdepartmental communication, management of expectations, project champion, vendor support, and careful package selection (Mehrjerdi, 2010). Implementation can be divided among 5 phases; feasibility study, planning phase, implementation decisions, implementation, and post implementation (Mehrjerdi, 2010).

Strategy development, project initiation, software selection, process mapping, configuration (setting the ERP templates with organizational data), testing, and live launching are also very important (Anderson et al., 2011).

Background Information for the Present and Future Outlook of Process Improvement in the Global Supply Chain Management.

Siha & Saad (2008) surveyed and analyzed the current process improvement (PI) approaches, their empirical results reported in the literature, developed a conceptual framework and implementation guidelines. The design was based on synthesis of the lessons learned from this empirical evidence along with concepts drawn from economics, and operations management. It was found that the framework would serve as a diagnostic tool for identification and recovering from problems encountered in the business environments. The guidelines provided for practicing managers two categories: specific; tool-based, and general; system-based. The success and failure of the four main PI approaches, were synthesized as six sigma, benchmarking, reengineering and process mapping.

Increasingly, supply chain management is being recognized as the management of key business processes across the network of organizations that comprise the supply chain. While many have recognized the benefits of a process approach to managing the business and the supply chain (Keely, Croxton, García-Dastugue, Lambert, & Rogers, (2001). Industries using the process improvement practices stand to make higher gains and profits, thus invariably given back sizeable amounts to the communities in which they operate. Normally the given backs played the part in developing the area where the industries are situated like building schools, libraries, hospitals, clinics and providing good source of drinking water.

Lean Six Sigma in the Global Supply Chain Management

Christopher & Lee (2004) argued that today's marketplace was characterized by turbulence and uncertainty. Market turbulence has increased for several reasons. The authors’ postulated that the demand in almost every industrial sector seemed to be more volatile than was the case in the past. The authors’ continued to say that the product and technology lifecycles have shortened significantly, and competitive product introductions made life-cycle demand difficult to predict. At the same time the vulnerability of supply chains to disturbance and disruption has increased. The authors’ indicated the effect of external events such as wars, strikes or terrorist attacks, and the impact of changes in business strategy. Many companies have experienced a change in their supply chain risk profile as a result of changes in their business models, for example the adoption of lean six sigma practices, outsourcing and the tendency to reduce the size of the supplier base. It is argued that supply chain confidence will increase in proportion to the quality of supply chain information.

[...]