Supply Chain Management in small and large scale companies

1. Supply Chain
Management in Small
and Large Scale
Companies
BY: BAQER
ALMUROHIN

2. INTRODUCTION
• SCM which is abbreviation of supply chain
management is a set of activities that are used to
control, plan and execute the production of items
using raw materials and distributing the
manufactured products to target customers (Burns,
2017).
• It is also defined as collective sum of tools, techniques
and skills to enhance coordination between supply
and delivery of products or services from any sort of
small or large scale organization (Schönsleben, 2018).

3. ELEMENTS OF SUPPLY CHAIN
MANAGEMENT
Supply chain management consist of following four
elements:
• Integration
• Operations
• Purchasing
• Distribution

4. FUNCTIONS OF SUPPLY CHAIN
MANAGEMENT
• Supply chain management is equally important for both small and
large industries and businesses because rising profit is basic aim of
SCM in any sort of business (Burns, 2017).
• Enhancement in quality of customer services is first important
function of SCM for small and large scale businesses.
• Effective SCM ensure availability of right products at right place at
right time for all type of customers (Doktoralina & Apollo, 2019).

5. CONT….
• Solving issues after delivery of products is another function of
effective SCM in small and large scale companies (Doktoralina &
Apollo, 2019). That is why, effective SCM play an important role in
reshaping and enhancing the quality of customer’s services of both
small and large scale businesses.
• Reduction in operational costs is another major benefit and
importance of integrated SCM for small and large scale businesses.
• SCM reduce operational cost in many ways such as retailers are
dependent on effective SCM to receive the products on their stores
in short period of time to avoid any sorts of high inventory cost
(Burns, 2017).

6. CONT….
• Manufactures of small and large scale businesses also
dependent on SCM for delivery of parts and
materials to assemble the products for avoiding the
shortage of items or shutting down of their
production line.
• Improvement in financial position of companies is
another important function of SCM for small and
large scale businesses (Madudová, 2017).

7. DIFFERENCES IN SCM OF SMALL AND
LARGE SCALE COMPANIES
• Supply Chain Management (SCM) of small and large
scale companies is different in many aspects such:
• Bargaining Power.
• Involvement of employees.
• Cost and Scope of Distributions.
• Efficiency and Innovation.
• Logistics with Green theme and
Optimization.

8. BARGAINING POWER
• Small scale companies have less bargaining powers
because they just need items or materials in small
quantities from large scale companies or suppliers
(Doktoralina & Apollo, 2019).
• Small companies become unable to get fixed prices
breaks because they bought the items from suppliers or
retailers during short seasons.
• Large scale businesses have more bargaining power in
regard of SCM as compared to small scale business
(Schönsleben, 2018).

9. CONT….
• According to Madudová (2017), the reason behind this
fact is that large size companies have to purchase items
or materials to manufacture their products in big
quantities so they have chance to bargain price for the
materials with their suppliers.
• As comparison to large businesses, small suppliers are
dependent on large size resellers and bow to charge
less prices for maintenance of their business (Madudová,
2017).
• At the end, large scale businesses become more
profitable as compared to small scale businesses.

10. INVOLVEMENT OF EMPLOYEES
• Availability of financial resource allows the large scale business to
hire separate persons specified for SCM. That is why; mostly large
scale businesses in United States and all over the world contain
general supply manager, logistic manager, operation manager,
distribution manager, product manager and many more higher
posts and lower post of SCM (Burns, 2017).
• This allows the all individuals of SCM department of large scale
businesses to focus on their individual responsibilities and thus show
maximum efficiency.

11. CONT….
• Small scale companies because of lack of financial resource could
not afford to hire more staff members for SCM departments. That is
why; less number of employees or only managers is responsible for
all operations of SCM in small scale companies (Liboni et al., 2019).
• This enforces them to handle multi-task at a time and thus play
negative role in their overall performance.
• Their involvement with roles and responsibilities regarding SCM is
less as compared to the involvement of SCM team in large scale
organizations (Burns, 2017).

12. COST AND DISTRIBUTION
• SCM operations are very simple in small scale companies, so margin
of error in SCM is very less in small scale companies (Schönsleben,
2018). That is why because of less complexity and size, small scale
businesses spent little financial resources on SCM.
• Complexity in SCM of large scale companies is more as compared
to small companies. That is why; to reduce any risk that could cause
big financial losses, large scale company’s needs to purchase
expensive technologies, infrastructure and software to bring perfect
in their SCM. Thus, it cost more to large scale companies in SCM
(Lengnick-Hall et al., 2013).

13. EFFICIENCY AND INNOVATION
• Basically small scale companies have more innovation
and creativity in their SCM because less number of
employees is available in their SCM departments. In
this way, each person has more responsibilities in
SCM of small companies (Doktoralina & Apollo, 2019).
• This enables the employees of small companies to
become multi-talented and innovative to perform
their task because their employees related to SCM
got a chance to think out of box.

14. CONT….
• SCM in large scale companies compromises of many
employees and each employee has to perform their
specified task (Lengnick-Hall et al., 2013).
• There is lack of multi-tasking and large scale companies
mostly depend on systematic approaches with help of
software and technologies.
• That is why, dependence on software, technologies and
lack of multi-tasking, level of innovation and creativity in
SCM of large scale companies is less as compared to
small scale companies (Burns, 2017).

15. LOGISTICS WITH GREEN THEME AND
OPTIMIZATION
• Green logistics in SCM means usage of storage,
transportation, packaging and processing
technologies that ensure the protection of
environmental sources and logistic operations makes
the SCM environmental friendly.
• The main purpose of applying green logistic in SCM is
to establish the “win-win” consequences so that
environment could be preserved in all aspects (Burns,
2017).

16. CONT….
• Large scale companies are able to adopt green logistics
easily and also becoming able to have green SCM
because of availability of financial resources, advanced
technologies and integration of the automated systems
of SCM (Liboni et al., 2019).
• SCM of small scale companies do not support to adopt
the green theme of logistics because of lack of financial
resources and inability to adopting recent and advanced
technologies.
• That is why; SCM of large scale companies are proving
environmental friendly as compared to the SCM of small
scale companies (Doktoralina & Apollo, 2019).

17. CONCLUSION
• Supply chain management is collective sum of tools, techniques and
skills to enhance coordination between supply and delivery of
products or services from any sort of small or large scale
organization.
• Purchasing, logistic and operations are three main areas of supply
chain management (SCM) of both small and large scale companies.
• Supply chain management (SCM) of a small and large scale business
is different in regard of the bargaining power, involvement of
employees, cost and scope of distributions, efficiency, innovation
and logistics with green theme and optimization.

18. REFERENCES
• Schönsleben, P. (2018). Logistics, Operations, and Supply Chain
Management. Integral. Logistics Management, 3-59.
doi:10.4324/9781315368320-2
• Burns, L. (2017). An extended framework for supply chain risk
management: Incorporating the complexities of emerging
industries and large-scale systems. International Journal of
Manufacturing Technology and Management, 31(1/2/3), 217.
doi:10.1504/ijmtm.2017.082010
• Doktoralina, C. M., & Apollo, A. (2019). The contribution of
strategic management accounting in supply chain outcomes
and logistic firm profitability. Uncertain Supply Chain
Management, 145-156. doi:10.5267/j.uscm.2018.10.010

19. CONT….
• Madudová, E. (2017). Creative industries value chain:
The value chain logic in supply chain
relationships. Marketing and Branding Research, 4(3),
227-235. doi:10.33844/mbr.2017.60236.
• Liboni, L. B., Cezarino, L. O., Jabbour, C. J., Oliveira, B.
G., & Stefanelli, N. O. (2019). Smart industry and
the pathways to HRM 4.0: Implications for
SCM. Supply Chain Management: An International
Journal, 24(1), 124-146. doi:10.1108/scm-03-2018-0150