explains supply chain as a network

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KIRWA SAMOEI
BB3/17225/14
BSC AGRIBUSINESS MANAGEMENT
FACULTY OF BUSINESS STUDIES
DEPARTMENT OF BUSINESS ADMINISTRATION
CHUKA UNIVERSITY
ASSIGNMENT ONE

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Organizations have been always focusing on their products and neglect the satisfaction of the
end consumers of their goods and services which led to their poor performance as they were
unable to maintain their customers for longer time and enjoy profitable relationship with them.
This led to some organization to carry out research to establish the cause of ineffectiveness in
reaching out more consumers who were scattered in different locations and it was therefore
found that organizations should look overall movement of the materials and information from
the starting point to end, allowing organization to see the value of creating partnership and the
value of working together to ensure the best possible value are provided to the end consumers.
This gave birth to the rise of supply chain network which most of the organization have adopted
after knowing the importance of developing strong partnership within the supply network
which has a flow on effect the organizations’ consumers and it results to better communication
that increase productivity and efficiency.
Supply chain can be defined as the network of organization that are involved by upstream and
downstream relationship, in the different processes and activities that produce value in form of
products and services offered to the final consumers ( Martin, 1992). With advancement in
technology in the recent past most of business organization have develop their chain into a
more complex structure which involves a better level of interdependence and connectivity
between more organizations and therefore this what makes it to be a network ( Nigel, Stuart
Aand Robert, 2009). This supply chain network consists of the structures which include external
structures, production centers, distribution centers, demand zones and finally transportation
assets which will facilitates the flow of information which is the demand from the end-
consumers to the proceeding organization in the network, and materials which is the
movement of goods from raw primary goods such as wool, coal trees among others between
two or more organizations which are found in various parts of the world and for this reason
supply chain is a network ( Walid and Alain, 2012). This will therefore means that goods
produced in production centers will have to pass distribution centers which are made up of
channels, be transported using vehicles that are either owned by the organization or those that
are hired, and finally to demand zones where final consumers of the organization’s goods and
services are located which will in turn gives their feedback to the organization about their
satisfaction on goods and services offered to them by the organization, thus developing a
relationships of processes within the organizations that are interdependent on each other and
connected.
This will help organization to greatly reduce the cost used to in supplying their goods and
services to various destinations in the world and this can achieved by strategically designing the
network to incorporates all facilities, production means, products and finally transportation
assets that are either owned by the organization or hired that enhances supply chain
operations and flow of products. It can also be design to constitutes details of numbers and

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locations of plants, warehouses and supplier base making it a combination of nodes with the
ability and capacity connected by lanes to facilitate product movement between facilities.
Although, supply chain network comes with an advantage of cost reduction, there are future
uncertainties and therefore there is need to ensure the network that is versatile to cope with
these uncertainties (Walid and Alain, 2012).
Relationship in supply Chain
There various relationship in the supply chain such as strategic relationship, tactical
relationship, transactional relationship, internal relationship, relationship among members of
supply chain community among others. In this assignment, I will major in a few examples of
relationship within the supply chain as explain below:
a) The governmental dichotomy
This is the relationship between businesses and all level of government including counties and
national governments. It plays a key role in providing restrictions and incentives, regulations
and freedom, and roadblock and opportunities for individual organization. They also provide
avenues for teaching and research, and they can help in creating environment that
accommodates consultancies and development. Programs and action at both county and
national government exert powerful influence on where supply chain operations are located,
how successful they are, and how committed they become to maintaining a physical presence
and investment in localities, regions and countries.
b) Within the supply chain
This relationship involve suppliers and customers in the organization who are connected in
ways that allow them to easily exchange information, demand data and visibility of status. This
means communicating demands events and the direction of strategic plans, linking information
system and jointly leveraging the potential for internet and other electronic communication.
c) Within the company
This is a relationship between those who are involved in manufacturing and distribution of
products and they should have better communication to enhance effective sales and
marketing, sourcing and procurement functions. There is also a need to have joint planning and

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joint problem solving by parties involved in order to allow anyone to give views about the
product development and discussion about stock keeping unit.
d) Logistic service providers
This is the relationship between company and service providers which allow communication
from the outset beginning with the evaluation and selection processes. Multilevel working
relationship throughout both organization provide the key to making processes work and to
effectively solving the problem that inevitably crop up. Logistic service providers play a role of
third party lurking in the underbrush of supply chain management. They are found everywhere
meeting, seminars, conference and convention.
What will happen when one point of supply chain is broken?
The collaborative relationship within organization, that bring together buyers and suppliers,
facilitates innovation which is a pillar in achieving growth and resilience. Suppliers are the main
source of innovation-driven procurement and do provide procurement functions with tools and
technology to facilitate procurement success (Capgemini , 2012) therefore there is strong
interdependence that exist within structure that makes up supply chain network, and
therefore should a failure occur at any given point, supply network will be adversely affected
in such a way that the effectiveness of the network is poor for example if transportation sector
is broken the goods and services produced in the organization will not reach the final
consumers. This will result to the following:
a) Dissatisfaction of consumers as their needs and wants will not be catered for
accordingly by the organization leading to little trust and poor relationship.
b) Slow innovation within the organization as the main sources of innovation, suppliers and
customers are edge out of the network. This will pose threat to growth and expansion of
the organization.
c) Ineffective flow of information and materials from the starting point to the end where
consumers are located.
In conclusion the organizations should place relationship at center of supply chain network in
order to be more collaborative and effective dynamic.

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Supply Chain as Web
Supply chain needs to have multiple relationships and many paths that enables the movement
of products and information as illustrated diagram in the figure 1 in which supply chain is a
web of participants and resources. This network is of great importance and therefore
organization must dynamically draw upon its available internal capabilities and the external
resources of its supply chain to satisfy consumers requirement. It also facilitate the
procurement of materials, transformation of material into desired products, and distribution of
the product customers.
Supply chain structure and relationship varies from one organization to another and it is
influenced by its industry, geographic scope of activity supply base, product variety, fulfillment
methods, and demand pattern for example a multinational manufacturer and local farm-to-
table restaurant. Both organization will benefits from strong and stable supply chain. However,
the manufacturer’s network is at greater risk of disruption and must integrate geographically
diverse suppliers with multiple selling channels.

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Illustration of Supply Chain as a Web
Figure 1: Illustration of supply chain as a web

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REFERENCES
Copgemini (2013). 2012-2013 annual report of Copgemini consulting operation retrieved from
Martin C. (1992) Logistics and supply chain management ( 4th ed). London, FT Press Publishers
Nigel S., Stuarts C. Robert J. (1st ,Jan, 2009) Operations and Process Management: Principle and
Practice for Strategic management. New Jersey, Prentice Hall Publishers.
Walid K., Alain M (16th ,December, 2012.) “Scenario-based Supply Chain Network risk
modeling.” European Journal of Operational Research iss.223 Vol. 3 Pg. 644-658. Retrieved
from http://www.doi.10.1016/j.ejor.2012.06.027

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