Supply Chain Management
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Supply chain management
Every business organization requires to have a proper flow of goods and services from the initial stages of transforming raw materials into finished products. The critical area that needs more focus in business practice is the process of supplying goods to customers. However, most business organizations face a lot of challenges in the methods of ensuring that their goods and services reach customers at the right time and in good shape. For instance, the food and beverage industries like PepsiCo incorporated company needs to have a continuous and smooth flow of its products to the market to ensure that the organization achieves its desired success. The primary reason why PepsiCo company needs better supply management is to boost their services to customers and generally reduce the unnecessary operating costs involved in storing goods for more extended periods or looking for markets. Most of the modern business organizations are very competitive; therefore, for a business to be more competitive in the market, it is required to have a proper supply chain. Some of the challenges that PepsiCo beverage company experiences in its supply chain management include; management of risks, relationships with suppliers, unpredictable delays, offering quality services to their customers, employing qualified personnel and the rapidly changing markets. All these challenges facing PepsiCo company in its supply chain management can be solved with proper mitigation measures.
Performing all business activities involves a lot of risk-taking because one cannot be sure of an initiative that can work effectively. However, proper risk management involves complete avoidance, reduction, transferring and acceptance of the risks. While choosing a particular supply chain, it is essential for PepsiCo to properly assess the possible risks associated with it that can hinder the effectiveness of other business activities. Some of the dangers experienced in the supply chains include; the risks of human behaviours towards the supply chain, the financial risks that may arise from running a particular supply chain, legal risks involved in choosing different supply chains, environmental dangers and risks involved in the organization of various projects. PepsiCo company must identify when to avoid altogether, reduce, transfer or accept a particular risk associated with supply chain management according to its possible effects upon the organization. In cases where the risks associated with running the supply chain are likely to affect the organization drastically, it is vital to avoid them (Cetinkaya et al., 2011). Reduction of the risks associated with the supply chain can only be significant when the organization is capable of controlling the risks. When the risks associated with the application of particular supply chains do not result in potential losses to the company, it is essential to accept them to determine their positive impacts on the organization.
To promote the success of a particular supply chain implemented in an organization, it is essential to have good relationships between the suppliers and the company. Good relationships between the suppliers and a business organization matter because the suppliers are the ones who are given the responsibility of taking the goods to the appropriate markets. The best ways that PepsiCo company can build its relationships with the suppliers of its products is to pay them on time so that they can be motivated to ensure that there is a continuous flow of the commodities. It is also essential for PepsiCo company to assist the suppliers in growing and achieving further development for their benefits and the significant growth of the company. The most important thing that PepsiCo company needs to consider to build stronger relationships with its suppliers is to regularly update them on the new products and strategic changes that will enable them to have proper preparations in their supply programs according to the changes. It is easier to consolidate the supply chain when there is a positive relationship between an organization and its suppliers (Folinas & Fotiadis, 2017). Furthermore, healthier relationships between companies and their suppliers promote continuous growth of the companies and significant reduction of the costs involved in running the supply chains.
When the supply chains are disrupted in various ways, there occur significant delays in shipping products to the appropriate markets. Delay of the supply of perishable commodities leads to their loss in value through expiring or getting spoilt. In most cases, the reputation of a company is negatively affected by constant delays in deliveries. Some of the primary causes of delays are; technical problems, excessive delivery volume, blockage of transportation ways, traffic congestions and adverse weather conditions. In PepsiCo beverage company, the delays in supply are mostly caused by technical errors that affect the processes of production and supply. To deal with delivery challenges, PepsiCo company needs to prepare proper minimum and maximum time setting of delivery and ensure that they adhere to the deadlines that they set. In case of some technical issues experienced in the production processes that are likely to affect the supply chain, it is essential for the business organization to properly communicate with the suppliers so that they can develop proper strategies of solving the supply issues. Sometimes, PepsiCo company experiences continuous delays as a result of having fewer order frequencies and lacking appropriate sales forecasts that help them to decide on the types of products to put in stock.
Apart from making a profit, it is crucial for business organizations to ensure that their supply of products is in good qualities to achieve the satisfaction of customers. In some cases, various processes that are involved in supplying commodities affect their rates primarily through delays. In other instances, PepsiCo company provides products to the market without having a proper understanding of the particular quality needs and requirements of their customers, leading to the creation of a negative business image. The biggest problem in the supply chain that affects the qualities of products that consumers acquire arises when a particular company does not embrace changes positively hence applies to vary little supervision in the supply processes. Every process in business requires proper guidance and maintenance to ensure that it runs smoothly and promotes positive achievements to the company. To improve the qualities of products in the supply chains, business organizations are required to have proper understandings of the costs involved in promoting improved attributes of products and solve all the problems affecting the supply chains (Folinas & Fotiadis, 2017). Moreover, business organizations need to prioritize employing qualified personnel who correctly understand what supply chain management entails. As a business, it is also imperative to increase the visibility of the supply chain, conduct regular training of the personnel involved in the supply chain and adequately engage proper information technology in facilitating complex supply chain management.
Seasonal changes that occur in different markets significantly affect the supply chains of various business organizations. It is not easy for the supply chains to adapt to the rapid market changes, especially the market changes in prices and rates of commodities. When the demand for various products decreases yet they are in high supply; their prices are likely to go down to attract more customers to purchase the commodities. Business organizations experience the challenges of being forced to reduce their costs and rates according to the decreasing demand, especially when their products are in excessive supply. The prices of commodities continuously fluctuate as a result of stable market supplies whereby, their order can either increase or decrease. To adapt to the rapid changes in the market that affect the supply of commodities, business organizations need to involve proper management of their organizations which can enable their businesses to perform appropriately in both low and high seasons (Folinas & Fotiadis, 2017). In complex cases of market changes, business organizations can hire consultants who can advise them accordingly and enable them to stay attuned to their targeted customers’ needs.
Many problems that business organizations experience in the management of their supply chains arise because of employing unqualified personnel who are not adequately aware of their responsibilities. The unskilled workers are not able to deal with the challenges experienced in the supply chains and develop better initiatives of promoting the better performance of their businesses. To effectively solve the challenges encountered in running the supply chains, it is essential for business organizations to only involve skilled workers in supply chain management and regularly train them on better ways of improving their skills further (Ernest, 2015). Other advantages of employing qualified personnel include; saving the costs involved in solving various challenges and improved innovation and creativity in running the supply chain.
To promote a better supply of commodities in the market, it is essential for business organizations like PepsiCo to apply the proper approaches involved in the management of supply chains. The three primary procedures involved in appropriate management of supply chains include; analytical, technological and relational systems. Through the advances in computer technology, technical supply management approaches are applied. Through changing the relationships within an organization and with other organizations, the relational methods of supply chain management are used.
In the modern world, technology has made different activities involved in supplying commodities easier through; development of faster means of transporting products to their required markets and proper tracking of the supply processes to ensure that the products reach the demands in their right quantities and qualities. Through improved technology, many customers can receive their orders faster and be able to take care of their urgent needs. Fast delivery of commodities promotes more affordability because there are no complicated and costly processes involved in the supply processes (Syensson, 2010). Customer satisfaction is the most important achievement that a business organization can have and it is best done through better and faster delivery. In the ancient times when technology was not adequately developed, the delays involved in transporting products from industries led to lack of guaranteed safety of the products because, in the processes of delays, some suppliers took advantage of selling some of the products along the way for their benefits. The application of the technological approach in the management of supply chains has enabled real-time tracking activities that are beneficial to business organizations. For instance, through real-time tracking, it is easier to recover the thefts of supplies and prevent unauthorized usage of the supplied products.
Proper management of business supply chains requires better relationships within a particular business organization and with other external business organizations and customers. Good relationships are generally suitable for all business activities because they promote teamwork and cooperation, which are the critical elements of successful running of activities. Through collaboration, the employees in particular business organizations can develop better ideas to apply in the management of their supply. Business organizations do not require geniuses to make better decisions for them, but through teamwork, better decisions can be made. Cooperation and good relations among the employees and suppliers of business organizations enable them to assist one another to achieve individual professional development that is very important for the growth of business organizations. Furthermore, because of good relations and teamwork, the supply chain management team can adequately divide work among different people according to their skills or areas of specialization (Paiva et al., 2020). To enhance better supply chain management, the relationships between business organizations with other organizations and with their customers is essential. Through strong business relationships, business organizations can advise each other accordingly about the supply patterns. Moreover, businesses that have strong relationships with each other can work together to share leads and find better suppliers for their commodities.
Business organizations are required to apply better choices of supply chains that can enable them to achieve their desired objectives. The best supply chain management approach to use in choosing effective supply chains is the analytical approach. Through the analytical process, it is possible to break down different problems into necessary solvable elements. Through applying analytical procedures, the problems experienced in the supply chains are made easier to solve. It is, therefore, crucial for business organizations to involve skilled people in finding proper analysis of particular issues for them to see the appropriate solutions. Many businesses fail in solving their problems correctly because of lacking adequate evaluation of the simple and complex issues that they experience. A problem can be solved by applying simple measures, yet it requires intricate attention (Mandal, 2020). Moreover, the analytical approach in supply chain management incorporates proper decision making, critical thinking, detailed attention and appropriate researching skills that are required to come up with proper solutions. Solving the problems experienced in supply chain management through analytical approaches promotes factual and logical reasoning that plays a very significant role in making proper decisions for the business.
Supply chain management is very complex and requires every business to follow the appropriate measures and approaches in conducting its activities. Most business organizations have acquired significant benefits from proper supply chain management that have enabled them to achieve more industrial growth. It is crucial to involve the right personnel to run the supply chains of business organizations because there are various risks associated with the supply processes. Keeping up with the demand in the market is an essential factor to consider in ensuring the proper running of the supply chain because there are a lot of seasonal fluctuations experienced in business demand and supply.
References
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Ernest Ochonma, P. (2015). Procurement and supply chain management: Emerging concepts, strategies and challenges. undefined.
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