Supply Chain Management And Its Feisty Advantages

If you are a part of the supply chain logistics

, you would be very well aware of its goal and if you dont belong to that sector, hear this out! Their main aim lies in rendering a competitive advantage, a spirited benefit to its triangular linkage- the company, their customers as well as their competitors! And a huge source of this advantage lies in the organizations ability to distinguish itself from the rest before its customers, its competitors. The next source comes from its strategy of functioning at a lower cost and thus enhancing better profits!

The supply chain advantage

Gone are the days when it was assumed that good products will market themselves; a competitive advantage is the target of almost all managers who are alerted by the market realities. The commercial benefit is basically derived either from a value advantage or cost advantage. This shows that firms would either have to have an advantage in cost or the value, or even a fusion of the advantages as per their choice and logistics.

On scrutinizing the cost and value advantage separately, it can be observed that a cost-advantage renders a lower profile of cost than the value advantage while the latter proffers the product a distinguished power over the competitors. supply chain logistics reveal that the low-cost producer will be the only threatening competitor in the market. Traditionally the only source of reducing costs was a higher sales volume. But now there are have improved methods to increase the efficacies and productivities than before and these significantly contribute to reduce the cost per unit!

Having said that, let us divert our attention to the consumer behavior in markets where they actually do not buy products but indirectly but benefits, or rather it is the delivery of the product is what consumers look for when purchasing a product. That is where the supply chain logistics strategize these days: giving additional functionalities to a product that will in turn bring it over the competition levels.

Thus, it can be now said that supply chain management companies who are neither service leading nor cost leading are surely going to find themselves thoroughly uncomfortable. Neither are their products distinguished from the rest not are they in an advantageous position with reference to the costs. Ultimately they lose out on their leadership route.

Finding a way out

It is very essential to have a balance in both the cost advantage as well as value advantage in the supply chain logistics. The strategies of cost leadership are orthodoxically based on the scales of economies and earned through sales volume. And thus the market share is considered to be very important.

In all, it can be concluded that all those organizations who are leaders in the future markets will easily achieve the twin peaks of excellence; one the cost advantage and other the service leadership!

by: Gregg

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