Should Sales Be Included In a Supply Chain Management System?

Supply Chain Management System

  1. Research Topic:

Should Sales Be Included In a Supply Chain Management System?

       2. Research Process

In this research approach, I would be trying to investigate the different elements of the Supply Chain Management System and try to see how sales could be included in the documentations to be created accordingly. I do expected that upon investigation of such elements, I would be able to find whether or not adding in sales into the plotting of the system’s operation could provide positive impact on how supply chain could be fully directed by particular businesses in the manufacturing industry. The reason why the chosen focus is the manufacturing industry is that it is mostly the one industry that handles supply operations with allied organization in the most frequent manner. Examining their operation on manufacturing depending on their supply management approach is expected to give a reflective understanding on how sales reports could actually affect the overall system of supply schedules and budgeting allowances.

       3. Researched Information

According to distinctive description on what SCMS or Supply Chain Management System is about, Cooper (et al, 1997) simply states that it is the process by which a network of operations based on supply relations that a company has with another organization is being managed (13). This operation involves the evaluation of the different aspects that affect the said transfer of values from one business venture to another. The network of connection between businesses involved in this management process could include more than two parties. This is the reason why it is every important that in establishing such a system, the network connections are clearly stated including that of the role that they take in connection with the business venture being pursued.

Since this research shall try to establish a connective relation between manufacturers and suppliers, it is then assumed that one manufacturing company would have a possibility of being interconnected to several suppliers for the raw materials that they need to order for the completion of their products, which are ready for market consumption. Such a network would then involve several points of value exchange between the organizations involved. Question is, with such exchange of values, should the point of sales be included in such a recorded presentation of the chain of operation between businesses and entities involved in the supply chain management system?

Sales, in a way, is the resulting end from the values exchanged between the business and the primary consumers in the market. In this case, sales is expected to have its own branch of business evaluation. Nevertheless, since business operations comprise of the different chain of events happening in relation to the different considerable occurrences of business connections directed to the creation of value, it could be realized how each operation cannot be fully set aside and put in division against the others. This is the reason why it is very important that all operational end-results of the businesses become interrelated hence making it easier for the administrators to see how the budgeting systems could actually create a great impact on how the entire organization operators as a whole. Considerably, the value of the organization’s scheduled sales results affect the being of the entire organization as a business. Being dedicated to such process of providing for the market it hopes to serve, each manufacturing organization is expected to make sales a relative part of their supply chain management system.

The elements of the SCM system provide a better idea on how to add in sales into the reports and documentations that present the said regulations of business operations. What are these elements and what specific role do they perform in the documented reports? These elements include the following points:

  • Raw materials
  • Components of business based on the concepts of production
  • Manufacturer
  • Retailer
  • Consumer

See how the chain of operators in the SCM are interconnected based on the values that they represent in the business connections they have established (Halldorsson, et al, 2007, 284). First in the line are the suppliers of the raw materials. They are the first to determine whether or not the raw materials would fit the concept of product development that the manufacturers intend to establish their business upon. On the other end, the component between the suppliers and the manufacturers entail the concept of product development itself.

The concept of the creation of the product comprises of the ideas that involve what market it targets, what sector of the market it hopes to affect and how much are they willing to pay for the final product. This specific element is most often controlled by the manufacturer based on the product plan they have. For instance, computer gadget manufacturers may create division of productions based on the separation of the market sectors they are serving. The gadgets they are to produce are actually dedicated to the paying capacity of their customers. Relatively, it could be understood that the raw materials to be used for the creation of the said products should be priced reasonably according to the condition of market value that the customers are willing to pay for. The raw materials and their prices should be fully controlled and managed so as to not go over the paying capacity of the market therefore being subjected to the possibility of losing profit.

The manufacturer on the end creates a great impact on the overall value of the connection of the business altogether. Since it is the manufacturer’s decision that would determine the supplier’s capacity to be within the bidding-end that would be accepted for the sake of the production’s cost efficiency approach. At this point, it could be understood that the manufacturers would be the primary actors in defining the overall operation of the system.

If the manufacturer is not the actual retailer at the same time, then a connection to several retailers should be established. Understandably, it could be realized that somehow, such connection with retailers also involves relative bidding. The retailers being at the end zone of the value exchange with the consumers ought to know how much they are to make from the bulk purchase of products that they make. It could be understood then that at this point, it is necessary that the exchange of values between the manufacturer and the retailer is made clear. The consumers, being placed at the end point of the system, are the ones who have an overall control on how all the other businesses are able to establish their collaborative connections (Movahedi, et al, 2009, 78). The willingness of the consumers to pay for the products based on the current trend in the market does have a great impact on how the entire system operates.

As observed from the diagram noted herein, it could be realized that the system operates fully with the cooperation of all the actors involved. Notably, it is because of this that the sales reports coming from the retailers and the exchange of value between retailers and manufacturers should be included in the decisive reports for the presentation of the entire system’s development in connection with business collaboration options (Halldorsson, et al, 2007, 285). With sales being included in the system, it is possible that the other budget schedules would be fully controlled and managed accordingly. Being able to see how much profit could be expected from a particular system of operation is important in assuring the business of good returns.

In the diagrams presented herein shows the different factors that should be included in the supply management system on the part of the manufacturers.

Observably, it could be understood that the supply management operation shown herein have a great impact on how modern operations of values exchange specifically involve the condition of seeking an understanding on how the different business operations involved should be added into the system. Relatively though, this presentation does not involve sales inclusion in it. Nevertheless, its impact could provide a stronger foundation for the completion of all the other operations’ completion. Asset management, logistics, procurement and procurement all need budget schedules. It is because of this that the supply management should include sales report. Notably, the capacity to sell and earn profit from the production shall also provide a greater sense of dictation on how the entire system of supply management could be handled accordingly. The money that comes in from all the operations shall determine where adjustments are likely needed.

          4. Conclusion

As seen from the different presentations shown in this research, sales reports recorded along with the entire system of supply chain management approach, shall provide a more considerable development of operations based on the profit that is practically incurred by the business in the market. Relatively, the sales reports are needed to have a great impact on how the decisions are made between entities and organizations that are involved in the system. The monetary factor that creates the overall value of the operation of the different entities involved in the collaborative connection of businesses have a specific control on how suppliers, manufacturers and retailers are able to meet with the needs of their consumers in the market. The correlative connection of the said aspects of market-definition in connection with supply management shall actually make a distinctive indication on the business that needs to be completed between all the actors involved in the agreement. Considering all the factors of business supply and manufacturing involved shall provide the system a good foundation, however, when it comes to the involvement of sales in the reports included in the management system, it serves as the strength that binds all the other factors together.

        5. References

Cooper, M.C., Lambert, D.M., & Pagh, J. (1997) Supply Chain Management: More Than a New Name for Logistics. The International Journal of Logistics Management Vol 8, Iss 1, pp 1–14

Halldorsson, A., Kotzab, H., Mikkola, J. H., Skjoett-Larsen, T. (2007). Complementary theories to supply chain management. Supply Chain Management: An International Journal, Volume 12 Issue 4, 284-296.

Movahedi B., Lavassani K., Kumar V. (2009) Transition to B2B e-Marketplace Enabled Supply Chain: Readiness Assessment and Success Factors, The International Journal of Technology, Knowledge and Society, Volume 5, Issue 3, pp. 75–88.