Supply Chain Management

Executive Summary:

Supply chain management forms an integral part of any company in order to increase the competitive advantage and to provide better service to customers; a company must put emphasis to the supply chain management. The purpose of the report is to highlight the various factors that are required to achieve a strategic supply chain management. The problems of the Mazoon Electricity Company in their supply chain management have been highlight with recommendation to make their supply chain better by linking with various theoretical concepts which is discussed in the theoretical review of the report. The report aims to highlight the various important theories relating to outsourcing, E-commerce in supply functions, cost effectiveness, relationship with other departments the organization and links them with the problems of the organization.

Table of Contents

Executive Summary 2

Introduction 4

Organizational background 4

Theoretical review 5

Problems in supply chain management of Mazoon Electricity Company 10

Analysis 11

Recommendation 12

Conclusion 15

Bibliography 16

Introduction:

Operations management forms an important part of every organization. Operations management can be defined as the process that involves design, execution and control of operations by converting various resources into the desired goods and services which matches with the objectives and the mission of the organization (Galloway, 1996). Globalization has led to increased global competitiveness due to changes in the preferences of the customers, free trade, local market saturation and many more. The effects of competitiveness and its impact on the supply chain management on the operations of an organization will be discussed in this report.

The purpose of the report is to review the supply chain management of an organization which is an important part of operations management along with theoretical concepts, analysis and recommendation. The report aims to analyze the theoretical concepts relating to supply chain management from various books and journals and link them to the challenges in operations faced by the organization due to this aspect.

Organizational background:

Mazoon Electricity Company SAOC (MZEC) is a closed Omani joint stock company that is registered under the Commercial Companies Law of Oman. At present the company undertakes distribution and supply of electricity in Dakiliya, Sharqiya and South AL Batinah regions under a license that is issued by the Authority of Electricity Regulation, Oman (AER). The mission of the organization is to deliver electricity to their customers safely, reliably and economically in accordance with the licence. The Vision of the company is to be one of the leading electricity distributions and supply companies in the region by 2016. The company lays a strong focus on their customers with 18 district offices and 35 collection centres that serve the customers within 25 wilayats that are located in the three licensed areas (Mazoon Electricity Company SAOC, 2012).

Theoretical review :

Supply chain forms an integral part of any company and businesses depends on a large extent to their supply chains to provide them a competitive edge and also makes them survive in the fierce competitive market. There have been many research on the this field and we can define supply chain management as the coordination of production, inventory, location, transportation among the various participants of the supply chain in order to achieve the best mix of responsiveness and efficiency for the market in which the organization is serving (Hugos, 2011).

The traditional view of supply chain management focus only on a narrow perspective and it involves only obtaining goods and services and delivering them. This traditional approach view supply chain as tactical and transactional in nature and as cost centres rather than drivers for revenue. However the modern approach focuses on various assumptions and practices and concentrates on the strategic approach to supply chain which can help the firm increase competiveness and also enhance the performance of the firm to a great extent (Hult, et al., 2007). This modern approach contradicts much popular theory that supply chains should be based on speed as this approach is of the belief speed in supply chain does not lead to satisfaction of customers. This theory rather focuses on the concept that best supply chains strive to excel along four important competitive priorities. They are (Hult, et al., 2006):

Speed: This referred to as cycle time concentrates on the time duration form initiation to the final delivery.

Quality: This refers to the safety and the reliability of the supply chains

Cost management: The efforts of the supply chains to enhance the value by either reducing the expenses or by providing more customer benefits at the same price.

Flexibility: This refers to the pace at which a supply chain can change and adapt itself due to changes in the market or the environment.

An organization needs to balance these four metrics in order to provide the best level to total value added.

Many organizations like Wal-Mart, Toyota and Zara have adapted these practices of strategic supply chains and have used them as strong competitive weapons to stay ahead of their competitors. The following figure shows the best value supply chains (Ketchen, et al., 2008).

In recent times, outsourcing and supply chain management have gained immense attention as it is recognized as a very important process that enhances the performance and the profit of organizations. It is on the management to make the correct decisions as to whether implement only supply chain management, both outsourcing and supply chain management or only outsourcing. Many organizations are incorporating both outsourcing and supply chain management as it increases the operating flexibility of the organization and also transfer the risk to third party. This also gives the company opportunity to focus on the core processes while monitoring the performance of the supply chain by setting a standard that the service provider must meet. Outsourcing