SUPPLY CHAIN MANAGEMENT 3
Running Head: SUPPLY CHAIN MANAGEMENT 1
Understanding Supply Chain Management
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Author’s Note
Understanding Supply Chain Management
Sound management of supply chains of business organizations can have positive impacts on the success and growth of such organizations as far as profitability and productivity are concerned. Most managers are currently leveraging the benefits of best practices in the supply chain management to attain organizational goals and objectives (Laffy & Walters, 2016). Therefore, the purpose of this essay paper is to critically discuss the benefits of local sourcing for the retailers as discussed below;
There are numerous benefits of local sourcing that the retailers can enjoy. For instance, sourcing locally significantly helps in reducing logistic related costs such as transportation. Secondly, it also allows the management to have greater control over the quality of products supplied as it is possible to visit the suppliers to inspect the products. Thirdly, local sourcing also affords the retailers greater flexibility in the management of stock. They can stock more products when the demand increases with greater ease.
However, some of the disadvantages of local sourcing include the inability of some small-scale local suppliers to supply the products without compromising the supply chain efficiency. Most of these suppliers do not enjoy economies of scales thus, posing some challenges in the management of cash flows by the suppliers (Monczka, Handfield, Giunipero, & Patterson, 2015).
The varying definitions of local give different implications on the perceived advantages and disadvantages of local sourcing. Kroger provides a classic definition for local sourcing to imply the supply of products produced in the same location or state where the chain stores are located (Bowersox, Closs, & Cooper, 2002).
References
Bowersox, J. D., Closs, J. D., & Cooper, B. M. (2002). Supply chain logistics management (Vol. 2). New York, NY: McGraw-Hill.
Laffy, D., & Walters, D. (2016). Managing retail productivity and profitability. New York: Springer.
Monczka, M. R., Handfield, B. R., Giunipero, C. L., & Patterson, L. J. (2015). Purchasing and supply chain management. New York: Cengage Learning.