The Pros And Cons Of Supply Chain Management

1708 Words7 Pages
1.0 Introduction According to Snyder and Hamdan (2009), they revise the current trends of inventory management on retailer of how does it work. The current technologies have revolutionized the manner on retailers operations. Not only that, it also allows them to experience the differences of business model too. However, the retailer focused on front-end systems and overlooked the importance of back-end operation such as supply chain management. Besides that, retailers also do have the option to distribute their product through several ways such as traditional method, drop-shipping or mixture of both strategies is known as hybrid technique. Retailers will also need to manage their stock out and to act accordingly in order not to lose sales…show more content…
It coordinates the activities of supply chain with the supplier and customer allows retailer to optimize the efficiency on the chain activities. With having a good collaboration with supplier and customers it would be the most valuable way to get goods to market. Therefore, by coordinating transportation, logistics and distribution activities with the best suppliers allow retailer to focus on quality and cost control. 2. Reduce direct and indirect cost For the first strength, it is to reduce direct and indirect cost. Reduce direct cost; the retail can reduce the employment cost such as driver and deliveryman. They no need to recruit the driver or deliveryman to help them delivery the stock. The retail can deliver the stock by them. In addition, indirect cost; the retail no need to pay commission to dealer. This is because the retail directly collects the stock from the supplier. They did not through the dealer to collect the stocks. Therefore, the stock will be cheap from the supplier than from the dealer. 3. Reduce capital…show more content…
Inventory management and reliance risk The weakness for using supply chain management is the inventory management and reliance risks. For supply chain management, it required the collaboration between retailer and supplier so they will become dependent on supplier for their product delivery. Therefore, if there is a delay delivery from supplier it will cause retailer to have empty shelves. When there is an empty shelf in retail outlet it will cause their customer to move to others competitor. 2. Slow delivery from supplier When the supplier only deliver the product to the customer based on their own convenience time than it will cause delay on delivery. It may cause retail to lose their customer trust and it will also lead them to dissatisfaction with the service. This might cause customer to shift to the others retailer that can provide a better service to them. 3. Miscommunication The supplier might have miscommunication with the retailer when they place order and error will occur during delivery. Therefore, supplier might need time to change it to the right product and to be delivered to the customer again. For example, when the customer order for black color product but it comes in white so they will need to do exchange to the right color and the customer will need to wait for it

More about The Pros And Cons Of Supply Chain Management

Open Document