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Problem

Explain how an effective supply chain can create a strong competitive advantage for the firms involved in it.

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Step 1/3

Supply chain management is process in the business that helps companies in linking manufacturer to the supplier of raw material. Supply chain management also helps in linking the manufacturer to the end user of the product.

Effective Supply chain management further helps the businesses in linking supplier and customers to enhance the efficiency and effectiveness.

Step 2/3

Effective Supply chain management can create a strong competitive advantage for a firm in following ways:

• With the help of effective supply chain management manufacturer can deliver the product at right time, which can create more demand of the product. The customers are satisfied with the services which would eventually lead to more demand from the customers.

• Effective supply chain management helps the businesses in reducing the costs. Therefore, the profits of the company would increase.

• A company that uses supply chain management in its operation can lead to reduction in the wastage that occurs due to lack of coordination between various departments in an organization.

• The company would be able to respond in a flexible way in case a company uses the supply chain management technique. Accompany would be able to response in a better manner as there would be adequate availability of the products in case of emergency due to better coordination between various departments.

Step 3/3

Thus, these are some of the ways in which a company can develop competitive advantage through the use of effective supply chain management.