What is the connection between the supply chain management and the competitive advantage?

Supplier chain management and a competitive advantage are connected because the effective management of the organization's supply chain can be used for a competitive advantage. The supply chain concerns the entire process involved in the production of a product or service, from the award of raw materials to the transport of the final product to consumers. A competitive advantage describes a process where a company can achieve lower selling prices for its products than other similar companies due to the advantage in the pre -production, production or post -production phase.

Integration of efficient supply chain management and competitive advantage is becoming increasingly important because of the effects of globalization. More companies now have subsidiaries and branches in more cities and countries than before. Effective administrative procedures must be used to increase the supply chain if the company wants to obtain any competitive advantage by other companies in the same industry. In addition to obtaining a competitive advantage, it is necessary to streamline the supplierThe chain so that the products send consumers during ordered durability.

One way the company can gain a competitive advantage through the supply chain management is a focus on competences and then outsourcing of other areas. For example, a company that produces athletic sneakers may decide to outsource the sources of raw materials and the production of sneakers in another area where production costs would cost less. Such a company could decide to focus on its competencies that could be designing new sneakers, handling of logistics and marketing of finished products.

This type of strategy can lead to a competitive advantage through decreased costs that will be converted to consumers, which will provide Compo Competitive edge over other companies. Other similar companies that produce athletic sneakers, notIt must be able to offer the same price reduction due to the fact that it is more to produce the same sneakers that the other company created in a fraction of their total cost. Such a price reduction may be due to a number of effective measures along the supply chain, including paying workers at lower wages. If the company is also able to produce sneakers in a country where raw materials are easily accessible, transport costs and save money. A company with cheaper production costs can be able to sell its sneakers at a reduced price and attract more consumers to buy more of their products.