Running head: INDIVIDUAL PROJECT-SUPPLY CHAIN MANAGEMENT 1
Individual Project-Supply Chain Management
Introduction
There exist an extensive range of entities that play a vital role in supply chain management regarding the flow of capital, information, and materials (Hugos, 2018). The extent and size of participants differ depending on factors such as customer service requirements, supply and demand’s geographic dispersion, and the product that is involved. Therefore, it is with justification to point out that each supply chain is unique and shares little or no similarity with another one. The most reasonable way of differentiating participants in supply chain management is by pointing out their product possession stake. Thus, if an individual owns a part of the product at diverse stages of the supply chain, then they are referred to as direct stakeholders. The direct stakeholders in a supply chain include final consumers, manufacturers, distributors, and retailers (Hugos, 2018). Other entities that play a crucial role in the safe flow of money, information, and materials although they don’t claim ownership of the product in the supply chain include indirect material suppliers, equipment providers, government agencies, financial institutions, consultancies, information technology companies, and logistics services providers. This paper examines the roles of major participants that is producers, distributors, retailers, and customers in the supply chain management, and also includes a thorough elucidation of the make or buy decisions, the individual who makes the decisions, and the important elements that must be taken into account while making such decisions.
Producers
They are also known as manufacturers. These are companies that are involved in the initial assembly and production of a product, service or equipment. The companies also encompass those engaged in the production of raw materials and those that produce the end products. Some of the activities the producers of raw materials are involved with include timber cutting, gas and oil drilling, and mineral mining. Additionally, other producers focus on fishing, animal, and land farming. On the other hand, manufacturers of finished goods utilize the raw materials and other assemblies produced by other manufacturers to develop their end-products (Hugos, 2018).
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Distributors
They are also known as wholesalers. Distributors are external companies that trade on behave of the producers or suppliers directly. The distributors also collect consumer’s payments and keep an inventory of the products from the manufacturer. Additionally, wholesalers typically vend products in bulk that a single consumer purchases. Further, the distributor plats the role of buffering the producer in manufactured goods demand through stocking inventory as well as marketing the goods and servicing the consumers. From the customer’s perspective, wholesalers accomplish the “Time and Place” function, that is, distributors enable delivering of merchandise when and where the consumer requires them.
Therefore, a distributor can be defined as the company purchases a considerable amount of manufactured goods from the manufacturer and then sells them to the customers. Other than marketing the goods, the distributor also offers various functions including post-sales services, customer support, product transportation, warehouse operations, and inventory management. On the other hand, a company that only brokers manufactured good between the manufacturer and consumer and does not in any way claim ownership can also be called a distributor. Such distributors mainly perform functions of sales and promotion. Notably, in both kinds of distributors, there services and products evolve with the continual changes in consumer needs. They keep track of the consumer needs and match them with the available merchandise.
Retailers
Retailer companies or individuals form the main link to the immediate consumers. They stock products and sell them in miniature amounts to the consumers. These kinds of companies keep close track of their customers’ preferences and requirements and keep up to date stock on the products that are in demand. Additionally, retailers market to its consumers by mostly using a combination of convenience, service, product selection, and price in order to attract the consumers to purchase the products they are selling(Hugos, 2018). For example, while discount department stores use wide product selection and price to draw the customer attention, upscale specialty stores offer high levels of services and a unique line of products. Similarly, restaurants such as those concerned with fast food employ use of low prices and convenience to attract customers.
Customers
They are also referred to as consumers. These are individuals or companies that purchase and utilize the manufactured goods. Additionally, a customer may also be an organization that buys manufactured goods to integrate them into other products that the organization later sells to other consumers. On the other hand, the customer can be the final user of the product, that is, purchases the product for consumption purposes (Hugos, 2018).
The Make-or-Buy Decision
A Make/Buy decision is also known as outsourcing decision. It is a decision the management makes as to whether a given component should be manufactured in-house or should be purchased from an external manufacturer (Martin, 2015). Nowadays, companies that are faced with such a dilemma as to whether it has the capabilities of manufacturing a product in-house or should outsourcing be the right way forward have chosen to use the Make-or-Buy decision. The Chief Prosecutor Officer plays a crucial role in guiding the management on the right decision to make. He/she leads enterprise units that conduct a thorough analysis on rewards, risks, benefits, and costs of outsourcing, Similarly the Chief Prosecutor Officer evaluates the implications of manufacturing the product in-house (Schwarting & Weissbarth, 2011).
Before deciding to forgo manufacturing of the product internally, an organization must conduct an assessment to evaluate its main capabilities and compare them to the set standards. Since the Chief Prosecutor Officer possesses the ability to oversee and manage third-party manufacturers, therefore he/she can guide the company since he/she knows the right questions to pose to determine the competencies of the company. Among the chief concerns, the Chief Prosecutor Officer may consider before making the decision include both quantitative and qualitative factors.
Quantitative factors are defined as the increase in costs due to deciding to manufacture a component internally or purchase it from an external manufacturer. Some of the qualitative factors considered include the manufacturing capability on hand to produce the desired product, the cost purchasing each unit, and the each unit’s incremental production cost. On the other hand, qualitative factors mainly those values of the company that cannot be reduced to numbers. The qualitative factors considered in Make-or- Buy decision may include the impact of the decision on customers, employees and suppliers, the reliability of suppliers, and the quality of the component measurable with prior experience in the same field ("Make-or-Buy Decision", 2013).
References
Hugos, M. (2018). Essentials of supply chain management (4th ed.). Wiley.
Martin. (2015). Step-by-step guide to Make or Buy Decision. Retrieved from https://www.cleverism.com/make-or-buy-decision-step-by-step-guide/
Make-or-Buy Decision. (2013). Retrieved from https://accountingexplained.com/managerial/relevant-costing/make-or-buy-decision
Schwarting, D., & Weissbarth, R. (2011). Make or buy: Three pillars of sound decision making. Retrieved from https://www.strategyand.pwc.com/media/file/Strategyand_Make-or-buy-sound-decision-making.pdf
