Supply Chain Management and Out Sourcing

Many organizations have recognized supply chain and out sourcing as their alternative strategies to gain higher competitive advantage. Out sourcing contracts secured by these organizations have been used as an instrument to ensure an organization's needs are satisfactorily met by the service provider. The same thing goes to supply chain management--practiced to satisfy organization's needs.

Comparing between these two, supply chain management however have a bigger impact than the out sourcing and requires a more complex and complicated arrangement before its could be implemented. The main reason is that supply chain management involves both upstream and downstream linkages with different kinds of activities and processes such as planning, control of materials and flow of information within an organization or company and externally between companies. These factors in turn require manager to improve the product and services and to work hand-in-hand with other organizations in order to improve organizational competitiveness.

Today supply chain has been recognized by many to be an important strategic tools for organization's efficiency and competitive advantage. Many organizations are now realize, in order to survive, one must prepare a strong and responsive supply chain management.

Implementing supply chain management is a very difficult job. Organizations are likely to face three challenges such as suitable information is not available by a person who need it, not able to expedite shipments (always delay) due to unavoidable reasons--bad weather, poor communication and simple human error--and to eatablish trust between supply chain members.