Distribution Systems Essay Example | Topics and Well Written Essays - 750 words

Distribution Systems - Essay Example The success of an organization is highly correlated with the management expertise and ability to streamline and integrate all other parts and players of the organization into a comprehensive enterprise supply chain system in order to create a true corporate enterprise. The main goal of the Supply Chain Management is actually to maximize the synergies and add the highest possible value to the core operation of the businesses. This is achieved by the integration of all parts of the chain so as to provide efficient service to the final customer and/or consumer more effectively. Supply chain not only involves reduction in costs but also creates a value chain where at each level; certain value is added to the product without over-lapping the operations of other phases of production. The cost reduction may be achieved via less frequent transactions, reduced unpredictability of demand and lesser transportation costs and/or inventory holding. Value may be added in the course of customized services, by developing distinctive competencies throughout the whole chain and by helping both the consumers and suppli ­ers, to make save/earn more in terms of economic benefits and revenue by better understanding the business. Usually, the supply chain, despite being highly critical is not the core function of the organizations. Many organizations understand and likewise either outsource or separate the supply chain functions from the corporate head quarters. This gives birth to the concept of second tier and third tier supply chain management. Many companies are actively investing to secure acres of land for the purpose of building their logistics and supply chain network to serve the different regions of the country. The second tier relocation is targeted mainly in the less developed, cheaper areas but with a reliable road network (Sowinski,2007). Companies are making strategies to