Supply chain management entails all the activities an organization incorporates that allow the flow of its products from sourcing raw materials to delivering finished goods at the point of purchase. Leading organizations and entities, such as automotive, food and beverage, and computer hardware, exercise supply chain management with an intention of delivering goods that consumers need at a price supported by the market. Generally, business operations from manufacturers, wholesalers, retailers and other agents to consumer use supply chain management ideologies to design, gather and path products from the creation period to the end of the supply chain. On the other hand, market growth refers to the increase in the demand for a particular product or service in a given time. Nonetheless, market growth can be slowed down if consumers do not conform to the high demand of goods or products. For example, a new automobile product can only be marketable to a given number of consumers; however, as the price of the technology reduces, its value in everyday life upsurges because more consumers make the demand of the product to increase. Supply chain management logistics require changes in cases where market growth is experienced. The changes may affect the possibility of the supply logistics operations to meet the needs of the market sufficiently and hence calling for adjustments, which may include product modifications, facility changes, changes in transportation approaches, routes used and personnel related issues. Each of these will lead to improved logistics that result in high efficiency in meeting customers’ needs.
Product: Cost, Weight, Volume
Market growth invokes changes in costs, weight, and volume of products handled; these affect the supply logistics required in dealing with the product. An analysis of this reveals the necessary changes that may improve product management. The cost, weight, and volume of products feature as product characteristics that determine the cost of the logistics involved hence the efficiency of the process (Seuring & Goldbach, 2013). The costs referred to include the inventory and transportation expenses. Volume and weight are the determinants of the transportation costs. This occurs because market growth enhances a tremendous development potential in wider markets both locally and internationally thereby intensifying competition in the local markets. Competition triggers small and medium-sized organizations to elevate their operations or even consider growing globally. Furthermore, an increased market growth is also catalyzed by an increase in both local and foreign demand. This process obliges the development of a more expansive network of manufacturing bases and markets in expanding the production volume of the product thereby enhancing the cost and weight. When there is a market growth that becomes global, the manufacturing planning role of the supply chain manager becomes more demanding since there is a need for utilization of more resources in firms.
Additionally, because of increased market growth, organizations need to transform their product life-cycle theory in their supply chains. The product markets, especially those relating in the technological rigorous sector, are rapidly transforming as a result of market growth. This implies that product-cycles are dwindling since consumers demand new products at a faster rate. Moreover, the growth and development of communication and transportation technology in the market allows customers in the growing markets across the globe to access the newest existing products and technologies promptly. Therefore, producers in the supply chain that are eager to enjoy the benefits of market growth in global demand need to increase the volume of new products concurrently in all major markets to meet the needs of customers at an effective price.
Market growth also influences the supply chain through the need to integrate a new product design besides the development of connected manufacturing processes, which are key elements in giving value to the production volume. Consequently, organizations are required to uphold their production facilities, preliminary production plants, and manufacturing resources besides Research and Development (R & D) facilities across the globe in the supply chain management. For example, as a result of market growth, Apple Computer organization established an international manufacturing and production structure with facilities in nations like California, Ireland, and Singapore. Consequently, this network enhances the organization supply chain to introduce new products concurrently in the American, European, and Asian markets as a result of market growth. Moreover, many organizations also use the element of market growth as a learning foundation for apply the expertise in other manufacturing facilities across other markets in the supply chain.
Vehicles: Operating Cost, Speed, Carries Volume
The vehicle management also needs to undergo improvements (Ailawadi & Singh, 2011). The changes in market growth also result in an increase in costs for operating vehicles, the speed needed in delivery and the volumes to transfer. The operating cost increases considering the growth in the number of trips each vehicle serves in a day and the personnel needed in ensuring quality service delivery and time management. Generally, the transport system is among the significant economic activities in the elements of business, supply chain systems. About a third or two thirds of all the expenses of an organization’s supply chain are incurred on transportation. Moreover, transportation systems in the supply chain make goods and products transferrable hence timely and efficiency in enhancing value-added to the products. Transport heavily affects the supply chain activities thereby highly influencing the production and sale. Therefore, this could can be regarded as a control of the objective market. The worth of transportation fluctuates according to different industries in the supply chain, for instance, small volume products, low weight and high value, which affect transportation differently as compared to heavy and low-valued products.
In a growing market, transportation plays a significant connective role, which results in transformation of resources into expedient goods to the final ultimate consumer. Therefore, having an effective operation cost, speedy and effective carrying capacity of transportation is key. Market growth enhances competitive primacies in production industries, which includes product and process conformism quality, delivery consistency and speed. This makes organizations to place the cost factors and effectiveness of transport systems that drive their supply chain operations strategies in order. For instance, the Total Quality Management (TQM) concept in business transformed the emphases of quality costs instead of only labor costs, which incorporates the elements of transportation. Organizations, therefore, have realized that activities like effective transportation, particularly in the growing markets, directly influence the value of products. Therefore, market growth necessitates a successful planning of the transportation functions and sub-functions that enhance effective movement of products in the market to minimize cost and maximize service to the customers, which entails supply chain.
Routes: Destination, distance, product delivery
The routes through which delivery occurs may also increase, especially in cases of market expansion (Ashish, 2016). The delivery may move from within local boundaries to serve a region. The regional expansion means that the supply logistics needs to cover a wider area compared to the initial. Therefore, these factors increase delivery destinations and the distance traveled that in turn affect product delivery.
Market growth expands the geographical boundaries of products in the supply chain. In many instances, many organizations interpret their network of global facilities as a single entity. Market growth involves aspects, such as executing global sourcing, creating production sites in different regions globally, and selling products in numerous markets. All these mean that there needs to be effective operations and a supply chain approach aimed at having a more expansive outlook. One of the ways in which the expansive markets have been triggered by the growth of markets is through the contemporary regional economic integration, for instance, the European Union.
The expansion of markets by organizations necessitates them to re-consider their physical flow structures of products in the supply chain. One of the most common ways the organizations have addressed this concept is by establishing sales subsidiaries in different markets and creating different markets supply chain support offices as well as production systems that are more effective. As a result of the globalization and marketing growth, most organizations’ production and marketing have become universal. The geographical incorporation becomes effective because of the exceptional global routes and destinations in the supply chain. For instance, the express transport delivery services, such as Federal Express, DHL, and UPS among others alongside their routes and delivery have allowed organizations to send their products to different consumers across the globe within a shorter time.
Since the modern markets and businesses are growing at a fast rate globally, the supply chain and operations are required to coordinate the physical flows of the products relating to manufacturing distribution effectively besides other functions, such as research and marketing. Effective management of the flow of goods and services in the growing markets obliges the development of new systems to ensure that the products are delivered to the final consumers in an effective and timely manner. This is attained through the management teams’ effort in stimulating the flows necessary in the procurement and manufacturing phases with regards to the components required in the supply chain. For instance, because of market growth, the supply chain department can make efforts to impact the delivery and routes system through making recommendations that enhance effective flow of products to meet the market demand.
Facility (Benny Factory): Operational Cost, Storage Capacity, Production, and Demand
Market growth signifies an increase in the demand of a product needed in the market; this in turn indicates a growth in the quantity of goods managed by any supply logistics company handling the service. The increase in product volume in turn results in a rise in the operational costs, needed storage capacity, and production needs (Coyle et al. 2012). The development of a storage facility also involves capacity planning to ensure that the space proves ample for all the products availed.
Market growth also opens organizations in expanded markets that create major challenges for the operations managers, operation costs, storage capacity for products, production of goods and meeting the increased demand. This necessitates the organizations to establish favorable economic operational facility that can be located in foreign nations. For instance, if a local currency were frequently undervalued in the event of market growth besides other poor facilities, it would be advantageous for the organization to change most of its sourcing to other global vendors. This enables the organizations to source from effective suppliers in other nations at an effective cost to add on the creation of a favorable environment and relationship that enhance their future strategies in the ever-growing market.
An increase in market growth results in intensification of the technology needed for planning, monitoring, and execution of the logistics of a client (ZongWei, 2012). The growth of the market also results in the development of the human resource teams, the routes taken, the products’ capacity, and needs, hence calling for highly efficient technology in handling them.
In the recent past, there has been a weird trend apart from globalization that was characterized by a limited number of producers, which was a result of products’ diversity as well as uniformity across different national markets. The concept of product diversity has continued to expand because of the market growth, thereby resulting in products becoming more complex and differentiated. This process shortens their life cycles. For example, the quantity of the U.S. market for high-technology products supplied for imports from external-based organizations increased extensively in the last decade. Furthermore, the origins of these imports also stretched further than Europe to nations like Japan and freshly industrialized nations like Hong Kong, Singapore, Taiwan, and South Korea
Therefore, as a result of market growth, there has been a great flow of technological knowledge as well as establishment of international low-cost manufacturing sites. In a rejoinder to this diffusion of technological competence, global organizations need to enhance their ability to tap into numerous sources of technology situated in various nations in their supply chains. This implies that organizational supply chains also need to absorb and commercialize new technologies that in most cases are designed in the external growing markets thereby incapacitating the disparaging and unescapable element of not-invented-here perception among markets and the consequential indolence. In most cases, there have been cases of technology sharing and inter-organization collaborations among organizations’ supply chains as a result of market growth, which needs to be enhanced. For example, the market growth initiated the commonly joint ventures in the car manufacturing industry between the United States and Japanese organizations: GM-Toyota, Chrysler-Mitsubishi, and Ford-Mazda. This is because the United States organizations needed to get first-hand acquaintance of the Japanese manufacturing approaches aimed at fast-tracking product growth and development cycles to meet the expanded market. On the other hand, the Japanese manufacturers’ objective was to find ways of penetrating the United States trade barricades and gain entry into the enormous American auto- grown market. Furthermore, market growth also enhances competitive priorities among products where markets shift more towards product customization and dissolute new product growth and development. This makes the organization to realize the significance of co-location of production and product design facilities across borders thus widening the supply chains. Under some product specifications, for instance, Application Specific Integrated Circuits (ASICs), this process involved the greatest inspiration for creating design facilities in the foreign nations. Many other organizations, for instance, pharmaceuticals and consumer electronics have taken this step in their supply chain approach because of market growth.
Human Resource: Number of employees, Skills, and Knowledge needed
An increase in market growth indicates that the supply logistics management also needs to advance its human resource aspects to enhance the number of employees, the skills needed and its knowledge of the routes, the needs of the supply chain, and the necessary information technology to handle the delivery.
Generally, Human Resource Management (HRM) entails the systems formulated in the management of employees within an organization. The human resources responsibilities are primarily categorized into three main managerial facets, which are staffing, employee compensation, and designing work. Fundamentally, the objective of HRM is to capitalize on the productivity or organizations by enhancing the efficiency of its employees. Despite the increasing transformation of business across the world, the main role of HRM is unlikely to change. According to Gubman, the main mission of human resources is to acquire, develop, and retain talent as well as aligning employees within the organization.
It is apparent that a several business consultants have acknowledged the fact that human resources management is steered by several superseding ideologies. Nonetheless, the overriding norm in human resources is the fact that it is the most resource in any organization. This implies that the organizations’ success cannot be effectively carried out without managing this resource well.
Therefore, in market growth, organizations need to ensure that there are effective primary responsibilities linked with human resource management, for instance, job analysis, staffing, organization, and utilization of work force, and development of employees among others steps. In the job analysis, organizations need to analyze the jobs in the supply chains to meet the growing demand of the expanded market. This involves determining organizations’ employment positions in the supply chain. For instance, market growth determines the skills and experiences that are required by the firm to perform effectively in a given position through the industry trends and the expectancy of future employment.
In market growth, the organizations need to ensure an effective utilization and maintenance of employees, which falls under human resources. This entails designing organizational context that enhances maximum use of organizations’ human resources and creating systems of communication that aid the organizations to operate under a unified manner in the supply chain to meet the demand of market growth. Other mechanisms in ensuring this facet is attained are through upholding the responsibilities of human resources in firms, for instance, safety, health, and employee management relations. Despite the fact that human resource upkeep activities associated with safety and health are usually entailed in the labor laws that protect workforces from perils in the workplace, organizations need to go beyond these requirements to make the personnel feel they are part of the organization. This action motivates employees to perform effectively to meet the requirements of market growth.
Another concept that needs to be enhanced in an organization as a result of market growth entails employee development and training, which is also a vigorous function of HR personnel. This obliges the human resources with the responsibility of researching a firm’s training needs, commencing, and assessing employee growth programs intended to meet the needs. These training programs in organizations’ supply chain as a result of market growth can take different forms ranging from placement programs that are aimed at familiarizing new employees to the organization to aspiring training programs planned to drill the existing personnel to meet the new challenges brought about by market growth in the supply chain. In the process of training employees as a result of market growth, human resource professionals need to come up with unvarying assessment standards besides developing appraisal systems to make a follow up on the efficiency of performance assessments in organizations. Additionally, the appraisal process needs also to be linked with recompense and enticement strategies, which guarantee the motivation of personnel in meeting the requirements of market growth.
The current business operation is taking a global perspective. This global environment has expanded the demand and supply of products thus ensuing market growth for organizations irrespective of location or primary market base of the firms. This obliges the organizations to consider the rest of the world in their competitive strategy scrutiny in the provision of goods and services in the supply chains. Therefore, to meet the growing challenges and requirements of market growth, organizations cannot segregate themselves or overlook the discussed elements or external factors like technology, facility, and cost of operation in their supply chain. The market growth implies that organizations are opening their supply chains in a more expansive market globally. For instance, market growth indicates that an organization can develop a product in the United Kingdom, produce it in India, and sell it in Asia. Therefore, market growth necessitates that organizations have to transform their traditional ways of managing their operations and supply chain activities. Furthermore, transformations in trade, the spread and reconstruction of transport infrastructures and strengthened competition have also enhanced the significance of management flow to innovative levels. Currently, the opening of the world economy, which has become borderless and incorporated, enhances market growth. Global market forces, comprehensive technological forces, cost factors and other elements in business strategies, compel these facets. Market growth as a result of incorporated world economy and international competitive is transforming the way organizations’ supply chains are operated from the traditional norm. Therefore, market growth has had a great impact on the supply, chain management logistics.
Ailawadi, S. C., & Singh, P. P. (2011). Logistics Management. New Delhi: PHI Learning Pvt Ltd.
Ashish, D. (2016). Innovative Solutions for Implementing Global Supply Chains in Emerging Markets. Hershey: IGI Global.
Coyle, J. J., Langley, J., Novack, R. A., & Gibson, B. (2012). Supply Chain Management: A Logistics Perspective. Boston: Cengage Learning.
Seuring, S. & Goldbach, M. (2013). Cost Management in Supply Chain. Springer Science & Business Media.
ZongWei, L. (2012). Innovations in Logistics and Supply Chain Management Technologies for Dynamic Economies. Hershey: IGI Global.