Supply Chain Management and Outsourcing

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The aspect of globalization therefore, highly influences various companies, especially the international companies. Apart from globalization, the cost factor and competition in the market are other pressures, which shape the operations of various companies. These among other factors have forced most companies to develop new strategies, which might help them gain competitive value in the market, in order to compete favorably, despite all the pressures in the market (Wisma, 2008). Nonetheless, most of the strategies, which companies have adopted mainly include those that will help to differentiate the companies. These include research and development, demand and customer management, and regulatory compliance, among others (Sople, 2009). In addition, in order to compete healthily in the market, companies today have invested in their supply chain management and functions, such as manufacturing, distribution, and logistics. One of the most important strategy, which companies adopt today with regard to supply chain management is outsourcing in the business supply chain. This is instrumental in the business, since it helps enables for goods, information, and services in the company to be distributed in an effective manner, including all processes from raw materials, manufacture, all the way to customer delivery (Sople, 2009). This paper will therefore, focus on supply chain management and outsourcing in business supply chain as a function in the overall supply chain management, and why it is important for companies. Outsourcing in business supply chain is an aspect and a function of supply chain management in a company. However, supply chain cannot be regarded as a function of a company, since this is a network, which is made up of different companies. Therefore, supply chain management mainly involves how each company implements the different cross-functional relationships between its major customers and suppliers, within that network. Nonetheless, for supply chain management to be effective in a company, the company must involve each of its function in supply chain management. It is important to note that supply chain management is still a new business model, which companies started to adopt because of various pressure factors in the market (The Times of India, 2011). Today, it is demanded that companies should uphold both social and environmental responsibility. In addition, companies must adequately respond to the ever dynamic needs and demands of its customers in the market in order to remain competitive. Companies too are faced with the pressure of ensuring sufficient access to resources in order to sustain their business operations. It is also crucial for a company to maintain its profitability and grow its revenue and market share. All these factors influence and determine the success of any company in the market. Nonetheless, for a company to be successful in all these factors, it must be able to manage the different relationships, which emerge because of these functions. Therefore, a company should integrate these various business networks and relationships in a manner that will be ensure positive outcomes for the company. This management of the relationships between these different networks in a company, is what is entails the process of supply chain management (Sople, 2009). Different companies today practice supply chain management. However, not all of them are successful in this process. Those companies, whose management does not recognize the importance of integrating business’ network of business relationships in a