-75%
Solution
From a general context, PS&M teams play a critical for organisations success. According to Modgil et al. (2022), in organisations lacking effective procurement strategies, organisations end up struggling in maintaining competitive edge/advantage and grapple with operational inefficiencies.
3.1 Supply chain management influence and contribution to business strategy
From an individual context, working in PS&M in Ericsson organisation the executed functions are directly correlated with contribution to business strategy. This is in regard to achievement of immense benefits for an increased organisation and financial performance with tangible gains in regard to cost management and sales growth. In order to understand this influence, the Ansoff Matrix is applicable as illustrated in figure 7;
Figure 7:Ansoff Matrix factors
For the different growth options, their relevance is evidenced by CIPS (2019) which identify the procurement and supply management as pursuing a broad spectrum of roles including multiple aspects of the function starting from vendors or suppliers selection to negotiation of contracts and procurement of goods and service. These roles have significant implication on business and their goals.
Market penetration strategy- Considering Ericsson case organisation, here, the PS&M ensure that they streamline the entire distribution processes. This is while reducing cost overruns in the supply change for attracting new clients in the organisation. A networked supply chain is introduced by the PS&M which means a direct link of an organisation with information and materials flow in these links (Lan, 2023).
Product development- The PS&M plays a major mandate in ensuring that the process of sourcing, manufacturing, materials handling, packaging, warehousing and distribution (OMOSA, 2022). The outcome of this is increasing the brand loyalty and selling the products to the right customers in their entire supply chain.
Diversification- Being the highest risk strategy, it lead to immense rewards being accrued to an organisation by the PS&M teams. This is through new revenue opportunities developed or lowered through organisation reliance on single product/market sourcing (CIPS, 2019).
Market development– For PS&M, they play a critical role in leveraging on their existing products and services and introducing them in distinct markets. This can either include venturing to a new domestic market (regional expansion) or entering foreign markets (international expansion).
3.2 Leading methodologies for achieving lean and agile supply chains
By embracing a lean supply chain, this means that cost-consciousness and efficiency is prioritised. This is with agile supply chain being substantially adaptable. Hence, as evidenced in Ahmed and Huma (2021), supply chain management prioritise on pursuing costs reduction through the application of tools for leanness (lean management concept) or higher service level through higher flexibility (agile management concept). For success of either developing the lean or agile supply chains, the Generic Strategies by Porter (Firoz Suleman et al., 2019) model is used as shown in figure 8;
Figure 8:Porters Generic Strategy
As illustrated in figure 8, in order to initiate an agile supply chain, the best strategy would entail integrating the different supply and delivery approaches to various supply chain solutions (Ahmed & Huma, 2021). Through this, there is a possibility of developing different differentiated supply chain solutions. Further, for lean supply chains, the PS&M is able to pursue cost leadership which enhance expenses cutting in different organisation segments including production, supply chain and overhead costs. This is achieved by PS&M using value stream map which enhance identification of value added and non-value added activities. The outcome of this would enabling an organisation in providing products and services in less costs compared to rivals while at the same time managing profit margins.
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