Supply Chain Management in Telecommunication Industry
Introduction
Supply chain management is the strategy, tactics, and operations used by organizations to coordinate the business functions within the supply chain and ensure the effective and efficient flow of goods and services to customers. The telecommunication industry uses supply chain management as the industry's strategy to achieve qualitative and quantitative benefits. The inevitable changes in the economy such as globalization, increasing competition, and change in customer demand have forced the industry to design the supply chain to ensure that it is managed accordingly. It is important to note that a supply chain is made up of many entities such as manufacturers, distributors, and customers. The entities ensure the production of the right products, quality products, and the production of goods at the right time. Therefore, in supply chain management, there must be planning and control of management activities. Additionally, the parties involved in a supply chain such as manufacturers, inbound logistics, suppliers, warehouses, customers, and more must coordinate to satisfy customer requirements. In general, it is important to note that a variety of initiatives are needed for an effective supply chain. Under the various initiatives, the major role of the telecommunication industry is to focus on all business processes. This will help them eradicate non-value added steps and promote an efficient transformation process. There are many ways a company can use to survive in a competitive environment. In most cases, companies focus on globalization and technological advances. Focusing on the Telecommunication industry, the industry's supply chain setting or supply chain management is considered as significant and therefore, to manage the supply chain, or in other words, to manage the manufacturing, distribution, procurement, and other processes, the industry has realized the value of information systems, distribution network configuration, distribution strategy, investor management, and cash-flow-all aimed at promoting strategic agility.
Today, there are fundamental changes in the telecommunication industry influenced by technological innovation and the increasing competition. To control this inevitable change, telecommunication is focusing on the supply chain since it is the main area in which competition edge can be achieved. The telecommunication industry very well knows that by improving the supply chain or in other words by managing the supply chain effectively, the industry will survive and grow despite the changes in the business environment (Gattorna & Jones, 1998). It is also important to note that in the U.S, the competitive landscape in the telecommunication industry is changing since the telecommunication Act of 1996 allowed the new entrants such as the Bell Atlantic-NYNEX to enter the market and compete with the existing markets. Other countries such as Japan and Europe have shifted to an open market approach so that the telecommunication industry can increase the worldwide telecommunications revenue. Apart from an open market approach, technology has also influenced the growth of the global communications marketplace. Today, customers are enjoying the innovation services such as video conferencing, Internet, video, and more (Gattorna & Jones, 1998). This means that companies should look for new ways or strategies to retain customers or to prevent them from switching to other products. In general, companies need to implement decisive management techniques for them to be able to compete in the business environment. The telecommunication has realized that the only way the companies can reduce the operating expenses, maximize the value of the product, retain customers, and keep the competitive advantage is through supply chain management. It is important to understand that supply chain entails different operations such as procurement of materials, using the materials to create finished goods, and ensuring that customers get the finished good (Gattorna & Jones, 1998). Traditional, the supply chain functions such as planning, manufacturing, and more operated independently, but today integration is encouraged in the telecommunication industry for effective management.
Before understanding how the telecommunication industry manages its supply chain, it is important to note that supply chain management does not only control the movement of goods but it also controls or manages the data concerning the products such as status information, ownership titles and other information. In general, the main function of supply chain management is to reduce inventory, provide real-time data exchange, and meet customer demand, and hence increase revenue (Gattorna & Jones, 1998). Eventually, as a result of inventory management, demand management, and sharing of order data or real-time information, the telecommunication industry enjoys benefits such as competitive advantage, increase visibility, provide quality services to the customers, improve operational efficiency, and becomes reliable and flexible.
Supply chain management
Inventory management
The telecommunications industry manages the inventories or the flow of goods such as raw materials, and finished goods. The purpose of inventory management is to reduce supply chain costs, reduce obsolescence risk, and ensure flexibility. The telecommunications industry manages inventory by tracking both tangible and intangible assists. The industry views data on network plans, customer service records, and other critical details about assets (Tummala & Schoenherr, 2008). After reviewing the details, the management platforms allow the appropriate business unit to provide the clients with results. To ensure effective inventory management, the industry uses the information technology to communicate about the finished goods, it uses the internet to share the information to reduce inventory cost, use Quick Response, among other strategies.
Source of supply management
Factors such as specialization, globalization, and outsourcing have forced the telecommunication industry to manage the sources of supply. Its main goal is to have suppliers who will add value to the product and help the industry identify the new technologies and ideas, and more important to share risks. The industry is also interested in working with suppliers who will help the industry in positing supply activities on the electronic platform (Tummala & Schoenherr, 2008). This will lower procurement costs, reduce unauthorized buying, promote tighter integration, manage the key data, promote better risk management, and enhance control and performance. The telecommunication industry can identify the source of supply through ensuring close collaboration with collaborators, selecting quality suppliers, ensuring trust and mutual well-being with suppliers, sharing information with suppliers, among other strategies.
Demand planning and forecasting
In supply chain management, the telecommunication industry understands the requirements of distribution networks, as well as the requirements of the end-users. The marketing and sales departments in the industry consider the demand of the customers and assist the industry with pricing, and other special deals (Tummala & Schoenherr, 2008). The industry can plan for demand by sharing demand information, improving customer collaboration, improving supplier collaboration, improving collaboration with key trading partners, and identifying factors that influence demand.
Distribution network management
The management of the distribution network is one of the important aspects in the management of supply chain management. The telecommunication industry ensures an effective logistical network to ensure that the finished goods are distributed to the end-users on time. Distribution management not only saves costs but it also creates customers' value and helps the industry gain a competitive advantage, and improves efficiency, effectiveness, and profitability (Bhandari, 2014). On logistic and distribution management, it is important to note that the telecommunication industry can meet its effective management through emerging new technologies. Bhandari (2014) emphasizes the use of technology and says that- it is important to use the right technology that will enable the industry to understand the management policies, organizational infrastructure, and more. For example, the telecommunication industry uses automatic identification technology to track the truck carrying finished goods to the customers.
Product and process flexibility
For the telecommunication industry to compete in the marketplace, it focuses on managing the foreseen and unforeseen changes. Its major goal in managing change is to gain flexibility so that in times of change, the customers can have confidence in the industry. Golovatchev & Budde (2010) assert that the telecommunication industry experience complexity in product, processes and IT. However, the industry employs a holistic approach known as the PLM approach (product lifecycle management). This strategy has enabled the industry to align the products with market demands, the industry can promote collaboration process and come up with efficiency goal, and it also the industry to understand the product's constraints and rules, and the industry can use the best IT components for IT-to-process fit.
Design for quality/ quality management
The telecommunication industry acknowledges that the best weapon for competitive advantage is quality practices. Therefore, it concentrates on a total quality process or quality management principles in terms of quality customer services, focuses on objective analysis, focuses on prevention, focuses on process, and ensures continuous improvement. Fish (2011) assert that since supply chain management is an integrated framework made up of manufacturers, distributors, and retails, quality should come from these parties by ensuring production and instruction of the right product in terms quantity and quality. Manager in the supply chain departments or levels should integrate their goals to achieve quality (Fish, 2011). The telecommunication industry manages the supply chain by also ensuring quality management. Quality management means that the industry ensures a reduction in process variation, effective product designs, and on-time delivery.
Capacity, sales, and production planning
The telecommunication industry manages the production of goods, capacity, and sales. This means that the industry focuses on increasing efficiency by meeting market demand. It tracks the sales performance, determines how much sales are needed, measured predictable performance, and increase visibility (Rokonuzzaman, 2018). Today, companies focus on creating trust and relationships with their customers and this is achieved by making efficient supply-demand decisions. The telecommunication industry collaborates with key partners in the supply chain to learn more about sales and production planning. This promotes stable production, reduces inventory cost, improves higher forecast accuracy, and leads to high-quality products, on-time delivery, and customer satisfaction (Rokonuzzaman, 2018). Understanding the production, capacity and sales also allow the telecommunication industry to deploy strategies on financial planning and marketing-winning strategy.
Another important point to note is that the above supply chain management enables the telecommunications industry to achieve;
Supply chain visibility
This means that through effective management of the supply chain, the industry will avoid the 'bullwhip effect' between supply chain which then leads to excessive inventory investment, lost revenue, ineffective transportations, and other tremendous inefficiencies (Tummala & Schoenherr, 2008). However, through effective management, the industry will understand demand and supply as a result of increased visibility. Effective management will allow suppliers and other dealers to share information about capacity plans.
Collaboration
Effective management of the supply chain helps the industry create effective partnerships with supply chain entities such as joint ventures, merges, and other structures. The partnerships allow the entities to share strategic goals, and more importantly, increase accuracy, and visibility.
Information and Communication Technology (ICT).
Supply chain allows the industry to use ICT effectively as a result of effective flow of information, hence it strengthens coordination, and information flows, operational efficiency, and reduced costs (Tummala & Schoenherr, 2008). By using IT platforms such as radio frequency identification, analytical information technologies, and web-based technologies, the supply chain stakeholders can speed up activities, make quality decisions, deal with changes, and hence achieve competitive advantage.
Process and product innovation
This means that better supply chain management enables the industry to enjoy significant growth as a result of new product introduction. When the supply chain is effective mangers, manufactures can design products using minimal cost while striving to meet the customers' needs and wants.
Global operations
Lastly, better supply chain management allows the industry to develop production lines in other countries where they get support operations, software design, and highly skilled workers. The global operations or globalization has increased telecommunication serve competition which in turn leads to competitive advantage (Tummala & Schoenherr, 2008). Note that without effective management of the supply chain, the industry won't be able to create an international presence. However, effective supply chain has enabled the industry to use telecommunication technologies to gain a competitive advantage as a result of expanding globally.
Conclusion
Supply chain management in the telecommunication industry entails the production and delivery of goods and on-time services to the users. Even though companies consider various factors to achieve a competitive advantage, the telecommunication industry invests heavily on the supply chain in that they good supply management reduces cost and hence increase product availability, increase product customization, affect the customer choice, and information sharing in a positive way. Among the many strategies that the company employs, the telecommunication industry employs a supply chain as a strategy that enables the industry to increase revenue, and more importantly, to gain the capabilities of competition. The telecommunication industry has recognized that the supply chain is the main source of competitive advantage and for this reason, it ensures the industry has a powerful supply chain. By managing distribution networks, distribution strategy, and information systems, the telecommunications industry has enjoyed business growth, market share, and revenues and profits. The industry continues to realize that customer needs value and the only way a company can achieve customer value delivery is through the supply chain system. This is because the supply chain does not only ensure the provision of product and service but it goes further to promote inter-organization collaboration or total integrated marketing. The latter enables the industry to deliver what the customer wants. Generally, the research paper shows that supply chain management has impacted the telecommunication industry positively in terms of a competitive advantage which is brought by supply chain advantage and brand advantage. The supply chain management in the telecommunication industry has introduced an important lesson that it is important for marketing and production units to have a close relationship to improve business performance and enhance customer satisfaction.
References
Bhandari, R. (2014). Impact of technology on logistics and supply chain management. IOSR Journal of
Business and Management, 2, 17.
Golovatchev, J., Budde, O., Hong, C. G., Holmeckis, S., & Brinkmann, F. (2010). Next generation Telco
product lifecycle management. How to overcome complexity in product management by
implementing best-practice PLM. Published by Detecon, Bonn.
Fish, L. A. (2011). Supply chain quality management. Supply chain Management-Pathways for research
and practice, 25-42.
Tummala, V. M., & Schoenherr, T. (2008). Best practices for the implementation of Supply Chain
Management initiatives. Tummala, VM Rao, and Tobias Schoenherr.“Best Practices for the
Implementation of Supply Chain Management Initiatives,” International Journal of
Logistics Systems and Management, 4(4), 391-410.
Rokonuzzaman, M. (2018). The Integration of Extended Supply Chain with Sales and Operation
Planning: A Conceptual Framework. Logistics, 2(2), 8.
Gattorna, J., & Jones, T. (Eds.). (1998). Strategic supply chain alignment: best practice in supply chain
management. Gower Publishing, Ltd..
