Unpredictable and volatile markets are gradually becoming the norm. Uncertainty in markets is expected to rise due to shortened life cycles and forces in global competition. The logistics sector is facing a lack of sustainability because of persistent and slow-changing risks. They are forcing companies to scrutinize their structures and management of supply chain.
Time has become an important factor for competitiveness. The ability to meet customer demands within shorter turnarounds is vital. At the same time, businesses should ensure synchronized supply.
Need for sustainable competitive advantage (SCA)
To meet customer demands with maximum precision in a volatile market, businesses need to identify the best kind of competitive advantage, one which is sustainable. Long years of research, acknowledged skills, and domain-specific knowledge matter the most to achieving SCA. Businesses require effectiveness in manufacturing, price & quality leadership, management of quality parameters, and competent storage and transporting abilities. Some supply chain experts feel that focusing on these parameters, separately, will not bring long-lasting SCA. Companies agree that optimizing more features with a broader approach will guarantee competitive advantage.
Supply chain management (SCM) – the best tool
Developing competitive advantage leads to making a company stand out in its market. The best companies can do is implement an efficient SCM technology. Of course, there are factors like price, availability, and reliability that matter to companies before they make plans to achieve high SCAs. These factors are the main focus areas for any functional model in supply chain planning and companies have to depend on SCM methodologies to achieve SCA.
From the late 1990s, global competition has been on a steep rise. It is becoming increasingly tough to deliver services and products to customers at the best prices. Companies have found supply chain advancements of great help to solve this challenge. Most businesses rely on modern SCM techniques to achieve SCA. Researchers advocate that new SCM technology has a guaranteed effect on organizational efficiency. It opens the scope to better revenues and bigger markets.
Competitive advantage gained through supply chain planning
How to cater to customer interests or requirements through products and services, or both, in a competitive manner? There may be concerns in decision-making: which production system the supplier will use, places to look for facilities, and which specialized distribution systems to use. The entire decision has to consider the organization’s overall objectives, especially when it comes to reducing costs to a minimum. Organizations need to establish strategies in supply chain planning because of the common changes in global markets, competition, and predominant practices like outsourcing. These strategies are linked to customers and value propositions appropriately.
The relative position and market share of an organization in a particular sector is identified by its preference for competitive scope and advantage. Key competitive strategies are extremely vital, as they identify the broadest and simplest standards of an organization’s position. To achieve competitive advantage, businesses need to decide about scope and type of the competition.
Businesses can establish competitive advantage by leveraging cost leadership. It can be achieved by comparing products and services with those of the competitors and taking an advantageous position. Businesses can also provide outstanding delivery of services while keeping the same price as that of the competitors. This can make businesses concentrate on work and gain better market position in spite of narrow competitive advantage.