How can a company improve its Supply Chain Management to gain low cost competitive advantage?

Essay by osekkahanUniversity, Master'sB, July 2006

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Chapter 1


In recent years supply chain management (SCM) has received a great deal of trade press and academic attention. For many chief executive officers (CEO) the time has come to shift attention to their supply base and embrace the principles of SCM. The resource-based approach to strategic management suggests that competitive advantage can be found in the different resources and capabilities a firm controls. Resources that are valuable, rare, difficult to duplicate, and can be exploited by the organization can produce sustained competitive advantage and earn above average economic performance (Barney, 1997). Many management specialists suggest that companies that learn to develop their organizational supply chain management will have a competitive advantage. This study looks at the success that TOFAS-FIAT Corporation has had in managing supply chain in Turkey.

In a world where products are copied almost as soon as they are introduced into the marketplace, building and sustaining competitive advantage is a major concern for today's CEOs.

In his book, Barney (1997) contends that successfully managing relationships can be a source of resource-based competitive advantage because it is a socially complex fact that is difficult to duplicate through direct duplication or substitution. For this reason, there is a strong connection between how firms manage their people and the economic results achieved. Results from studies of five year survival rates of initial public offerings; studies of profitability and stock price in large samples of companies from multiple industries; and detailed research on automobile, clothing, and other industries shows that substantial gains of almost 40% can be obtained by implementing high performance management practices (Schroeder, R., & Sakakibara, 1996). Another purpose of this paper is to gain insight into supply chain competence and the factors that enhance its development. If members of a supply chain are to succeed jointly...