Supply Chain Competitive Advantage vs Comparative Strategy

Supply Chain Competitive Advantage

Supply chain competitive advantage derives from the concept of competitiveness. Any competitive advantage should mirror within the short-term as companies improve their benefits.

Supply Chain Strategy

Experts highlight that many companies have not understood the importance from the environment encompassing their activities. As a result, the main reason for today’s industry is to determine the required criteria to enhance their operations and to achieve particularly defined levels of competition.

Comparative advantage

The comparative advantage refers not only to the total productivity achieved, but also to the corresponding productivity gains and alternative costs. Based on the Global Competitiveness Report, countries contend mainly in basic infrastructure requirements, functional settings, staff health and financial stability.

In contrast to the aggressive advantage, the comparison advantage includes the usage of nearby resources to create goods and to achieve global trade where countries can contend in minimal production costs.

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On another hand, a aggressive advantage is related having a well-defined functional structure that enables economic growth in the medium and lengthy term.

That is to say, a aggressive advantage implies a far better business prediction with higher economic results.

Competitiveness and Supply Chain Management

Today globalization has stimulated a global competitive environment in which competitiveness plays an important role. Consequently, research on competitiveness has increased exponentially and has encouraged the active involvement of companies in competitive performance and training.

As mentioned earlier, competitiveness is influenced by government policy. In this sense, there is a strong relationship between the competitiveness of companies and a supply chain, since it is formed by all those companies that can add value to a product while at the same time managing better national and international competition.

That is why the decisions that each SC member takes are crucial for improving their competitiveness. In this sense, the Committee can be seen as a tool for increasing the competitiveness of companies and survival chances. The success of global CSs starts with their ability to transport raw materials quickly, reliably and cheaply across regions and borders.

In this sense, a CS has the power to improve business performance by developing competitiveness in a step-by-step sequence, with aspects such as quality, reliability, flexibility and cost-efficiency being defined.

Likewise, competitiveness can only be achieved if companies eliminate all the waste that they produce. Waste refers to the range of activities that do not add value to a product. That said, the elimination of waste contributes to creating a sustainable competitive advantage;

At the same time, companies increase business performance and efficiency in their primary activities. Companies generally strive to develop comprehensive strategies for better time management to improve product delivery, flexibility and innovation, at exactly the same time they improve customer service, increase profits and increase competitiveness.

All these aspects are essential for companies that want to survive in a highly competitive business environment. Today, the competitiveness of international companies increasingly depends on their ability to produce and deliver products and services around the world as quickly and efficiently as possible.

That is why the use of the SC as a competitive weapon has become a fundamental element of strategic management processes, because companies no longer compete between them. Instead, the competition is between SCs. The current role of the SC implies that enterprise competitiveness strongly refers to SC competitiveness, because companies achieve their desired economic benefits through successful SC management – first by managing their primary activities as a business and then by their economic goals.

Out of this perspective it is stated that you will find two important competitive objectives that companies want to achieve: to master the ever more dynamic and altering market and also to provide products on time and in an orderly manner by using the very least of the resources.

Competitiveness and Supply Chain Performance

As mentioned earlier, companies usually do not compete between them – SCs compete between them. In addition, globalization requires an improvement in competitive strategies. The prosperity of a company’s business depends on the right balance between human resources, processes and the usage of current technology.

This balance takes many stages into consideration. Firstly, the production phase includes the entire system to create value for a particular product.

Finally, the total amount also includes the technical and knowledge aspects necessary to keep the right flow of information and to support the complexity, dissemination and speed of these information.

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