Supply Chain Effectiveness and Efficiency – Case of Chinese Onyx Industry

Abstract

Supply chain management of an organization is a major determinant of the success of organizational success. If the supply chain becomes lean, then members of the supply chain will get benefits. Organizations should strive to improve the competitiveness of its supply chain management practices so that all members of the supply chain can obtain benefits from such competitiveness. Onyx industry of China is an important sector of China as lots of people are engaged in this area. The sector has international roots as raw materials are obtained from Pakistan whereas finished products are sold in different Asian and European countries. There are some factors, which may enhance the competitiveness of supply chain of Onyx industry. These factors include transportation-in and transportation-out that has to be incurred by the members of supply chain. In the case of Onyx industry, transportation charges (in and out) are leading to loss of competitiveness of supply chain. Further to this, the technical capability of all the members of the supply chain is also important as because of the high level of technical capability, manufacturers can produce goods in efficient ways, which adds to the effectiveness of supply chain. In the case of onyx extraction, technical capabilities of onyx extractors of Pakistan were not high which lead to loss of competitiveness. However, Chinese manufacturers obtained the better quality of onyx raw material from Pakistan. Likewise, extraction companies of Pakistan are not earning cost-efficiency which lead to loss of competitiveness. Further to this, political and militant activities in Pakistan had also resulted in delays in delivery as lead time had increased. The political and legal factors of Pakistan have caused problems for supply chain competitiveness of onyx industry of China. There are different ways through which inter-government relations are harnessing supply chain competitiveness, and there are other areas in which such ties between the two parties can benefit them. Because of good relations between China and Pakistan, Onyx manufacturers of China have favored access to onyx resources of Pakistan. In the absence of this, onyx resources can be sold to India. Likewise, Karakoram highway, which was developed by China, is also supporting transportation of onyx raw materials to China. Government can take different steps in helping businesses in increasing their supply chain competitiveness.