Business Improvement - On the Responsiveness of Supply Chains - Assignment Example

Business Improvement Questions Answer A commercial activity which is undertaken by an individual or an enterprise, to earn profits or as a means oflivelihood is known as a business. Dey and Ogunlana (2004) underscore the fact that every human endeavor involves risk and the success or failure of any venture taken up by the individuals, depends on how we deal with it. In good old days an individual business used to cater to the needs of nearby localities, towns and cities, because not many well established brands were available in the market. The limited number of brands in the market used to be available at a premium. But, the era of globalisation and liberalization has resulted in fierce competition amongst the multinational companies has come to the rescue of the consumer. Now, MNCs emphasis is less on profit margins and more on sustainable growth. This resulted in making the independent sustainability of individual businesses little difficult. The era of network competition (Dechow, 2003) resulted into MNCs looking for local support, while individual businesses found an opportunity to sustain their business venture by working as supply chains for Multi-national enterprises. With growing emphasis on innovative marketing techniques in the network economy, competing as stand-alone entities becomes much more difficult for individual businesses. Functioning as supply chains to one or more MNEs, helps in better profit margins and long term survival of an individual business. This has led to a situation where the competition is not amongst individual firms, but as supply chains to larger business entities (Hammer, 2001 qtd by Dechow). In the IT era supply chain has acquired newer dimensions. Outsourcing is the new buzzword in the industry. While the debate is still on about the benefits or losses of outsourcing, the industry seems to have taken it in a big way. More and more banks, IT companies, PSUs and a range of industrial units from places like UK, USA, Germany etc are flocking towards Asian region with their requirement for software development, IT enabled services and call centre workforce. The outsourcing firms do not have a formidable identity of their own, but they are very crucial for an organization like, HSBC, Microsoft, IBM, Standard Chartered etc. While the MNEs are able to save millions of dollars through this arrangement, the supply chain companies too are earning good revenues within their own areas of operations. Such an arrangement proves to be a sound business strategy for long term survival. Quoting Thomas Koulopoulos, Burnell (2007) says; "Companies whose instincts have gone stale are like patients with local anesthesia let free to wander the world. They are rational, coherent and aware of their predicament, yet numb. They can no longer sense the world around them." In order to leverage the economies of scale and remain competitive, companies are relying on the increasing role of supply chains. Therefore, companies are now supposed to adapt their supply chains efficiently in order to remain agile and competitive (Tolone, 2000). This helps in building strong relationships with customers and suppliers. With the growing trend towards leaner and meaner organisations, companies are now more focused towards their core competencies, while preferring to outsource all other activities. Swaminathan (2003) underlines the need for strategic management of the supply chain partners with increasing role of core competencies, elimination of geographical boundaries with ICT revolution and volatile nature of economies. For creating strategic advantages in the competitive landscape coordinated supply chains have now become an integral part of the business strategy. Companies are now coming out with solutions for managing the supply chain, for example IBM provides SCM solutions for its partners so that they can gain a window into inventory. This allows promoting, cross-selling, up-selling, replenishing, and closing out, the inventories on short notices1. Such solutions also help in sharp forecasting, standard sourcing, integrated planning, production and delivery. The supply chain practice can be studied by knowing (Storey et al, 2006) as to; Who's managing the supply chain Which types of activities are being managed What are the key enablers and inhibitors to the process Which are the strategic external factors driving the supply chain Answer-2 Management of an organisation is an evolutionary process requiring continuous improvements and changes. From the point of view of an organisation, a change could be a new job description, a new post, a new place of posting etc. while from the organisational perspective the change could be in the form of changes in marketing strategy, changes in HR policies, decisions of mergers and acquisitions, changes in investor profile etc. Though it is a human tendency that changes are always resisted, the management has to do the implementation in such a manner that the organisation and its overall interests feel least changes. Organisations and their different departments carry out the changes depending upon their stated aims and objectives. For example, in a vehicle assembly plant, the overall management perspective may be of a stable system of production based on just-in-time systems and robot manufacture. To the operational management, however, the manufacturing processes necessary to support this overall approach often seem turbulent in the extreme (Cao et al, 2000). The changes might be an outcome of changes in technology, economic forces, socio-political forces etc. To facilitate the effective implementation of the changes there are certain facilitator or change enablers which assist in smooth implementation of change. There are also some inhibiting factors affecting the implementation of change. Figure-1 depicts a general model of organisational change. There are therefore a number of different ways in which an organisational change can be categorized. Some such categories are (Cao et al, 2000); Strategic and non-strategic change Incremental and radical change Incremental change and quantum'' change Changes of identity, co-ordination and control Human-centred classification of change at individual, group, inter-group or organisation level Planned change and emergent change Change in terms of scale (from incremental to radical) and centrality (from peripheral to core) to the primary task of the organisation Ultimately it is the people who the ones either embracing the change or resisting it. If the organisational change is to be implemented, then the people who work in it must be readied for such a transformation (Smith, 2005). To prepare the organisation and its people for change, the three main models of change are (CIPD, 2007); Lewin's Model, Beer's Model and Shaw's Model. The two contrasting one's are; Lewin's model: This model considers the change process as a move from one static state to another state with the help of intermediate activity/ activities. Lewin specifically considered a three-stage process of managing change: unfreezing, changing and re-freezing. The first stage creates suitable conditions for change. During the second stage required resources are mobilized. The new ways i.e. the changes are then incorporated in the functioning of the organisation using the resources. Beer's model: While the Lewin's method considered implementation of change as a process easy enough to be implemented in three compartmentalized steps, but Beer's model considers that change is more complex and therefore requires a more complex set of responses for its effective and efficient implementation. This model advocated a six-step process to achieve effective change, which include; Mobilising commitment to change through joint diagnosis. Developing a shared vision of how to organise for the change. Fostering consensus, competence and commitment to this shared vision. Spreading the word about the change. Institutionalizing the change through formal policies. Monitoring and adjusting the process of change implementation as and when required. Answer-3 ISO Model: ISO (International Organization for Standardization) is the world's largest developer of standards. ISO is basically a network of the national standards institutes of around 160 countries, with its Central Secretariat in Geneva, Switzerland, which coordinates the entire system. All strategic decisions regarding granting of certification etc. are referred to the ISO members, who meet for an annual General Assembly. Technical committees within the ISO develop the standards these committees comprise experts from industrial, technical and business sectors. Strength of ISO is that it represents around 160 countries, which appears to be a global representation. The ISO 9000 and ISO 14000 families are amongst ISO's most widely known standards. Both these standards are implemented by some 887 770 organizations in 161 countries. The ISO 9000 family standardizes "quality management". To achieve an ISO 9000 certification, an organisation will have to (ISO, 2007): Fulfil the customer's quality requirements Adhere to the applicable regulatory requirements, with an aim to enhance customer satisfaction Achieve continual improvement of its performance in pursuit of these objectives. The The ISO 14000 family on the other hand is primarily concerned with "environmental management". For such a certification, the organisation will have to; Minimize harmful effects on the environment caused by its activities, and Achieve continual improvement of its environmental performance. The ISO standards therefore appear quite comprehensive with good representation from different parts of the world. But its weaker point is, it has become more of a government organisation. i. EFQM Model: The European Model of Excellence, better known by the abbreviation EFQM (European Foundation of Quality Management) corresponding to the foundation which developed it, was born in 1991 (EFQM, 2007). It is a practical tool which helps organisations in determining at what point they find themselves on their way towards achieving the quality targets. There are nine criteria, divided into two groups, which are fundamental to determining the applicability of EFQM model. There are five Enablers and four Results. An organisation can do a self assessment of its organisation based on these nine criteria. The 'Enabler' criteria analyses what an organisation is doing, how it carries out its key activities etc. The 'results' criteria analyses what are the results achieved after the operations. Enablers Results Innovation and Learning Figure-2: EFQM Model Five enablers for the model are; i. Leadership, ii. People management iii. Policy & Strategy, iv. Partnership and resources, v. Processes While the 'Results' criteria include; ii. People results iii. Customer results iv. Society results v. Key performance results EFQM model is more of an industry representation. This way it appears to be more of a professional body as compared to ISO. But, EFQM is so far limited mainly to some areas in the European region. It doesn't appear to be representing the world community at large. In the 21st century, it is true that we need quality standards with professional approach, but the standards must also be representing the global community instead of one particular region. Therefore, EFQM will have to really work hard to become widely accepted all around the globe, and as for now ISO model appears to be the only suitable model for the coming years. References: 1. Burnell, Creg (2007). The Outsourcing Debate: Are Our Fears Misplaced Enterprise Networks and Servers, March 2007 Issue. Available online at http://www.enterprisenetworksandservers.com/monthly/art.php3043 (Accessed Apr 5, 2007) 2. Cao, Guangming; Clarke Steve; and Lehaney, Brian (2000). 'A systemic view of organisational change and TQM'. The TQM Magazine Volume 12. Number 3, 2000. pp. 186-193. 3. CIPD (2007). Change Management. Available online at http://www.cipd.co.uk/subjects/corpstrtgy/changemmt/chngmgmt.htm (Accessed Apr 6, 2007) 4. Dechow, Niels (2003). "On the Responsiveness of Supply Chains," Sprouts: Working Papers on Information Environments, Systems and Organizations, Volume 3, Issue 4 (Fall), pp 211-232. available on http://sprouts.case.edu/2003/030411.pdf (Apr 5, 2007) 5. Dey, P.K., Ogunlana, S.O. (2004), "Selection and application of risk management tools and techniques for build-operate-transfer projects", Industrial Management & Data Systems, Vol. 104 No.4, pp.334-46. 6. EFQM (2007). Achieve your mission. Available online at http://www.efqm.org/ (Accessed Apr 6, 2007) 7. IBM (2007). SCM: Supply chain management. Available online at http://www-03.ibm.com/solutions/businesssolutions/doc/jsp/indseg/scm/index.jsp (Accessed, Apr 5, 2007) 8. ISO (2007). International Organisation for Standards. Available online at http://www.iso.org/ (Accessed Apr 6, 2007) 9. John Storey and Caroline Emberson (2006). Supply chain management: theory, practice and future challenges International Journal of Operations & Production Management Vol. 26 No. 7, 2006 10. McGuire, David; Kate, Hutchings (2006). A Machiavellian analysis of organisational change. Journal of Organizational Change Management Vol. 19 No. 2, 2006, pp. 192-209. 11. Smith, Ian (2005). 'Achieving readiness for organisational change'. Library Management Vol. 26 No. 6/7, 2005 pp. 408-412. 12. Swaminathan, J.M. (2003), "SARS exposes risks of global supply chains", The Journal of Commerce, June 9-15. 13. Tolone, W.J. (2000), "Virtual situation rooms: connecting people across enterprises for supply-chain agility", Computer Aided Design, Vol. 32 No.2, pp.109-17. Read More