Logistics Systems as They Are - Essay Example

LOGISTICS SYSTEMS Name Course Tutor Date PART A Introduction The field of supply chain management is undergoing dynamic transformation following the change in supply and demand of products in the contemporary globalized business world. There are four types of supply chain indicators including supply chain efficiency, supply chain responsiveness, supply chain flexibility, and supply chain quality management (Ambe, 2011). Within the realm of supply chain lies some six essential defining practices. However, the scope of this paper will be continuous improvement and innovation as the essential practices and supply chain efficiency as the indicator. This paper is based on the supply chain management of Murray Goulburn on the aspects aforementioned. The two practices are chosen in this case because they are in tandem with supply chain efficiency (Ambe, 2011). Supply Chain Efficiency In an ideal business environment the measurement of the supply chain efficiency aids an organization or industry to curtail the cause of problems within the logistics system (Mishra, 2012). Supply chain efficiency may be defined as the measure of how resources within the supply chain are exploited (Mishra, 2012). The supply chain efficiency refers to the measure of how good the whole logistic system is in terms of the outputs and the resources that are utilized (Talib, Rahman, & Qureshi, 2011). An efficient supply chain is that which is associated with the lowest possible costs and meets the demand from the customers simultaneously (Ambe, 2011). The supply chain is driven by the manufacturers who control and manage the pace with which the products are processed to meet the rising demands. An efficient supply chain must be able to come up with better ways of satisfying the customer demands reducing operational costs (Talib et al., 2011). Such logistic systems should be able to meet the order requirements of the customers and also ensure that there is assured and stable delivery rate to the consumers (Mishra, 2012). The supply chain of Murray Goulburn (MG) is efficient in that at all levels from producers, suppliers and then consumers there is an added value that reduces cost (Murray Goulburn, 2015). The supply chain of the company is further backed up with innovation that has kept it going ensuring that its 35% share in the supply of milk and assortment of milk products is ensured (Murray Goulburn, 2015). Murray Goulburn has its logistics centers located in West Melbourne and Laverton and four of its offices all over Asia. This ensures that the production of goods and the corresponding supply is maintained. The efficiency can also be measured in internal and external performance of the company. Some measures of external performance include lead-time, customer service, and prices (Ambe, 2011). Internal measurements include the yield and the production lead-time (Ambe, 2011). To ensure that all these are taken care on Murray Goulburn has initiate continuous innovation processes and has continuous improvement on its supply chain in all levels. Innovation and the Supply Chain Efficiency The supply chain has to allow room for innovation so that new technologies are incorporated therein. Innovation engages research and development as its key practice and originates from the suppliers side in the supply chain (Stavrulaki & Davis, 2010). Murray Goulburn has invested heavily in research and design of the products so as to meet the standards that are required. Additionally, the organization also ensures that the farmers who are the suppliers have the latest technologies that ensure thigh productivity (Stavrulaki & Davis, 2010). The technologies used by the farmers ensure that they are able to increase the yield and this take care of the rising demand (Murray Goulburn, 2015). The organization has invested heavily on the latest database system that has is currently being developed in a manner that all the suppliers will be mapped (Murray Goulburn, 2015). The company is also working for an e-procurement system to ensure that all the suppliers have equal chances in supplying the company. Innovation within the supply chain reduces the time taken from production to consumption thus increasing the efficiency of the supply chain (Richey, Adams, & Dalela, 2012). Some of the greatest innovations that ensure efficiency of the supply chain include customer relationship management systems, networks and communication technology (Richey et al., 2012). Murray Gold has ensured that all the farmers (core suppliers) who are spread all over Australia receive information from the management. There is research and development meant to come up with better methods of handling the products from the farms to reduce wastage as well as to meet standards by the health regulators. Murray Goulburn is a leading company in innovation (Murray Goulburn, 2015). The company encourages all the persons affiliated to it to come up with innovative ideas. The company recently introduced the Next Generation package that is meant to support the farmers and suppliers (Murray Goulburn, 2015). The organization has also introduced state-of-the-art technologies that are meant to improve the quality of packaging as well as ensuring that there is sustainability in production. The innovations rolled out in the organization have been in the forefront in ensuring that the supply and demand sides are in an equilibrium state and that the costs of inputs and the resource utilization is at its maximum (Murray Goulburn, 2015). Consequently, the organization’s supply chain has emerged to be the best in terms of its sustainability. Continuous Improvement and Supply Chain Efficiency There is an evident link between continuous improvement and the efficiency of the supply chain (Stavrulaki & Davis, 2010). Continuous improvement is based on the rationale that small changes through time are effective than one enormous change that may be costly and resource consuming thus denting the success of the organization. Organizations are able to assess their supply chain for problems thus rectifying them continuously (Stavrulaki & Davis, 2010). In the realm of logistics, it aids the stakeholders in controlling costs, increases the resource utilization capabilities so that there is satisfaction of the demand (Stavrulaki & Davis, 2010). It also helps in increasing the quality of the products as per the requirements. Additionally, it also helps in facing the competition in the market. All these factors are geared towards the efficiency of the logistics or the supply chain. Murray Goulburn has continuous improvement programs that are meant to assist the farmers and the suppliers to maximize the milk production while minimizing costs. The company has a management system that extends from the production base (farms) through the manufacturing, storage and distribution as well as customer delivery that ensures that the efficiency of the supply chain is maintained and the production capacity assured (Murray Goulburn, 2015). The continuous improvement programs are guided with the BRC global standard so as to meet the quality requirements of the consumers (Murray Goulburn, 2015). The organization also has the Hazard Analysis and Critical Control Point; a system that is based in the farms. This ensures that the farmers are able to make quality improvement on their milk production (Murray Goulburn, 2015). The organization also keeps on evaluating the supply chain in every dimension to ensure that any emerging food safety and quality risks are well catered for in tandem with the quality policy (Murray Goulburn, 2015). The success of the company as the best dairy products supply both in Australia and Asia region denotes that there is efficiency in its supply chain and that it is well maintained through an effective continuous improvement process (Murray Goulburn, 2015). Conclusion Evidence suggest efficiency as is one of the key performance indicators in supply chain or logistics. In this context supply chain efficiency deals with how resources are utilized fully to maximize supply and thus meet the rising consumer demand while at the same time reducing cost. The best way to do this is through inculcating the practices of innovation and continuous improvement as have been discussed in this part of the paper. Innovation looks at ideas and systems that are integrated to ensure smooth operation of the supply chain or logistics. On the other hand continuous improvement ensures that problems are solved in parts other than holistically, thus offsetting the associated high costs and recurrence of such problems in the supply chain. Noteworthy is the fact that both practices engage the stakeholders in the supply chain from producers, suppliers, distributors and ultimately the customers. As can be seen Murray Goulburn is a model company in Australia with an efficient supply chain on account of the two essential practices. PART TWO Critical Analysis of Sweeney, E., Grant, D. B., & Mangnan, J. 2015, "The implementation of supply chain management theory in practice: an empirical investigation". Supply Chain Management: An International Journal, 20(1), 56 - 70. Introduction The concept of supply chain management (SCM) was introduced by management consultants in the early 80s. Since then it has received recognition in the scholarly and commercial domain. However, despite the success in elucidation of SCM in either domain, there exists an evidence of divergence between the practice and the theory of SCM with reference to its understanding and corresponding adoption. There is ease in literature, but difficulty in practice. This part of the paper analyzes critically the above stated article to further understand the underlying concepts therein. The main aim of the article is to show that there is an existing gap between the theories on SCM and its corresponding practice. Analysis According to Sweeny, Grant & Magnan (2015), a plethora of evidence exist to denote that there is a substantial gap in theory and practice of SCM. This is based on the understanding of the concept and its application in the real world. The authors succinctly explain what they are about to tackle in a clear and concise summary. The authors point out that there are some key themes that are discussed in the SCM domain. First, effective SCM might result in optimization of the performance of companies. This is supply chain’s associated merit of competitive advantage to the firm as well as improved performance (Stock & Boyer, 2009; Miguel & Brito, 2012). This is true in the essence that SCM will allow the integration of the suppliers and customers thus improvement of the performance of the organization in question (Stock & Boyer, 2009; Miguel & Brito, 2012). When the SCM practices of one firm are unique to it and inimitable, the company can leverage on this to get the largest market share (Stock & Boyer, 2009; Miguel & Brito, 2012). The second theme discussed by the authors is that SCM has the integration of data and processes within the supply chain forms its arsenal (Janvier-James, 2012). However, a hitch is noted in that in practice this is not the case as the integration is not hand in hand with performance of firms. Thirdly, the many definitions developed for SCM in the recent past are based on different perspectives borne by the professionals. This makes the concept both complex in understanding and implementation (Janvier-James, 2012). This has created an era of confusion as well as the ambiguity of the relationship there is between the antecedents of SCM such as logistics and itself (Sweeney et al. 2015). The relationship between logistics and SCM has also raised a number of confusions (Sweeney et al. 2015; Janvier-James, 2012). The traditionalist view acknowledges logistics as part of logistics. The unionist’s view on the other hand, treats logistics itself as part of SCM (Sweeney et al. 2015). The re-labeling view takes the stand that SCM is synonymous with logistics. Lastly, the intersectionist views hold that there is an operational orientation between logistics and SCM (Sweeney et al. 2015). The authors conclude that the definitions call for a proper definition of SCM for its best future integration into company practice as is in literature. Sweeny, Grant & Magnan (2015) further observe that from the point of view of most literature, there is a need for a definitional construct that will elucidate SCM making its corresponding practice easy. Sweeny, Grant & Magnan (2015) therefore come up with four fundamentals construct to further inform the aspiring authors and authors in SCM elated literature, describe the major tenets of SCM, and strategically position SCM within the strategic framework of corporate. The four fundamental concepts cover four major areas as the name suggests (Sweeney et al. 2015). First, it engages the setting of SCM related goals or objectives. Secondly, it also covers the philosophy of SCM based on the concept of integration (Sweeney et al. 2015). There needs to be proper integration of processes, people and information to ensure that the supply chain is successful (Stock & Boyer, 2009). This second construct acknowledges that traditional systems ran parallel in the supply chain. However, efficiency is achieved through the integration of all the activities to meet the objectives with the value offered to the customer still being maintained (Sweeney et al. 2015). The third fundamental of SCM is the management of the supply chain. This construct triggers the philosophy of integration in the second, thus ensuring there is a strong focus on the management of flows in the supply chain (Sweeney et al. 2015). There is a need to maintain good internal and external relationships in the supply chain domain (Zachariassen & Liempd, 2010). The research seeks to look at the current level of SCM adoption, its level of understanding in practice, the critical success factors or indicators as well as inhibitors of SCM theory translation into practice and the measures to be taken to increase adoption of SCM at the firm level (Zachariassen & Liempd, 2010). Lastly, the fourth fundamental in the proposed model is the supply chain relationships, especially their creation and corresponding management (Sweeny et al., 2015). The authors used elaborate their research design based on the findings by other authors’ perceptions of the old quantitative research methods that have flooded the logistics research. The research takes a multi-philosophical perspective so as to answer the research questions proposed in reference to the four fundamentals of SCM earlier identified. Based on this precept the article conforms to the methodological pluralism; use of more than one method of data collection. The methodological approach has been shown to bear clarity and detail of what is being analyzed (Jaber, Bonney, & Guiffrida, 2010). Additionally, the methodology gives a deeper insight of the literature point of view (Stock et al. 2010). The authors then choose to use focused interviews, focus groups and questionnaire survey as methods that generate the data that would support their earlier stated arguments. The methods have been used to eliminate bias and have been done on a well stated rationale. The findings are summarized in tabular manner for ease in understanding and access. From the findings it is clear that the respondents of the focused interviews were more inclined to the unionist view earlier stated. The focus groups respondents’ answers alluded to the need of acknowledging environmental sustainability while setting SCM objectives. Additionally the center stage of the objectives setting should be on customer service and the financial dimension. Generally supply chain needs to be sustainable to allow future generations to also take part in the same (Zachariassen & Liempd, 2010). The findings from these methodology therefore bring sustainability into the picture. For the questionnaire survey many statistical approaches have been used by the authors, such as correspondence analysis factors, contingency models and significance testing among others. One of the findings herein is that there is a difference in adoption of SCM in large multinational corporations and the small business counterparts (Zachariassen & Liempd, 2010; Janvier-James, 2012). Based on the findings and the developments of the four fundamental constructs of SCM, the authors also come up with essential critical success factors and indicators of SCM practice. These factors are divided into business and the supply chain environment (Jaber et al., 2010). This collectively translates into the external SCM conditions. The second cluster looks at the internal SCM conditions and covers ne need for a customer oriented strategic response. This further shows that the large companies have SCM practices than small companies. The last cluster of success factor is under the umbrella of the key enablers of the supply chain. The key objectives of SCM earlier identified and incorporated in the article include the ability of the supply chain to meet the rising customer demands and to optimize the overall supply chain of an organization in question (Jaber, Bonney, & Guiffrida, 2010). Based on the four fundamentals or elements of SCM a new definition can be coined by most contemporary supply chain based literature (Jaber, Bonney, & Guiffrida, 2010). The research offers insight for governments and managements to embrace Supply chain in a different perspective other than the traditionalists stand. Based on the four fundamental construct proposed there is a need to educate, train and develop the personnel in the supply chain as well as the management to defuse the current ambiguity that exists. Longitudinal studies should also be carried out to act as measurement standards for SCM through time. The research also calls for a normative guide from researchers for the professions on the ground to completely integrate SCM in the new dimension based on the four fundamentals. The authors conclude that in as much as the research is based on the SCM practices in companies across Ireland, it is applicable and adoptable in any part around the world being that the structure of SCM is ubiquitous in nature. The article has achieved its purpose in elucidating the elements of SCM and most importantly coming up with and further backing up the four fundamental constructs outlined in this analysis. There is a need for future research to further prolong and elucidate the fundamental concepts in an expanded view so that the SCM practices can be embraced in a unified manner across the industries. Based on the analysis of the article it is evident that the authors are keen to observe that there is a gap in practice and what is succinctly presented in literature. Collecting different perspectives have made the article a success. It is evident that most authors concur that there is a gap in the integration of logistics and supply chain and thus complexity in the definition itself (Janvier-James, 2012). The article is laden with knowledge and is presented in a sequential manner such that even a layman can understand its direction. However, there is a gap that needs to be filled in the future research. The authors should in future explain what the statistical terms are as well as elaborate on each method of data collection in terms of merits and demerits. More research should also expand the already set concept by the article to look into the factors in logistics and supply chain that are more inclined towards the success of SCM. The practices that are involved in each of the four fundamentals of SCM identified should also be explored. Conclusion The article is well written and comes up with a theoretical construct that could aid in the adoption of the theoretically well explained SCM concept into practice. There is a sure evidence in the article to suggest that people view SCM depending on their professional backgrounds. A link exists between logistics and supply chain. While the paper has succeeded in its objectives, there is a clear indication that there need further research to fill in the gap that is existing in practice. Therefore as a recommendation al the professionals in the supply chain should reevaluate their practices and protocols as well as understanding to ensure that they are in the right track. 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