The existing logistics supply chain of the Land Rover - Essay Example

?Running head: Case study Report for Land Rover Executive Summary The main aim of this report is to understand the existing logistics supply chain of the land rover. This report will look at the internal and external process that occurs within the organization. The report will also look at the ways in which improvement of the services delivered by the land rover can improve. The report will also look at the limitations towards implementing the recommended services. Introduction This case study of land rover and UPF-Thompson implicates the risks that the company possess if the indulge themselves in one supply management chain. It also illustrates the vulnerability of the supply chain both internally and externally (Braithwaite & Hall, 1999). The supply chain management that exists is engaged in a high trust of the organizations involved. The emphasis is usually put on the management of the workflows of individuals and the information that accompany it (Cranfield School of Management, 2003). The supply chain of the organization usually carries one or more of these value streams. Case for Land Rover and UPF-Thompson When The Land Rover company had decided that UPF-Thompson would be its main supplier of chassis, the land rover did not know that when UPF-Thompson, the manufacturer of chassis, would become insolvent the impact would be severe. KPMG, which was the receivers of the chassis, threatened the land rover that they would stop the supply unless the land rover company decided to make the up-front payment that was demanded immediately of between ?35 and ?45m. The reason as to why KPMG had decided to do this is that they claimed that they were entitled to recover on behalf of their creditors (Cranfield School of Management, 2002). The sole supplier agreement, which was signed, deemed to provide a valuable asset. A court ruling that was made recently justified this action as they stated that for the benefits of the creditors, the receivers were legally permitted to exploit the vulnerability of a customer. Until a temporary injunction could be secured which entitled Land Rover a short-term reprieve, then the land rover company was forced to halt the production of the discovery temporarily. The consequences of the injunction were that land Rovers supplier of network and around 1500 workers who worked at the Solihull plant were laid off. Process stream The land rover was using an end-to-end supply management perspective. The vulnerability of the supply chain is high because the supply chain is a linear pipeline between the organizations that exist in the network. The emphasis of the product class, which is characterized by efficiency and their value-based usually, dominates the day. The emphasis is usually put on the management of the workflows of individuals and the information that accompany it. The supply chain of the organization (Helferich & Cook, 2002) usually carries one or more of these value streams. This type of supply chain over relies on the willingness of the parties to share credible and reliable information since the availability of the information is central. The organizations that are involved require a high level of cooperation and trust. In this kind of supply chain management, the supply chain partners act and think as one since there is a seamless flow of materials and information. The principles of lean manufacturing and agile are the managements’ process ideal to approach the supply chain management (Haywood, 2002). Disadvantages of the process stream The risks that come with the supply chain are mainly the financial risks that are attached with it. The risks that are associated with it are come from the poor quality, the shifting requirements of the marketplace, the volatility demand and the supply chain performance, which is sub-optimal. The supply chain management seems to focus on the lineage flow of materials and information. It does not focus on the vulnerability of the process. The supply chain process appears to be controllable and stable that is protected from any harm but it is not. In reality, the supply chains are not self-protective (Movahedi, 2009). Besides that, the supply chain management that exists makes the management team over reliant. The management relies on the existing secure, reliable, and efficient communication. Additionally, the transport and distribution infrastructure makes them not to look for a plan B in case of any failure of the existing management system. For instance in the case for Land Rover and UPF-Thompson, Land rover’s over reliance made them go down the drain and stop their supply chain (Kallrath &Maindl, 2006) Advantages of the process stream One of the advantages of the supply chain that exists is that the view that the supply chain is a seamless pipeline helps a lot in the management. The organizations that are involved require a high level of cooperation and trust. According to Chatered Management Institute (2003), in this kind of supply chain management, the supply chain partners act and think as one since there is a seamless flow of materials and information. If the partners involved think and act together as one, this means that they apply the notion that two heads are better than one. This is useful to the management since new and better ideas are processed in the organization (Peck et al., 2002). Assets and Infrastructure The organizations that are involved in the supply chain managements are usually the fixed commercial facilities or sites of everything that is involved in the supply chain. These include the distribution centers, the factories and the retail outlets. The same infrastructures also contain the It assets. The IT assets that are contained in the infrastructures are the communication networks for the internal organization and the other organizations involved in the supply chain management (Braithwaite &Hall, 1999) Some of the IT assets that are contained include the hardware, software, processing and communications services. Through the national and international infrastructure’s communication, the individual organizations involved are connected through them. Some of the communication devices that are used include the satellites, cables and radio masts. The links of the transportation or the distribution infrastructures are also another way through which the organizations communicate (Larson & Halldorsson, 2004). The links involved in the transportation systems include the roads, railway lines, waterways, flight paths and grids. The assets that the supply chain management usually consists of include the boats, trains and airplanes. These assets usually assist in the transportation of goods. These goods do not function if the people who know how to control and maintain them are not available (Coyle et al., 2008). Disadvantages of the assets and infrastructure The supply chain management seems over depend on the existing assets and infrastructures. For instance, if one of the infrastructures was to burn down, this means that the supply management link would be cut short since the supply chain management team usually relies on the infrastructures that house their communication devices (Blanchard, 2007) Advantages of the assets and infrastructures One of the advantages that the assets and infrastructure that the supply chain management have is that they are quite well arranged. If an item is to be picked and transported from one place to another, then the route it is going to take and the communication channel are well arranged for efficient movement of the Cargo (Haag et al., 2006). Organizations and Inter-organizational Networks The supply chains that exist are the inter-organization network. The organizations’ commercial and public sector manage or own the assets and the infrastructures through which information and products go through. The power dependencies between the organizations that are involved in the supply chain management are the trading relationships that usually exist. As in their process stream, the supply chain management strongly relies on the fact the organizations consist of powerful and result-oriented individuals who will not abuse the powers vested on them. In addition to that, the inter organization usually rely on the fact that the information available will be shared selflessly for the benefits of all the organizations involved (Halldorsson et al., 2007) Disadvantages of the organizations and inter-organizational networks The supply chain management faces many risks. The appointed managers who work in the supply chain management working hard and tirelessly to meet the organizations objectives is not enough. Some of the things that can contribute to the fall down of the organizational and inter-organizational networks are the commercial interests of the organization, the competitive pressures that they face, and the existing strategic goals that are divergent. The supply chain management cannot work alone in ensuring the objectives of the organizations are met. They require the support of the other branches of the organizations (Lambert, 2008) The levels of the existing network between the organizations and inter-organizations network can have instability. According to Christopher (1998), Instability of the networks can be caused by business failures or acquisition that can emerge within the supply chain management. Dominant organizations usually have the capabilities and power and will to manage their own supply chain management network but are usually pulled back by the inter-organizational networks since they greatly rely on the other network for decision making (Kouvelis, 2006). Advantages of the organizations and inter-organizational networks One of the advantages that exist in the inter-organizational networks is that they are resource intensive (Cooper et al., 2007). The inter-organizational networks that exist usually share the available assets making it easier for the organizations that do not have their own assets. This helps in an organization focusing on other developments. Additionally, the large and sophisticated customers who are opting for single sourcing as this way reduces the cost (Simchi-Levi, 2007) have reduced the number of direct suppliers. The Environment Factors that are to be considered in the environment that affect the operating and trading environment include the political, economic, social and technological elements. These elements usually affect the framework of the supply chain management. Most of the risks that are associated with these elements are most likely beyond the power of the supply chain management. Informed decisions can be made early in advance if the environmental elements that can disrupt the supply chain management (Cooper et al., 2007). Supply chain management chart (Peck, 2003). The technological developments that occur can affect the demand for the existing products. Existing products can be disrupted by the launch of new products in the market, new channels and the models of businesses being open up and if the supply chain cooperation and visibility are created better. The technological developments can also increase dependencies or create new supply chains, organizations and the existing infrastructures (Hines, 2004). In elements of the socio-political, there are disruptions that can occur without any warning. Some of the disruptions that can occur include protests, regulatory changes and strikes. The best thing about such disruptions is that they are unlikely to occur but they need to be planned prior to their occurrence. Prior planning of such events include a routine scanning of the environment in which the trading occurs so that any likely threats that are to occur are detected early in advance (Chartered Management Institute, 2002). In matters concerning the geo-political environment, many factors have contributed to globalization. Globalization has led to businesses changing their supply chain since international trading has been facilitated. Some of the factors include the end of the Soviet Union and the emergence of China after isolation. In viewing the macro-economical elements that would affect the environment there are some instances that would affect the supply chain management. These include terrorism, currency fluctuations and war (Mentzer et al., 2001). Recommendation If the supply chain management is to function effectively, then staff training has to existent. This is because the existing environment contains tools and technology, which, if implemented in the correct way can be much more effective (Haywood, 2002). In addition to that, the term supply chain is interpreted different by different organizations. In order to have an effective supply chain management, then the employees and the management team must understand the terminology meaning of the supply chain (Sheffi, 2002). Besides that, the supply chain visibility is not evident in most organizations. Therefore, the visibility of both the upstream and the downstream of the operation process must be well visible if the supply chain management is to be effective (Peck, 2002). Conclusion The case study of the Land Rover and UPF-Thompson provide us with a clear view of the supply chain strengths, weaknesses, threats and opportunities. It also gives us an oversight of how the supply chain management of the Land Rover works well. In addition to that, there are recommendations of what can be done to the existing supply chain management to improve. Furthermore, the limitations, which exist, have also been identified. References Blanchard D. 2007. Supply chain management: best practices. New Jersey: John Wiley and Sons. Braithwaite, A. & Hall, D. 1999, Risky business? Critical decisions in supply chain management. Part 1, Supply Chain Practice. (1)2:40-47. Braithwaite, A. & Hall, D. 1999, Risky business? Critical decisions in supply chain management, Part 2, Supply Chain Practice. (1)3:44-58. Chartered Management Institute. 2003. Business Continuity Management. Retrieved on 10th March, 2012. http://www.managers.org.uk Chartered Management Institute. 2002. Business Continuity and Supply Chain Management. Retrieved on 10th March, 2012 http://www.managers.org.uk Christopher, M. 1998 Logistics and Supply Chain Management: Strategies for Reducing Costs and Improving Service, Financial Times Prentice Hall. 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