Global Supply Chain Management - Essay Example

Global Supply Chain Management of the Northumbria of the Id No: Programme Module Global Supply Chain Management Programme code: Module Code: MO255 Module Teacher name: Word Counts per task: Task1: 1025 words Task2: 1000 words Task3: 831 words Table of Contents Table of Contents 2 Introduction 3 Task 1: Analysing the global supply chain of Apple iphone 6 3 Task 2: Global supply chain management themes 6 Task 3: Critical evaluation of the articles 9 Conclusion 11 References 12 Introduction Supply chain management plays an integral part in the operation system of an organisation. It ensures that the products and services of a company reach the end users in proper time and manner. The success of a company primarily depends on the efficiency of its supply chain management system. Therefore, most of the leading global companies have provided immense importance to the supply chain process and logistics. The current report intends to provide a through idea regarding the significant issues of the supply chain process. The supply chain management process of Apple Inc. has been analysed in terms of its cost, quality and time management. The sustainability issues regarding the supply chain management process have also been discussed in the report. Task 1: Analysing the global supply chain of Apple iphone 6 Supply chain management refers to the flow of goods and services of the manufacturing units of the company to the end users. The process of supply chain management includes storage of raw materials, managing the level of inventory and distributing the goods from one point to another. According to Achrol, Reve and Stern (2011), sound supply chain management of a firm ensures offering greater values to the customers and competitive advantage. However, Aitken, Christopher and Towill (2009) argued that the sustainability of a company depends on the effectiveness of its supply chain management system. Apple Inc. created a brand image by offering innovative products and services to the customers over the year. The success of the company primarily depends on its efficient supply chain management practices. Based on the report published by the research firm Gartner, from the year 2010-2013, Apple Inc. has occupied the top position in terms of the supply chain management system. Due to the depreciated values of the inventory, the company has provided immense concentration on managing inventory. As, the product like iPhone 6 has been designed for the niche market, the company needs to focus on the quality parameter. On the other hand, the company also is required to manage the operational cost and timely delivery of the product. For creating a brand image among the stakeholders, Apple Inc. also needs to practice the sustainable business policies that causes minimum environmental footprint. Thus, quality, time, cost and sustainability are the four major factors that enable the companies like Apple Inc. to design an efficient supply chain system. Controlling the quality: Quality plays a vital role in influencing the buying behaviour of the consumers. As mentioned by Albino, Izzo and Kuhtz (2010), the companies are required to focus on the quality of the products and services for creating brand values among the customers. However, Arndt (2009) argued that quality management incurs huge amount of operational costs from the point of view of the company. Quality control mechanism plays integral parts of the of the company’s operations management. In most of the cases, the customers refuse the products due to the poor quality. Asiedu and Gu (2008) cited that due to the physical presence of the products, quality is considered as the most important parameters for the manufacturing companies. Apple Inc. has given immense focus on the quality of the products offered to its customers. The company ensures that only the best quality of the products is being delivered to the end users. For ensuring the quality of the products, Apple Inc. conducts numerous quality controlling methods before dispatching it to the customers. The company has never compromised with the quality of the products. iPhone 5 designed by the company has gained a huge positive response from the customers for its superior quality. For checking the quality parameters of the product, the company has provided trainings to the staff in the Fossconn plant. Apple Inc. has started to produce a small number of iPhone 6 units in the Foxconn factory for ensuring the quality parameters (Macrumors, 2015). Based on the result of the quality test, the products go for the mass production units at the various supply partner of the company. The company has given the immense importance on the sapphire display and battery life of iPhone 6. The stabilisation of the camera quality has improved a lot after the quality control methods implemented by the company. Moreover, the company has installed more efficient A8 chip in iPhone 6 for improving the performance. Timely delivery of the products: Customer satisfaction depends on the timely delivery of the products and services. Thus, the manufacturing firm are required to design the supply chain management system in a manner that ensures timely delivery of the products to the consumers (Azzone, & Bertele`, 2009). In this regards, Barker (2009) also added that the sound supply chain management of a firm can only ensure on time delivery of the products and services. In Apple Inc. inventory management has been given immense importance and it helps the brand to reduce the time of delivery. For timely delivery of the products, the company has designed a supply chain management system which is less complicated. First of all, the company procures the raw materials from various suppliers across the globe and ships the same through air. It saves huge amount time for the company. Then, the raw materials are assembled in the manufacturing units of China. From the manufacturing units, the products are shipped directly to the consumers through courier companies like FedEx or UPS. However, the customers can procure the products from online stores, retail stores, direct sales forces or wholesalers. Cost factor: Operational cost is a vital component for the manufacturing companies. According to Jones and Hines (2007), balancing the operating cost and quality of the products and services simultaneously can be considered as a difficult task for the companies. In order to manage the operational cost, the companies are required to manage its inventory level in an effective manner (Shokri, & Nabhani, 2015). Poor maintenance of the stocks may cause a huge amount of loss for the companies (Shokri, Oglethorpe & Nabhani, 2014). Apple Inc. has learnt from its previous experiences and concentrated on managing the inventory. In addition, the company mostly uses air medium for shipping purposes. It saves cost as it is less time consuming. The efficient inventory management methods used by the company also protect the wastage of the materials and thus save cost (Shokri, Oglethorpe & Nabhani, 2014). Sustainability issues: Apple Inc. has initiated various projects for designing its supply chain in an environmental friendly way. As mentioned by Keller, et al. (2009), sustainable business practices enables the companies to create an impact on the stakeholders. During the project of iPhone 6, Apple Inc. has stressed on using the renewable energy sources that has a minimum impact on the ecological balances. The company has also concentrated on reducing the level of carbon emissions to a minimum amount. The CEO of Apple Inc., Tim Cook has set an example of sustainable business development by greening the data centres, retail stores and the corporate offices and guided the process of reducing carbon emission from the manufacturing process (Staff, 2015). Task 2: Global supply chain management themes Theme 1: Managing inventory level: Inventory management can be considered as one of the most important aspects of the global supply chain management. King and Lenox (2011) added that in most of the cases, the companies are facing difficulties to manage the stock level. The increased stock has not only enhanced the operational cost for the companies but also affected the quality of the products. I this context, the CEO of Apple Inc. Tim Cook have mentioned that the firm is quite concerned about the depreciated values of the inventory. On the other hand, the companies are also required to maintain a healthy stock level to meet with increased demand. As the market demand becomes uncertain in most of the cases, managing a fixed inventory level becomes a difficult task for the global supply chain managers (Kleindorfer & Saad, 2009). Theme 2: Managing the suppliers: The role of the suppliers in an effective supply chain management system cannot be ignored. According to Kleindorfer, Singhal and van Wassenhove (2009), the firms are required to maintain a sound bonding with the suppliers for acquiring the best quality of raw material. In addition, the companies are also required to communicate the standards of the raw material to the suppliers. In this context, Kotabe and Murray (2009) mentioned the role of bargaining power of the suppliers in the supply chain management system. Companies like Apple Inc. or Dell can negotiate with the suppliers regarding the prices of the raw materials. The companies are also required to look that their bottom line is not affected with the supply chain management system. Theme 3: Quality factors: Due to globalisation, the companies have started to expand their operations in different countries. As stated by Kova´cs (2008), globalisation has increased the scope of operation for the companies. Therefore, the global companies have been facing problems in maintaining the quality, prescribed by the quality control departments of respective countries which increases the legal risk of the companies. Nestle has faced several issues regarding the quality standards while operating in India. The mismatch between the quality standards has been affecting the reputation of the companies. Theme 4: Designing risk mitigation techniques: The supply chain managers are required to develop risk mitigation methods To cope up with the supply chain related issues. In this regards, Lamming (2009) cited that the supply chain management job can be considered as a difficult ones due to its diversified roles. For example, if a firm is dependent only one supplier, it may face problem when that supplier fails to deliver the desired amount. On the other hand, the issues like global slowdown, natural calamities, and political instability may affect the demand of the products (Shokri, Nabhani, & Hodgson, 2010). It creates huge problem for the supply chain managers to manage the stock level. Theme 5: Reducing the cost: One of the most booming topics of the modern supply chain management system is to manage the cost factor. Lamming and Hampson (2006) mentioned that managing the operation cost and offering the best possible services to the customers simultaneously can be considered as a difficult task. Moreover, at the time of expanding the operation, the companies focus on reducing the operational cost. For reducing the operational cost, the companies have been concentrating on utilising the latest technologies. Reducing the intermediates also can be considered as a technique of the modern supply chain management system to reduce the operational costs (Nabhani & Shokri, 2009). Shipment procedure of the companies also plays an important role to cut down costs. Theme 6: Synchronisation between supply chain management and organisational process: In most of the cases, supply chain management system of an organisation is seen as a separate process compared to that of the entire manufacturing and marketing process of the firm (Oglethorpe, 2010). It creates problems for the firm to manage the operation. In this regards, Larson and Greenwood (2009) mentioned that a slight change of the product design may also affect the entire supply chain management system of the organisation. For example, the modification of the sizes of the LCD monitor requires alteration of packaging boxes. Therefore, the product managers or the engineers are required to consult with the supply chain managers before making any changes in the products. Theme 7: Problems of outsourcing: Globalisation has provided the scope of outsourcing of the particular services to the other countries. Outsourcing has given a competitive edge to the companies (Levy, 2008). However, it has also increased problems for the firms. The firms are unable to get the desired quality in the outsourced services in most of the cases (Oglethorpe & Heron 2010). Apart from that, the factors such as exchange rates, fuel costs and instable political scenario create a lot of problems at the time of outsourcing the services. Theme 8: Absence of the supply chain strategy: Most of the companies have been facing the problems of poor supply chain management strategy. Levy (2007) added that the firms are required to create effective strategies for managing the supply chain system and improving the operational efficiency. In most of the cases, the companies have been giving lesser importance to the supply chain management. It has reduced the efficiency and increased the costs for the companies. Linnanen, Bostrom and Miettinen (2010) cited that the proper amalgamation of the process design and supply chain management is the key for improving the business performance of the companies. Theme 9: Improper distributional channels: Improper distributional channels may hamper the quality of the supply chain management system of the organisations (Vlachos, 2008). For resolving the issue, the companies are required to handover the distributional procedure to a trustworthy channel. For example, Apple Inc. has provided the distribution responsibilities to the branded companies like UPS. Theme 10: Increased networking: Lack of co-ordination can be treated as a major problem in the supply chain management system of an organisation. Vachon and Klassen (2006) highlighted that a proper networking between the supply chain manager and the distributional channel can enhance the quality of the entire supply chain management system. Task 3: Critical evaluation of the articles The articles discussed in the seminar have provided a through idea about the different approaches of the global supply chain management practices. According to Vachon & Klassen (2006), the supply chain management process of the organisations needs to be designed based on the type of operation. Therefore, the process of logistics or supply chain may vary from industry to industry. Aronsson, Abrahamsson, and Spens (2011) have discussed the implication of supply chains in the health sector. According to Aronsson, et al. (2011), in the health care sector, the supply chain management system needs to design based on the philosophy of the patients. A combination of lean and agile management may help the hospital to manage the flow of patients in an effective manner. The entire operation management of a health care needs to be designed in a flexible way. Therefore, a strategic combination of lean and agile is the most vital requirement for the hospitals. Aronsson, Abrahamsson, and Spens (2011) also discussed the basic differences between the lean and agile supply chain management process. Lean strategies can save cost for the manufacturing units by managing the waste product in a better manner. On the other hand, Salvatierra-Garrido and Christine Pasquire (2011) mentioned the lean management practices for the construction companies. Salvatierra-Garrido and Christine Pasquire (2011) mentioned that for the construction industries, lean management practices are the most suitable option. The author has critically evaluated the concept of values provided through the lean system in the construction industries. The concept of values in the global perspectives has been shown in the article. The author has also provided a model that represents how the companies can deliver values through its operations. The supply chain managers are required to offer values from the perspective of stakeholders. Therefore, it can be inferred that Aronsson, Abrahamsson, and Spens (2011) have focused on the proper combination of supply chain management system. In contrast, Salvatierra-Garrido and Christine Pasquire (2011) stressed on the value addition through supply chain management process of a company. Dahlgaard and Dahlgaard-Park (2006) identified the difference between the six sigma process and lean management. The author has revealed that both the six sigma and lean management system have been designed from the concept of Total Quality management (TQM). The author has shown how the implementation of TQM can change the culture of the organisation. In order to deliver the products and services with100% accuracy, the companies are required to create an organisational culture that can nurture the practices of TQM. Andersson, et al. (2006) has identified the similarities and differences between the process of six sigma, TQM and lean management. The author has mentioned that the process of lean management is different compared to the six sigma and TQM approaches. However, the article also mentioned the fact that combination of the three processes may improve the performance of the firms. Most of the large organisations have been benefitted by the road maps specified by the lean management and six sigma process. In addition, the incorporation of TQM can deliver values to the organisations. Thus, both the above mentioned articles have explored the concepts of TQM, six sigma and lean management process for managing the supply chain management of an organisation and also identified the major differences among the three processes. Kampstra, Ashayeri and Gattorna(2006) and Matopoulos, et al. (2007) both have discussed about the concept of supply chain collaboration. Matopoulos, et al. (2007) have focused on the agricultural industry in the article. Throughout the research paper the supply chain collaboration process has been discussed. The journals have shown that for the success of the supply chain management process depends on the interconnection of the each stage. Therefore, the operation managers are required to design and govern the supply china activities in a manner that can be easily linked with that of the entire logistic system. Matopoulos, et al. (2007) have mentioned that for effective supply chain management system, inventory management plays a significant role. It reduces the waste products and ensures better operating profits for the firms. Moreover, the driving forces of the supply chain management system and its barriers have also been identified in the research paper. Mollenkopf, et al. (2010) has discussed on the concept of sustainable supply chain management system. The synchronisation process of green, lean and global supply chain management processes have been discussed in the article. All the other journals have provided the different approaches of the supply chain management process. However, Mollenkopf, et al. has depicted a new concept that can maintain the ecological balances. The author has mentioned that ,by reducing the carbon emissions and utilising the natural gases, the companies can progress towards the sustainable business practices. The author has also added that in order to deal with the competition of the global market, the companies are required to manage the supply chain processes effectively. The author has indicated the implementation of six sigma process that can improve the quality of the services. Conclusion The report highlights on the major issues of the supply chain management system. The companies like Apple Inc. have prioritised quality management for attaining customer loyalty. The issues such as inventory management, better networking, outsourcing etc. have been identified as the major challenges of the supply chain managers of the global firms. The report also concluded that sustainable business practices are the major concern for most of the global firms at present time. The discussions of the articles have also found that most of the companies have been focusing on collaborating the stages of the supply chain management system. Moreover, the authors have also stressed on TQM as a process of ensuring the quality parameter. Managing sustainable supply chain practices and the operational cost can be considered difficult tasks for the global managers. 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