Strategic Supply Chain Management - Coursework Example

Number: Toyota board of directors strategic supply chain manager Re: to expand the organization’s competitive presence globally by diversification Date: 21 march 2013 Overview There has been an immense deal of talk in the previous years on strategic supply chain management as a global standard for manufacturing industries in a new era. Strategic SCM requires excellent expertise by the human resources. Strategic SCM may be a source of a company’s competitive advantage if knowledgeably utilized. For instance, dell computer’s SCM is always seen as a perfect example of what strategic SCM is all about. The reason is that inventory time takes only two days from the receipt of an order until shipment. The massive change of globalization and the ever increasing competition in the world market forces organizations to enhance their organization and business management practices to boost their competitiveness. Supply chain management entails the preparation and administration of all activities engaged in supplying and procurement, exchange and all logistic activities. Essentially, it also includes collaboration and coordination with supply chain channel partners. Partners include suppliers, intermediaries, and third party service givers and clients. Strategic SCM integrates demand and supply management within and across businesses (Holweg, M et al, 2005, p 172; Handfield & Bechtel, 2002, p 370). Current situation Strategic supply chain management is an aspect of a company’s operations strategy based on the organization’s production system. The success of the organization has gained global coverage, which led other companies to follow suit in the production system. The organization currently operates on the following supplier partnering hierarchy; mutual trust and understanding, information, control systems, compatible capabilities, interlocking structures and joint improvement activities. Toyota’s means to capacity planning endeavor to eliminate inventory through its pull system, and the key objective being continuous improvement (Liker, 2011, p 29; Dudovskiy, 2012, para 3). Toyota also uses the lean system to attain superior customer care and eliminate all waste. Toyota has seven key types of non value adding waste in business. These are overproduction, unnecessary transport, waiting, excess inventory, incorrect processing, defects, unnecessary movements and unused worker creativity. Toyota also uses the just in time system that was put forward by kaizen. The just in time system organizes resources information flows and decision rules that help a firm realize the JIT principles. Just in time system is proactive in revealing problems, total quality management and pull production. The JIT system also seeks to eradicate waste and lessen inventory by engaging suppliers the process of planning, continuous improvement, improving equipment and machinery and cooperation (Elbert, 2012, p 12; Hino, 2006, p 62). Main text As a means of achieving global presence by Toyota, the organization needs to have a strategic SCM that will help the corporation use its existing lean strategy to attain diversity. In doing so, Toyota needs to shift its exploration to where resources are. Empirical attention ought to be focused towards the level of resource and not the level of the firm. The just in time supply chain provides such level of analysis where resources are, and the role of resources at this level may be outstanding. The development f resources may be essential to supply chain outcomes since chain members do not all share a general organizational affiliation. In this manner, shared supply chain resources may substitute conventional resources that unite members of an organization through strategy. By building on resources, a culture of competitiveness operates as an intangible strategic asset that may be advanced by interaction and cooperation of chain members. Competitiveness culture offers supply chain members with a pattern of shared values and principles that propel the chain’s approach to the marketplace. Therefore, competitive culture is deeply founded on culture and narrowly rooted on focused on a unique set of cultural orientations such as innovation, entrepreneurial and learning. These orientations make strategically fill the gaps between customers’ future desires and what is presently offered. An entrepreneurial orientation is the values of chain members, which are associated with the search for fresh market opportunities and the renewal of current areas of supply operations. Innovativeness orientation is the generation of fresh ideas associated with chain members’ values. Learning orientation, on the other hand, is the generation of fresh insights, which have the latent to influence supply chain operations. Each of the three orientations is fundamental but singly inadequate for the appearance of the higher order ethereal strategic resource. Culture of competitiveness is a valuable strategic resource in supply chain that may offer sustainable competitive merit and increased performance (Hult, Ketchen& Arrfelt, 2007, p 1042; Shah, 2009, P 161). Knowledge development is another strategic aspect that Toyota needs to develop in its lean strategy. Knowledge development is a four step model. The first element entails knowledge acquisition where Toyota’s supply chain acquires wisdom through information distribution. Information sharing happens at all nodes of supply chain as a result of shared collaboration between chain members. Due to lack of an influential culture inherent in supply chains, shared meanings and collaboration are necessitated to harness collective action (Bidgoli, 2010, p. 290). Achieved memory or organizational memory is pivotal in knowledge development as it serves as the mechanism in which knowledge is stored for future strategic us. As such, knowledge development is fundamental as the launching point for future learning behaviors. Information processing; processing, gathering and interpreting information are the chief job of organized collectivities like the supply chain. Information processing activities, on the other hand, mould the strategic choices made within firms and their resultant upshots. The knowledge based perspective focuses on the idea that distinct capacities to create and utilize wisdom create competitive merit and eventually increase outcomes (Lee, 2004, p 105; Chan, &   Lee, 2005, P 131). Conclusions One of the central issues in competition is the verity that competition between firms is shifting away from company versus company to supply chain v. supply chain. In reality, corporations like dell, Toyota and Wal-Mart have re-written the rules of the supply chain strategy and competition in their respective industries. The reason is that supply chain is currently not just a means for conveying materials, but also as a weapon for competition. The aspect of strategic supply chain management offers insights on why some organizations perform better than others in terms of cycle time. Toyota use of the just in time system and the lean strategy and philosophy in its operations shape the corporation’s market share, growth, market share and other integral metrics. The combination of knowledge development and culture of competitiveness is essential in enabling the firm to reduce the supply cycle time. Recommendations In order to attain a knowledge development and culture of competitiveness, integration should be adopted. The competitive and economic purpose of supply chain is the likelihood of taking time and costs out of the supply chain process. Supply chain draws closer to the real demand when time is taken out, eventually enhancing the possibility of producing what customers actually want. Through integration, customer satisfaction increases while working capital and obsolete stock reduce in accordance to the lean strategy. This makes supply chain to be competitive. Forming collaboration is another recommendation in order to adapt to the ever changing market conditions. Collaboration in the process of production should happen at any supply chain stage even among suppliers. Collaboration provides information to suppliers with regards to market changes, which will help them make vehicle parts that are in line with the demand in the market. Collaboration also aids suppliers in arranging for the right amount of motor parts to supply to Toyota. For illustration, if suppliers make auto parts that exceed demand, it will result in a stock pile up (Mark, 2004, P 32). This is against the just in time principle for Toyota corporation. Collaboration also helps the corporation to attain effective production to cater for diversification. Collaboration will also promote knowledge for development for Toyota production system (Bernhard & Angelides, 2006, p 285; Attaran & Attaran, 2007, p 398). Some of the implications of adapting knowledge development and culture of competitiveness are the moderating role played by the market turbulence. The extent of changes in the composition of new clients and their preferences is a critical element in diversification. Supply chains have to correspond to the diversification complexity with their own internal strategies and activities. Supply chain integration poses a challenge to the corporation since it takes place from the supplier’s supplier to customers. As such, integration of all operations of a supply chain is nevertheless an intricate matter. Collaboration also results in various obstacles involving Toyota and its suppliers. Although the corporation will have a close communication with the suppliers, the forecast amount may not be as accurate as hoped. The reason is that diversity results in market dynamics and uncertainties that make it difficult to forecast the actual demand. Toyota Corporation will have to be adjusting production in a bid to stabilize the order to suppliers. The fine-tuning of production may not be perfect, eventually resulting in peak production periods. In addition, the adjustment may not be perfect and may result in under or over production. Underproduction may not meet diversification demands while overproduction will result in waste, eventually violating the lean concept (McCarter, 2008, p 40). Maintaining collaboration and integration require the corporation to have experts across all sectors in a bid to meet the current needs, and the diversification needs. Thus, Toyota has to incur training costs in order to operationalize its strategic chain management in diversification and increasing its global presence. Bibliography Attaran, M., & Attaran, S. (2007). Collaborative supply chain management: The most promising practice for building efficient and sustainable supply chains. Business Process Management Journal, 13(3), 390-404. Bernhard J. A., & Marios C. Angelides. (2006). A model and a performance measurement system for collaborative supply chains. Decision Support Systems, 42(1), 283-301 Bidgoli, H. (2010). The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management. (Ed.). NJ: John Wiley & Sons. Chan, C.K., &   Lee, W.H. (2005). Successful Strategies In Supply Chain Management. Pennsylvania: Idea Group Inc.  Dudovskiy, J. (2012). Supply chain management in Toyota motor corporation. Accessed on 21 March 21, 2013 from: http://research-methodology.net/supply-chain-management-toyota- motor-corporation/. Elbert, E. (2012). Lean Production for the Small Company. NY: CRC Press. Handfield, B. & Bechtel, C. (2002). The role of trust and relationship structure in improving supply chain responsiveness. Industrial Marketing Management, 31(4): 367-382. Hino, S. (2006). .Inside the Mind of Toyota: Management Principles for Enduring Growth. Pennsylvania: Productivity Press. Holweg, M et al. (2005). Supply chain collaboration: making sense of the strategy continuum. European Management Journal, 23(2): 170-81. Hult, G.T., Ketchen, D.J., & Arrfelt, M., (2007). Strategic supply chain management: improving performance through a culture of competitiveness and knowledge development. Strategic management journal, 28(1), 1035-1052. Lee, H.L. (2004). The triple-a supply chain. Harvard Business Review 83(1), 102–112. Liker, J. (2011). The Toyota Way: Management Principles and Fieldbook. UK: McGraw-Hill Professional. Mark, B. (2004). Understanding the meaning of collaboration in the supply chain. Supply Chain Management: An International Journal, 9(1), 30-42. McCarter, M.W. (2008). Benefits, barriers, and bridges to effective supply chain management. Supply Chain Management: An International Journal, 13 (1): 35–48. Shah, J. (2009).Supply Chain Management: Text and Cases. India: Pearson Education India. Read More