Global Supply Chain Management - Coursework Example

Global Supply Chain Management s Submitted by s: Contents Introduction 3 Planning Processes and Optimization 4 Developing a Supply Chain Strategy 5 Execution of the supply chain strategy 7 Integrating the supply chain to the business strategy 10 Conclusion 12 Bibliography 14 Introduction Remaining competitive in the current dynamic business set up proves to be a challenge for all forms of firms (Sarin, 2013, p. 93). Market expansions could be the correct move in the pursuit of new business opportunities and even though the supply chain is historically considered as a cost centre instead of a value centre for numerous firms, when there is an alignment between the business strategy and the supply chain, a powerful tool can be created to keep the business agile. Business cannot grow faster than their supply chain infrastructures and understanding the variety and limitations of a supply chain is important for expansion. Supply chains should be vigorous enough to weather evolving local, environmental and social demands while at the same time maintaining its agility to shifts in the market. Any business, which has a global supply chain, should consider incorporating its strategy to its operations (Zanjirani Farahani, Asgari and Davarzani, 2009, p. 43). A strategic supply chain plan that incorporates aspects of the formation business-strategy with dynamics of tactical supply-chain planning can make each one of them more valuable to the effort to plan compared to if either could be alone. Even though organizations usually weigh long-term decisions related to supply chains in regards to alternative sources of supply newer geographical markets, varying degrees of management use different approaches predominantly in isolation. Companies can make sure that relevant supply chain information guides the development of the business strategy through early communication between the senior management and the people who plan the supply chain (Sehgal, 2011, p. 143). This decreases the time needed for strategic implementation while allowing each group to pursue its forte where senior management creates the strategies that will make the most of shareholder value, the supply chain planners run optimization models to exploit the total costs of supply chains. Decisions linked to tactical supply chains emphasise in the adoption of measure, which will result in cost benefits for the company through decisions made within the boundaries of the principal strategic supply chain decisions that are made by the management of the firm. The decisions that arise from tactical supply chains take strategic messages from the company’s supply chain and create real benefits for the organization. Planning Processes and Optimization The planning of strategic supply chains is in the middle of a decision making range that is comprised of the formulation of business strategy on one side and planning tactical supply chains on the other end. Focusing on fundamental changes the capacity of distribution and manufacturing, planning is a long term endeavour in terms of impact and scope which can benefit from comprehensive optimization models as well as Advanced Supply Chain Planning Systems (APS), which is in most cases linked to medium and short-term planning (Cannon, 2006, p. 90). When applied in a strategic environment, the tools assist in determining what may be a suitable supply chain configuration for sourcing and the plants as well as distribution centres that should be kept open or closed. Conversely, strategic supply-chain planning is medium or short term in scope as supply chain planners use past demands to forecast the near term while adjusting the predictions founded on market intelligence or prearranged promotions. When applied in this context, optimization models as well as APS technology assist in determining the place and time to produce which items and the manner in which they can be distributed. Even though the formulation of business strategies also utilizes tools and frameworks, it needs a lot more creativity compared to tactical planning (Goodman and Dingli, 2013, p. 248). The optimal approach for the maximization of shareholder value is seldom obvious.it requires creative thinking along with easy-going discussions to identify, appreciate and agree on the likely actions. Despite the support to analysis provided by computers and spreadsheets, they do not inform the strategy. In the case of tactical supply chain planning, the options for decisions along with the dynamics that affect them are openly defined. The aim of minimizing the total costs of the supply chain including manufacture, storage and handling, along with transport, is slighter. Since strategic planning has a capacity to identify in advance the possible decisions and dynamics that might have an influence on these decisions, and is able to integrate the elements into software, they can be able to utilize optimization that depend on mathematical systems. Strategic planning in business cannot integrate clearly defined dynamics into software in the same manner that supply chain planning does since the formulation of strategies is partly concerned with attempting to identify what the dynamics may be. Nevertheless, strategic supply chain planning may benefit for optimization models that are used properly since tactical supply chain models may be protracted to include tactical decisions about opening new plants and closing plants that were in operation as well as distribution areas. These dynamics seldom change and the aim of minimizing costs is extended to include fixed costs making sure plants and distribution centres remain open as well as the one-off costs of opening new ones while closing the ones that exist. Developing a Supply Chain Strategy Understand the Business Strategy Supply chain managers should have a clear understanding of the manner in which the enterprise decides to compete since this is imperative because it makes the supply chain operation consider itself as an entity that faces customers while serving the competitive objectives of the company. Supply chain strategy is not a simple linear derivative of a business strategy as it can be considered as the aspect that enables the business strategy. In the event that the business strategy is to be the low cost provider, the supply chain must be able to support it. Similar to the development of the business strategy, the development of the supply chain strategy should entail looking in to the main competencies of the company, its focus as well as methods of differentiation (Gattorna, 1998, p. 446). The ability to strategically source components at attractive prices may support the business and supply chain strategies but only in the cases where the company has the competencies to achieve this successfully. Companies should consider their supply chain competencies while leveraging what they do well. They may also focus on a specific market or segment where they can be able to achieve supply efficiencies or seek to differentiate the company operationally through the provision of lower costs to customers or services that are not provided by other players in the industry. Evaluate the extended supply chain The next phase is conducting a comprehensive and practical evaluation of the capabilities existing within the company along with the extended supply chain. Companies should start by scrutinizing its assets and evaluating their level of support for their strategy. Worn-out machinery and disparate systems may imply high operational overheads and expensive process inefficiencies as well as redundancies, which are not in support of a low-cost provider tactic (Kersten and Hasin, 2010, p. 371). Formal supply chain assessments, that are conducted by non-biased external parties assist in the better appreciation of operational strengths and chances for improvements. Businesses should seek firms that are able to provide operational benchmarks within and outside the industry in order to assess key competencies. When the evaluation is complete, a team should be assembled to review and categorize recommendations in order of priority, validate the identified opportunities, develop a definition of the risks and the required aspects to allow implementation (Cuthbertson et al., 2011, p. 38). In the end, if there are any disparities between the supply chain strategy assets needs for operations in the company, the company may be required to make capital investments or change suppositions and alter the strategy completely. Come up with an implementation plan From this important activity emerges a go-forward supply chain strategy that has direct ties to business strategies and is highly particular to enablers and metrics since it has a defined collection of implementation necessities and contingencies (Ayers, 2010, p. 398). The creation of an implementation strategy should entail activities and duties, roles and responsibilities along with a corresponding timeline that is comprised of performance metrics. Companies should come up with a sub-team that will be tasked with guiding the execution and provide project management responsibility in order to deal with arising issues and monitor position. Development reflections In the entire development process, companies should remember to involve their supply chain partners and even though not all the details of the strategy are supposed to be revealed, communication on the manner of doing business should inform the involvement. Preferably, companies should aim to identify the mutual objectives they can execute on, as this will take them a step closer to getting a supply chain strategy while getting more knowledge concerning the other companies (Sarkis, 2006, p. 20). For instance, collaboration in the areas of product design may assist in decreasing the costs directed at research and development and provide alerts of new concepts of products that may not have been discovered without collaborating with customers. Additionally, the development of supply chains also entails assessing opportunities in order to outsource areas that are not included in a company’s core competencies. If a different company can do it in a more cost effective manner, it may be better to outsource in order to reduce costs and focusing more resources to the main capabilities that the company excels in. Execution of the supply chain strategy Management of performance Execution entails closely monitoring the implementation plan and application of appropriate project governance. Chances for success may be improved through management of performance in the entire implementation and further since monitoring performance enables a company to measure the level of success of its realization of the objectives of a strategy (An and Fromm, 2005, p. 143). It also allows people to appreciate their contributions and duties, resulting in a more cohesive company. Performance management is effective when individuals get rewards based in their performance and where reports are a regular occurrence. Furthermore, performance objectives should be employed to communicate the expectations of the business to external entities since when extended supply chain has more involvement; it will get more support and reinforcement. Reiterate cost-benefit procedure On a regular basis, companies should formally review their supply chain strategies in order to confirm whether they met the objectives set out by the business strategy. This review should also consider whether the needs of the partners in the supply chain have gone through any changes and changes that have occurred in the industry for instance through new competitors, products and practices (Epstein and Rejc Buhovac, 2014). Additionally, they should also reassess the supply chain organization in the event that the changes are sufficiently considerable to warrant it while using the same efforts to seek newer opportunities for position the company for success. Maintain communication with partners Execution of a supply chain strategy involves dealing with numerous different entities from within and outside, and in the same way that it is important to ensure the supply chain is aligned to the business strategy, it is imperative to execute in a way that is consistent with the various groups or stakeholders (Poonia, 2010, p. 189). The objectives of the components of the supply chain and the ones that a company deals with must be the same and executed at the same rate. A company may have the ability to move at speeds that other supply chains cannot maintain leading to misalignment as well as poor efficiencies (Flynn, Morita and Machuca, 2011, p. 80). Furthermore, some of the partners in the supply chain may not have the needed resources to make a commitment to the realization of the set objectives; therefore, good communication becomes imperative in ensuring that the extended supply chain is kept in sync. Avoidance of potential pitfalls There are numerous business failures that can be attributed to strategies that are implemented poorly and not in adherence to the vision and strategy development. The actual issue is inappropriate execution through indecisiveness, failing to deliver on commitments and not getting things done. In the building and implementation stages of the supply chain, there are more challenges such as creating an alignment between the supply chain and the business strategy. Numerous organizations create a supply chains strategy after they have identified their business strategy. Even though this method is capable of delivering some value, it cannot support the infusion into the development of the business strategy through powerful supply chain options that could considerably enhance the business strategy. The supply chain strategy is supposed to support the mission of the business strategy and it is as a result of these differing degrees of the enterprise where the required strategies should be created that organizations often have huge voids between the high-level business strategy and their supply chain strategies (Tayur, Ganeshan and Magazine, 1999, p. 689). Other risks associated with the separate development of the business and supply chain strategy include the development of a supply chain strategy without a proper appreciation of the business case as well as value propositions where the costs and benefits remain unknown. Another challenge is the utilization of various or new resources that were not exposed to the initial business strategy plans in developing the operational model, in so doing making the supply chain weaker. Communications that conflict and confuse the organization making the objectives contradict each other may also be an additional challenge. Organizational changes Both the firm and its corresponding organizational culture play a critical part in the development and execution of the supply chain strategy. Some of the commonplace challenges faced by numerous companies include lack of ownership where most of the processes and value effect of the supply chain are not owned in the traditional sense and lack of a common supply chain language in organizations across an enterprise. Other challenges include organizational focus where some managers dwell on functions and operations without appreciation for the multiple drivers model of the value effect and extension of the supply chain where majority of the supply chain initiative entail external entities thus making strong cooperation obligatory. Integrating the supply chain to the business strategy It is obvious that the supply chain of a company is supposed to be aligned to its key business strategy as well as the value proposition. For instance, a retailer who follows a daily, low cost positioning must have a supply chain that is created to minimize costs while maximizing inventory turns, possibly at the expense of other competencies like innovation or sustainability. However, research suggests that numerous organizations retain supply chains, which are disharmonious with their key business objectives resulting in decreased financial and market share outcomes (Graham, 2005, p. 379). Dealing with this issue entails analytic, strategic planning and a redesign of the entire organization. Harmonizing the strategy and the supply chain is a driver for better performance and there are numerous examples of market leading organizations that are associated with strategic congruency like McDonald’s, Cisco and Dell among others. These companies manage their supply chains in order to support their key positioning while delivering value as well as create industry barrier to entry. For instance, Wal-Mart has been able to achieve exceptional operational performance through managing its inventory, procurement and logistics in a sophisticated manner. These competencies have played a predominant role in enabling Wal-Mart to deliver on its low price brand promises while achieving huge industry margins and profitability. In a different case, Dell arched on the leadership of the personal computer industry in the nineties through offering low-cost and tailor-made products by using build-to-order manufacturing supported by widespread procurement and inventory management capabilities. Nevertheless, majority of the companies are not tactically coherent and this can take place for a number of reasons. For instance, the organizations that compete in multiple product categories experience a variety of competing demands from various product teams as well as functional departments resulting in supply chain designs of a complex nature as well as an inflated product portfolio. In other scenarios, feeble centralized management controls blended with global and outsourced supply chains will in most cases end up in misalignment. Some organizations do have a consistent tactical position in their markets, rather, decisions that affect that supply chain recede and flow based on short-term conditions of the market instead of long-term considerations such as sustaining a distinguished position in market. Senior management should develop the appropriate supply chain and competencies for their business strategies, where in order to achieve this; they can employ a simple three-phase approach: Clarify Even though majority of organizations seek an array of strategies, they usually put their emphasis on focusing in various parameters such as leadership, excellent positioning as well as exceptional service. Nonetheless, most managers may not be aware of the effects, which inspire their success and what they should leave for their competition in the industry. Through a comprehensive strategic planning procedure, management can be able to appreciate their winning positioning, in that they are simply required to meet competition and the aspects they can disregard as a result of inappropriate tactical fit. Prioritize Misalignments usually take place when decisions affecting short-term management weaken the ideal supply chain. This may be understandable based in the dynamic characteristic of some markets as well as quarterly financial imperatives with an example being the launch of cost savings program for a premium car brand (Sehgal, 2011, p. 155). The purchasing section may settle on the nethermost cost, but least dependable and innovative suppliers of parts. Managers should have guiding policies as well as a high level of discipline that will make sure that their supply chain decisions and competence investments successfully reinforce their key business strategy and their value plan. Measure As the adage states, “you can’t manage what you don’t measure”, it should also be remembered that only the right thing s need to be measured. Regrettably, most firms depend on inadequate metrics that cannot measure the connection between corporate strategies and the design of the supply chain. Managements should emphasize on or identify the main performance indicators that underscore strategic coherence. For instance, on-time shipment is a good representation in customer-drive organizations in regards to the management of supply chain aspects such as customer service, production as well as logistics performance. Conclusion Global supply chains are progressively developing complexity with the rate of innovation quickly outpacing the replacement cycles that are customer driven. As they are a part of an ever-increasing importance in present day business performance, supply chains should be leveraged as cores strategic competitive advantage. Supply chain management insights solutions should consider the increasing challenge of managing end-to-end global supply chains for manufacturing distribution, supply, retailing and reselling. Blending distribution, retail and reselling into a sole database allows businesses to get consistent reporting across various markets that have been segmented based in regions, channels and customers among other aspects. Subsequently, businesses have an ability to identify and enhance their efficiencies in their entire supply chains while making their relationships with suppliers stronger and optimizing investments to ensure quality and security of supply operations. Bibliography An, C. and Fromm, H. 2005, Supply chain management on demand, Springer, Berlin. Ayers, J. 2010, Supply chain project management, CRC Press, Boca Raton. Cannon, J. 2006, The entrepreneurs strategy guide, Praeger, Westport, Conn. Cuthbertson, R., Cetinkaya, B., Ewer, G., Klaas-Wissing, T., Piotrowicz, W. and Tyssen, C. 2011,Sustainable Supply Chain Management, Springer-Verlag Berlin Heidelberg, Berlin, Heidelberg. Epstein, M. and Rejc Buhovac, A. 2014, Making sustainability work, Berrett-Koehler Publishers, San Francisco. Flynn, B., Morita, M. and Machuca, J. 2011, Managing global supply chain relationships, Business Science Reference, Hershey Pa. Gattorna, J. 1998, Strategic supply chain alignment, Gower, Aldershot, Hampshire, England. Goodman, M. and Dingli, S. 2013, Creativity and strategic innovation management, Routledge, Abingdon, Oxon. Graham, G. 2005, Exploring supply chain management in the creative industries, Emerald Group Pub, Bradford, England. Kersten, W. and Hasin, A. 2010, Pioneering solutions in supply chain management, Erich Schmidt, Berlin. Poonia, V. 2010, Production and operation management, Gennext Publications, [New Delhi]. Sarin, S. 2013, Business marketing, McGraw Hill Education (India), New Delhi. Sarkis, J. 2006, Greening the supply chain, Springer, London. Sehgal, V. 2011, Supply chain as strategic asset, Wiley, Hoboken, N.J. Tayur, S., Ganeshan, R. and Magazine, M. 1999, Quantitative models for supply chain management, Kluwer Academic Publishers, Boston. Zanjirani Farahani, R., Asgari, N. and Davarzani, H. 2009, Supply chain and logistics in national, international and governmental environment, Physica, Heidelberg. Read More