Supply Chain Management in the Aviation, Automobile and Telecommunications Industries - Case Study Example

Supply Chain Management in the Aviation, Automobile and Telecommunications Industries Name: Institution: Date: Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 Manufacturing Function 3 2.1 Aviation Industry 3 2.2 Automobile Industry 4 2.3 Telecommunications Industry 5 3.0 Distribution Function 6 3.1 Aviation Industry 6 3.2 Automobile Industry 7 3.3 Telecommunications Industry 7 4.0 Power Dynamics 8 4.1 Aviation Industry 8 4.2 Automobile Industry 9 4.3 Telecommunications Industry 9 5.0 Conclusion 9 References 11 1.0 Introduction Logistics and supply chain management have emerged as major sustainable organizational market competitiveness. In this regard, the concept has emerged mainly due to increasing need for organisations to establish alternative competitiveness due to changing macro economic factors. Sanchez and Heene (2010) stated that traditionally, organizations relied on tangible assets such as capital and economies of scale to develop market competitiveness and overcome competition. However, increased capital supply and multinational organisations emergence disregarded the capital competitiveness. Therefore, multinational organisations have increasingly invested in intangible assets such as logistics and supply chain management as competitive edges alternatives. This report evaluates the intangible assets competitiveness in the aviation, automobile, and telecommunication industries. As such, the assessment will focus on the manufacturing and distribution supply chain and logistics aspects finally offering the respective industry power dynamics. 2.0 Manufacturing Function Under the manufacturing function, this evaluation focuses on the establishment of industry stakeholders’ involvement in the production process as well as their relationships with main industry suppliers as a measure of their perception and regard of the supply management stage. 2.1 Aviation Industry The aviation industry is characterized with the production and manufacturing of highly sensitive products. In this regard, the high quality aircrafts and support infrastructure such as spare parts and airports construction and management make the manufacturing stage increasingly sensitive. As such, the world has a minimal number of aviation manufacturers who in turn do not outsource the services, but instead participate directly in the production process. At this stage, information flow between the manufacturers and the consumers is relatively high as most of the products are customized to the individual consumer needs. Therefore, consumers direct involvement in the production process through technical teams support and monitoring increases information flow and sharing. In addition, Flouris and Oswald (2006) asserted that the industry has few suppliers due to the sensitivity of the production process. As such, the manufacturers retain close relationships with their few selected suppliers often engaging in supplier evaluation process as well as improvement. Such improvements include offering both technical and financial support to the suppliers in a bid to ensure that their supply quality and reliability is maintained. Therefore, on the overall, the aviation industry participates directly in the production process, relates with the consumers and ensures the suppliers continuous improvement process adoption. 2.2 Automobile Industry The automobile industry operations are closely related with the aviation industry operations in that the produced products are normally used for increased transportation efficiency. Therefore, the two industries share the direct involvement characteristic. In this case, the vehicle manufacturing organisations are directly involved in the production process and do not outsource the services to other third party contractors. However, unlike the aviation industry where all the developed products are customized, the automobile industry produces few customized and many standard products and as such, consumers’ involvement in the production process is significantly minimized and consequently information flow and circulation controlled. On the other hand, the industry similar to the telecommunications industry and in contrast to the aviation industry has a high number of suppliers in the market. (Marcelle, 2004). Therefore, establishing and retaining direct close relationships with each of the suppliers is a challenging task. Therefore, the industry organisations contract third parties to handle and control the suppliers based on an annually updated suppliers list based on supplier evaluation and appraisal systems. Therefore, this evaluation establishes that despite the direct industry manufacturers’ involvement in the production process, the high suppliers’ base necessitated the inclusion of a third party expert supplier management agency. 2.3 Telecommunications Industry The telecommunications industry is one among the highly dynamic industries in the global market due to increased technology change. As such, the changing production approaches with technology changes requires the manufacturers to often change their processes as well as production infrastructure. Therefore, in order to overcome and mitigate this challenge, the industry is characterized with outsourcing the production services of various telecommunications components. Thus, as Plunkett (2008) argued, the known industry manufacturers are only involved in the assembling process to develop their own unique brands. Moreover, the industry has a high supply base, both with the large and small medium enterprises (SMEs). As such, managing information flow as a logistic measure across the industry poses a major challenge to the ventures. Consequently, as a mitigation measures, most of the industry manufacturers outsourced the supplier management aspect. As such, the industry has third party supplier management organisations that are mandated with evaluating and selecting suppliers for their respective clients. Moreover, the organisations are directly involved in the process of appraising the suppliers to ensure quality supplies retention in the market. 3.0 Distribution Function The distribution function is a mixture of both logistics and supply chain management. On one hand, the function I a logistical function in that it involves the flow and management of information between an industry manufacturers and their consumers. On the other hand, it is a supply management function in that it includes the management and control of products flow through the chain to the final consumers. 3.1 Aviation Industry Of the discussed three industries namely aviation, automobile and telecommunications, the aviation industry distribution system is the most unique. In this regard, the industry has a direct distribution system to imply that the developed products are sold directly to the consumers. The adoption of this approach has a series of industries efficiencies including information flow efficiency. Reduced distribution intermediaries ensures that the respective organisations acquire the opportunity to control information flow ensuring efficient communication and understanding and consequently reducing the common cases of miscommunication and information distortion evidenced in the indirect distribution channels (Sampson and, Warren, 2012). Moreover, the direct approach reduces the overall industry distribution costs. As such, this reduces the industry indirect production costs that ensure that the respective consumers acquire the products that are already expensive at a reasonable market price. Therefore, this analysis establishes that the aviation industry adopts the direct distribution channels to management information flow efficiency as well as reduces on the indirect production costs. 3.2 Automobile Industry The automobile industry distribution process differs with that adopted by the aviation industry mainly because of the high competition experienced n the market as well as the industry expansive consumer base. In this regard, the industry applies both the direct and indirect distribution channels. On one hand, for the customized automobile products, a direct distribution channels between the consumers and the manufacturer is adopted as the consumers are specific and already known. On the other hand, for the standardized automobile products the industry adopts the indirect distribution system where dealers, distributors and wholesalers acquire the right to market and sell the organizational products. Mendes (2011) argued that this approach is based on the push demand principles where the industry manufactures standard products and pushes them to the market for consumption. In this case, because no specific consumers exist, the organizations have to apply additional marketing approaches such as increased marketing and products advertisement. Consequently, although the process increases the industry overall indirect costs, it is profitable in that it enables them reach out to an increased and expansive consumer base, increasing sales and consequently increasing shareholders vale and revenues. 3.3 Telecommunications Industry The telecommunications industry distribution function is similar to the automobile function approach in the application of the indirect distribution channels. Regular and constant technology changes in the telecommunications industry make the industry operations unstable as well as increasing competition rates from both the small and large industry stakeholders. In this respect, it is imperative for industry players to develop alternative approaches to increase competitiveness. One of the most common adopted approaches is the use of indirect distribution channels through distributors with enough potential and industry capability to adopt and mitigate technology changes. As such, this enables the industry brands to transcend the respective manufacturers’ capability by spreading across the globe (Finkler, Kovner & Jones, 2007). However, this leads to reduced information management control loss by the manufactures allowing for the development and adoption of unique information approaches and strategies such as marketing, and advertising by the respective distributors. Moreover, the adopted approach reduces the industry upward communication from the consumer to the manufacturers thus risking consumer disloyalty and reduced satisfaction in the market. 4.0 Power Dynamics This evaluation section is a typical critical evaluation of the respective industry discussed logistics and supply chain functions. As such, the section evaluates which between the manufacturing and distribution stages has greater industry significance over the other offering reasons and justification for each. 4.1 Aviation Industry In the aviation industry, the most significant supply chain stage is the manufacturing stage. In this case, the stage is characterized with increased stakeholders involvement and corporation. For instance, the evaluation above evidences the close relationships between aviation industry manufacturers and the consumers through technical support and information sharing as well as with the suppliers. On the contrary, as Kamel (2006) noted this level of corporation between industry stakeholders is absent in the distribution function that is merely the delivery of the already agreed upon and developed industry product. 4.2 Automobile Industry An evaluation of the automobile industry establishes that the distribution function is the most relevant and important supply chain function. This decision is informed by the evaluation of the level of stakeholders involvement in the distribution function and conspicuously absent in the manufacturing stage (Li & Whalley, 2002). In fact, as measure to expand influence in the distribution functions, organisations establish forward integration relationships with the respective industry distributors. 4.3 Telecommunications Industry A final analysis on the telecommunications industry evidences that the industry places greater emphasis in the distribution process due to increased market competition. In this regard, as Uziel (2011) noted, the industry manufacturers outsource the production function and only assemble the products to build their own unique brands. However, they are actively involved in the distribution process through relationships and partnerships establishment with the established renowned distributors. Therefore, this evaluation assessment concludes that the industry lays greater perception and regard on the distribution rather than on the manufacturing function. 5.0 Conclusion In summary, the evaluation assessment evaluated the role of logistics and supply chain management in increasing overall industry efficiency. As such, the evaluation discussed on the manufacturing and distribution aspects of the supply chain management. On one hand, an evaluation of the aviation industry manufacturing function establishes that the industry applies increased consultations and relationships with both the suppliers and the consumers through technical and information sharing platforms. On the other hand, the evaluation establishes due to increased products customization the industry applies the direct distribution approach. As such, the evaluation establishes that the industry power dynamics lay in the manufacturing function. Further, an evaluation of the automobile and telecommunications industries distribution illustrate the use of indirect distribution channels. However, while as the automobile industry uses direct manufacturing that forms its power dynamic base, the telecommunications industry sources the manufacturing industry and thus its power dynamics lay in the distribution function. References Finkler, S. A., Kovner, C. T., & Jones, C. B. (2007). Financial management for nurse managers and executives. Philadelphia, Pa: Saunders Elsevier. Flouris, T. G., & Oswald, S. L. (2006). Designing and executing strategy in aviation management. Aldershot, England: Ashgate. Kamel, M. (2006). Collaboration for innovation in closed system industries: The case of the aviation industry. Engineering Management Journal, 18(4), 16-22. Li, F., & Whalley, J. (2002). Deconstruction of the telecommunications industry: from value chains to value networks. Telecommunications Policy, 26(9), 451-472. Marcelle, G. M. (2004). Technological learning: A strategic imperative for firms in the developing world. Cheltenham, UK: Edward Elgar Publishers. Mendes, P. (2011). Demand Driven Supply Chain: A Structured and Practical Roadmap to Increase Profitability. Berlin: Springer Berlin. Plunkett, J. W., (2008). Plunkett's telecommunications industry almanac. Houston, Tex: Plunkett Research. Sampson, E.,Jr, & St James, Warren D, II. (2012). Mentorship Interactions in the Aviation Or Aerospace Industries. Academy of Strategic Management Journal, 11(2), 35-49 Sanchez, R., & Heene, A. (2010). Enhancing competences for competitive advantage. Bingley, UK: Emerald Group. Uziel, D. (2011). Arming the Luftwaffe: The German Aviation Industry in World War II. Jefferson: McFarland & Co., Publishers. Read More