Integrated Supply Chain Management - Essay Example

INTEGRATED SUPPLY CHAIN MANAGEMENT By Student’s Name Code + Name of Course Professor/Tutor Institution City/State Date Integrated Supply Chain Management Executive Summary This report delves on the challenges likely to be experienced by this company in its quest to explore effective operationalization of logistics on a global scale in its attempts at establishing new opportunities in international markets. Logistics and supplies chain management deals with the processes of planning, implementing, and governing the movement of people or goods and associated supporting deeds within a system established to attain specific goals (Bowersox, David, & Bixby 2002, pg.8). The processes also concerns the management and control of the supply or flow of information, personal utilities, goods, and other amenities from one region to another in order to satisfy customer’s demands. In order to enter new markets in the Chinese market, our company expects to attain low cost sourcing, increased scales of economies, and an improved market. Once our firm achieves effective operations in its global logistics, it will enjoy the merit of low cost in sourcing for expertise, labour and other components. Whereas this company expects to attain improved logistics and supply chain management in this international front, there are several challenges, which are likely to impede growth in the international markets. This report has highlighted these challenges, which comprise of constraints in making effective sales experienced in international markets (Bowersox, David, & Bixby 2002, pg.17). This includes attempts of establishing proper international sales organization structures or reserved relations with the international supply chain associates within the Chinese market. This suggests that the business may face substantial risks or loss of control in these markets. This report further offers recommendation on how to attain improved economies of scale principally in spreading and in the production of substantial capital expenses associated with the production in the international marketplace (Vos 1997, pg. 377). Introduction Business networks and international integration into new regions will most likely open up more opportunities for this business in the international arena in the near future. In order to attain these goals, there is a need for establishing sustainable and effective connections between the resources and markets that are global as the main contributors of strategic and relevant logistic systems (Das & Robert 1997, pg. 244). This report presents the major issues that are likely to be experienced in the internationalization of global logistics, as well as supply chain management in a quest to internationalize operations. The paper will also address innovation and logistics on a strategic perspective. This report assumes an approach of the integration of logistic systems within present and in future business scenarios by comparing the domestic situations with the international circumstances. The central argument here is that in order to potentialize the innovation, and increase outcomes for our organization, there is a need for increasing internationalization levels within different business networks, and logistic systems. In order to attain operational international logistics across to international borders, a number of challenges have to be analysed. These will be followed by recommendations on how to handle these shortcomings in order to attain the advantages of increasing the size of markets or lowering the costs of sourcing. Content Challenges to Global Logistics According to Das and Robert (1997, pg. 250), adapting internationalization of logistics management is likely to experience different kinds of challenges in the planning, controlling, and the management of the movement, as well as the storage of new commodities across international borders. The major challenges in International Logistics are characterized by documentation, diversity, demand, and distance. This suggests that the distances are longer, the demand likely to be greater, the documentation more widespread, and substantial multiplicity in cultural expectations and requirement (Bowersox, David, & Bixby 2002, pg.37). The control and design of emerging global structures are likely to be a multifaceted managerial challenge for our organization. The major challenges comprise of the issues inherent in both generic domestic and global institutions that are still critical in logistics and supply chains. These institutions refer to those establishments that must coordinate, collaborate, and move information, as well as products from the stage of raw materials to the end consumer. The initial challenge is to accord the consumer with a value proposition for their money. Another major challenge in internationalization of supply chains is maintaining a supply chain velocity. This is normally associated by other partners linked to the typical chains of supply in the global arena. While our company’s supply chains and firms are making great attempts at augmenting the velocity of products in the chain of supply, in order to reduce costs there has to be the minimization of product damage or storage time. The border delays or transit time characteristic in global logistics is likely to be a major constraint to the velocity of our product (Das & Robert 1997, pg. 266). By extending in other countries, there can be increased exposures to damaging of our product either due to delays propagated by other partners or the flexibility of new customers towards our new product line in their area. An increase in supply chain variability is likely to be another challenge towards the internationalization aspects of the supplies and logistics aspects of our business. This will be a problem because both local and international supply chains are likely to be affected by variability in transit times and production. The next challenge is the maintenance of a satisfactory supply chain visibility. Usually, in the domestic operation, a single carrier normally handles most shipments (Bowersox, David, & Bixby 2002, pg.12). This normally facilitates the ultimate visibility and tracking of the shipment. In the global arena, the logistics and transit times of our company are likely to be relatively slower so extension of visibility is most likely a big issue. Visibility associated with the location of the product within the supply chain in the initial days coupled with positive tracking to establish the arrival will make the potential retailers or consumers to obtain the product from another source. The protracted transit times inherent in the global operations, as well as the participation of several carriers, will increase the necessity for proactive shipment trailing as well as the challenges of doing it (Monczka & Trent 1992, pg. 9). The last challenge is the vulnerability likely to be experienced in the other regions. These are especially pegged in the external environment that the supplies management and logistics in which the supply chain stand. One major influence, which has increasingly become important in the current times, is the development and unification of several economic unions like the NAFTA, ASEAN, and the EU. In other instances, the motive for the establishment of such unions was politically instigated, but experiences show that these have posed serious economic changes (Monczka & Trent 1992, pg. 9). This includes an increase in the interest of firms that do not belong to these groups seeking to invest in the member states of the unions. In such situations, seeking to strengthen or retain their position within these markets is difficult. Such unions in the international arena are likely to influence the physical organizations of multinationals that are based within such unions. Many firms operating in these regions dominated by trade unions typically organize their activities based on national bases and these are likely to affect logistics and supplies. Most of these challenges are concerned with many regulations in transport regulation, different legislation across diverse states, and problems in harmonization of taxes. Vulnerability in supply chains can occur in transportation or product equipment. These can be purposefully or inadvertently affected by different destruction or damage in the supply chain processes or infrastructure in these new areas. Less controlled and extended flows in global logistics can increase the openings of inappropriate interventions or damage (Zuckerman 2001, pg. 4). Addressing these Challenges: Whereas our firm may perceive global sourcing as a way of minimizing component and material costs, the lone value, which is important for consumers is a bargain in the landed cost, whilst still considering different elements like quality (Bowersox, David, & Bixby 2002, pg.17). Production in the new international markets has to ensure that decisions on reducing sourcing costs are fair for all consumers. Our company has to address our product velocity in China augmenting the velocity of products in the chain of supply in order to reduce costs by minimizing product damage or storage time. Furthermore, global operations intensely upsurge the scales of the transit times and variations in production often culminating in substantially greater safety stocks or inventory buffers (Bowersox, David, & Bixby 2002, pg.17). Therefore, our firm should collaborate with other partners in influencing the visibility of deal with the challenges caused by variations in supply chains. Recommendations The challenges experienced in logistics and supply chain management will compel this firm to reassess its whole logistics strategy and to shift from the traditional national approaches and embrace new international or cross-border structure. Several mechanisms can be applied to minimize distribution centres in a significant way and associated storage costs and inventory while improving and maintaining our customer service. Some methods or mechanisms for eliminating these challenges include the use of Just In Time (JIT) (Das & Robert, 1997, pg. 249). This concept represents an inherent characteristic of the paradigm of ‘lean logistics’ and it embodies the removal of non-value-supplementary processes in the entire supply chain process. This restraint stems from the bigger number of perceived incompatibilities thought to exist between the quest of adhering to the JIT policies on one side and the attainment of efficiencies in international sourcing on the other side. Adoption of the JIT policies will assist this organization in agitating for limited or single sourcing, the flexibility in suppliers, the establishment of intimate buyer-seller associations, and an enhanced reaction time to suppliers. Furthermore, the strategy will assist this organization in making small size and frequent deliveries. This mechanism was successful in Japan (Das & Robert, 1997, pg. 251). Therefore, the experience with JIT is likely to place a superior location and close by personal interaction between the suppliers and customer on a deep and regular basis. At the same time, global sourcing can be consolidated to attain economic lot. This is because the process is typically linked with cultural, multiple carriers, and language challenges. Volume consolidation will assist in addressing other issues like customs issues, legal complexities, and foreign exchange (Zuckerman 2001, pg. 5). Overseas transactions influence lead-time variability and lead time and they carry increased supply disruption risks. This could be coupled with rectifying and harmonizing services entailed in post purchasing. Logistics and Just-in-time in global sourcing requires multiple sourcing policies for satisfactory risk coverage. Our organization will need to adopt additional efficient and effective international supply chain logistics through the consideration of vulnerability, velocity, and visibility elements in order to accord value to consumers while reducing the threat and cost vulnerability associated with minimized velocity, visibility, and variability. Such balancing has to incorporate the numerous viewpoints of firms, consumers, the public and related governments. From the perspective of our institution, these comprise producers, manufacturers, material suppliers, wholesalers, retailers, carriers, and distributors. From the perspective of the capability, this perspective should incorporate individuals that are talented in manufacturing, sourcing, inventory management, warehousing, packaging, security, and transportation. A combination of variability, vulnerability, and velocity, as well as the breadth of our institutional will increasingly highlight the main concerns facing international management of logistics. For instance, this comprises the physical infrastructure and information necessary to track, move, and observe global shipments. Whereas the information on infrastructure may be easily expanded and improved, the current necessity has to be geared towards the establishment of consistency, integrity, and standards. The bigger concern is the corporal infrastructure as well as the need to attain the necessary capacity requirements within the organizational and physical capabilities of prevailing capabilities and relationships. Whereas increased capacity in physical infrastructure is receiving more focus, the challenge in coordinating several public-private relationships and partnerships still leads to many challenges (Zuckerman 2001, pg. 5). Moreover, the snowballing establishment of Information and Communication Technologies is regarded as one of the major enablers of production and commercial activities and internationalization of logistical and supply chain processes. This will be very instrumental in this organization especially during the implementation of strategic technologies that will be derived and will strengthen the organizations’ strategic goals. Furthermore, these will assist our business in adapting to with the business operations in the international arena. These information systems will be essential in supporting change. They will also assist in spreading and improving the strategic options of our organization. These will also assist in improving the quality of processes of decision-making as well as in supporting innovation. In order to eliminate challenges in firms and people’s uniqueness, i.e., cognitive and social aspects are the potential barriers, which have to be comprehended better (Monczka & Trent 1992, pg. 16). CONCLUSION In summary, in order for the efficient and effective internationalization of logistics and supplies management, it is imperative that our organization's leadership consider the issues and challenges to the operations of logistics and supply chain operations. Through the analysis of the challenges likely to be experienced in global supplies, our organization needs to balance these issues in order to gain a clear viewpoint of the public, the government, consumers, and other firms. Whereas the fundamental principles of supply chain and logistics are still applicable in the global sphere, the challenges and risks are significantly increased. In order for our firm to benefit from global marketing and sourcing, there is a great need for creating awareness regarding infrastructure changes and challenges. Finally, whereas the principles of logistics and supply chain still apply in the international environment, the challenging issues will increase as our firm attempts to gain from global sourcing. Reference List Bowersox, D, David, J & Bixby, M 2002. Supply chain logistics management. Vol. 2. New York: McGraw-Hill. Das, A & Robert, B 1997, ‘Just-in-time and logistics in global sourcing: an empirical study.’ International Journal of Physical Distribution & Logistics Management, vol. 27, no. 3/4, pp. 244-259. Monczka, R & Trent, R 1992, ‘Worldwide sourcing: assessment and execution,’ International Journal of Purchasing and Materials Management, vol. 28 No. 4, pp. 9-19. Murphy, P & James, MD 1994, ‘Logistics issues in international sourcing: an exploratory study." Journal of Supply Chain Management, vol. 30, no. 3, pp. 21-27. Vos, B 1997, ‘Redesigning international manufacturing and logistics structures.’ International Journal of Physical Distribution & Logistics Management, vol. 27, no. 7, pp. 377-394. Zuckerman, A 2001, ‘Managing global logistics operations." Transportation and Distribution, vol. 42, no. 6 pp. 4-9. Read More