Marketing Logistics and Supply Chain Management - Case Study Example

MARKETING LOGISTICS AND SUPPLY CHAIN MANAGEMENT by Student’s name Code+ course name Professor’s name University name City, State Date TABLE OF CONTENT TABLE OF CONTENT 2 Marketing logistics and supply chain management Introduction Supply chain management and marketing logistics are fundamental aspects in modernized organizations. It is evident that there is a paradigm shift in how businesses or organizations operate. It is worth noting that, the sole driving force to this change is the dynamism that has rocked the business fraternity in the recent years. Marketing has become a truly crucial element in organizations today as it determines the level of sales transactions as well as the level of consumer retention (Magee Copacino & Rosenfield 2005). Marketing is nowadays used by rival organizations as a source of competitive advantage seeking to gain supremacy in an industry. On the other hand, supply chain management is a sub branch of management that is involved in the acquisition and provision of goods and services required by consumers in the supply chain. Supply chain management as a doctrine is a product of modern times. It seeks to restore sanctity to the process exposed to raw materials till they reach the end consumer as finished goods. The supply chain management has had a remarkable impact on the performance exhibited by organizations that endeavor to inculcate its policies as stipulated (Schorr, Alexander & Franco 2009). The intention of this discussion is to delineate the impact, role and vital recommendations pertaining the marketing logistics and supply chain management undertaken by Hewlett and Packard. Conceptual background Each endeavor bestowed upon humanity has a set of logistics. This is because; logistics deals with the how, when, where, why, by who, what time an operation or activity will be undertaken. Marketing is no exception, and as it is a significant element in the organizational setting and has its fair share of logistics. Marketing logistics revolve around the distribution of goods and services. This involves an array of managerial parameters including; planning, delivering, and controlling goods and services flowing in a market. On the other hand, marketing logistics deals with how raw materials will be delivered to an organization that will in turn facilitate the meeting of customer demands. It is notable that marketing endeavor to establish the potential market size (Liker, Fruin & Adler 2009). This information is thereafter synthesized and analyzed to determine the resources required to ensure the prevalent demand size is fully satisfied. In addition, market logistics seeks to evaluate the cost benefit analysis in any undertaking. It would be illogical to satisfy consumer demands at the expense of the organizations well being. This is a fundamental step that involves calculation in determining whether what the potential clients are willing and able to pay for the product will meet the expenses of the organization (Christopher & Peck 2003). Marketing logistics ensure that the end product reaches the consumer through the most efficient distribution model that incorporates delivery time as well as efficient in terms of expenses (Pride & Hughes 2011). On the other hand, supply chain management seeks to create net value while building a remarkable infrastructure that will leverage logistics and synchronize supply with the prevalent demand size. This implies that, supply chain management is an approach that encompasses raw materials management into an organization, the modes of internal processing to develop finished products, and the distribution of the finished products to get to the end consumer. Organizations in the modern setting endeavor to achieve flexibility and focus on their individual core competencies (Riggs & Robbins 2008). This involves reducing the control of raw material sources and distribution channels. This is because; tentative research indicates that, it is more efficient and convenient to outsource these activities from other organizations that can perform them better and at cost effective terms. The intent is to reduce the operational logistics on a daily basis while aiming at enhancing consumer satisfaction emanating from consumption of the finished product (Buxton 2005). This model has facilitated an upsurge in the number of supply chain partners thus enhancing inventory visibility as well as improving the velocity at which inventory moves. There are numerous models, which have been propagated by scholars all over the world seeking to establish what is required to manage material movements across functional and organizational boundaries. The functions of supply chain management revolve around the three levels of management which include; strategic, tactical and operational levels. At the strategic level, supply chain management deals with network optimization, size of the warehouse and the distribution centers as well as facilities involved (Johnson & Pyke 2010). The strategic level in supply chain management ensures that the strategic partnerships between suppliers, distributors, and customers are operating efficiently. In addition, the strategic level has the mandate to align the overall organizational strategy in line with the supply strategy. This ensures that the organization has no instances of sub optimization as it would undermine the performance of an organization. It is worth noting that, the strategic level in supply chain management like in other managerial functions is bestowed the responsibility to deal with long term endeavors calling for exorbitant resource commitments (CordoÌ & Hald 2012). The tactical level, on the other hand, has the mandate to source contracts and makes involving purchase, production, and inventory decisions. The tactical team is bestowed the mandate to implement the strategic formulations through developing a conclusive transport strategy, which inculcates the frequency, routes used and contracting developments. It is the duty of the tactical team under supply chain management to benchmark functionality of an organization against the competitors and formulate best practices. Just like in general management practices, the tactical team has the responsibility of implementing the strategic level requirements through close negotiations to amend the unpractical clauses. The operational level in supply chain management has the task of managing the daily production activities which include; production scheduling, demand forecasting and planning, production operations and both inbound and outbound operations. The operational level deals with day to day supply chain functions that seek to produce finished goods and deliver the same to consumers in a timely and efficient manner (Cateora 2006). Importance of supply chain management and market logistics It is notable that market logistics is a component of the supply chain management theorem. Organizations are increasingly implementing workable supply chain mechanisms or networks that foster success in the global economy (Ayers 2001). According to researchers, new management paradigms perceive that business relations extend much further than the traditional boundaries and seek to avail a more organized approach that will derive benefits from the supply chain theorem. Tentative researchers opine that, Hewlett Packard Inc operates a mere dynamic and successful supply chain network. This is because; the company has exploited a fundamental element which entails focusing on the core competency of the partner in business. This is evident as information technology outsourcing and globalization have been combined to thrust the success of the organization through collaborative efforts of the supply chain partners. In essence, the modernized inter - organizational supply network is a form of organization in itself. It is, however, inherent that, the new form of organizational networks depicts complex formations, which is decomposable to individual firms (Boone 2012). The outcomes of supply chain networks are evident in the 21st century. First, there is the proliferation of multinational corporations, strategic alliances, and business partnership that depict significant success. This is because; supply chain management complements the earlier managerial practices like the just in time, agile manufacturing as well as the lean manufacturing process. Secondly, the prevalent changes in the technological sector have paved way for a reduction in telecommunication expenses. This implies that the main hindrance to multi dimension communication that hiked transaction expenses has been negated due to these developments. This implies that communication between the supply chain networks is cheaper and more reliable (Hugos 2003). Hewlett Packard Technological advancements are inevitable given the dynamics in the world today. This means that, there is a extremely lucrative market for advanced technological products. This is because; there is a prevalent notion that indicates that, the higher the technology, the higher the service delivery of a product. Hewlett Packard Inc deals in computer based technology specializing in hardware manufacture. This company has survived grave financial crisis in the past that facilitated the closure of rival organizations. In addition, the company has developed a brand name that supersedes the quality of products. This resonates to overwhelming brand loyalty from consumers all over the world. It is evident that the company has attained massive support from both corporations and individuals all over the world who continually look forward to more developed products from the company (Packard, Kirby & Lewis 2005). Hewlett Packard is headquartered in California, in the United States. The organization though specializing in hardware has a range of software products and its clientele range from governments, multinational corporations, small and medium sized enterprises together with individual consumers. By 2007, analysis indicated that, Hewlett Packard was the leading multinational information technology organization fending off prominent challenges from Chinese based firms like Lenovo. In 2012, Hewlett Packard was the leading PC Vendor in terms of sales. It is evident that, the products of Hewlett Packard, which include; printers, scanners, servers, work stations, digital cameras, and computers are available all over the world. Some scholars argue that the stability of the corporation emanated from a merger in 2002 with Compaq. However, regardless of the truth of that fact, it is eminent that Hewlett Packard has a working supply chain network. This is evident through research that depicts even though Hewlett Packard is headquartered in the United States; the company’s products traverse the entire world. This implies that there exists a working supply chain mechanism (Bowersox, Londe & Smykay 2009). History of supply chain management in Hewlett Packard Reliable research indicates that, in 2000, Hewlett Packard faced a complication in its implemented supply chain network. It is alleged that, Hewlett Packard used a flash memory that was highly profitable as it had gained the consent of mobile phone manufacturers given its lucrative features (Christopher & Prestoungrange 2010). However, the hitch emanated from the fact that, Hewlett Packard was unable to sufficiently obtain supply of the flash memory that was vital to meet the demand. This resonated to a 250,000 shortfalls in printers required worldwide. It was evident that, through this shortfall in demand, Hewlett Packard lost millions of dollars in revenue and its reputation was destroyed significantly. After this eventuality, the organization sought to implement a risk measurement component in the supply chain management policy. This is because; the management sought it prudent to implement a risk evaluation and mitigation component in the supply chain management theorem to negate any future eventuality emanating from uncertainties (Marks & Taylor 2007). The marketing logistics and supply chain management in Hewlett Packard would be as simple as delineated in the following figure; As indicated above, Hewlett Packard is a multinational corporation that traverses the entire universe. The organization has a supply chain network that relies upon various modes of transport to deliver raw materials or products. Given the technicalities that face the technological environment, it is only realistic to implement a faster mode of transportation when delivering raw materials to the organization. Air transportation is the relied upon the mode of transportation when delivering raw materials to Hewlett Packard. This aims at negating rampant loses emanating from using unreliable modes of transportation that lead to late raw material deliveries in the organization. On the other hand, since time immemorial, Hewlett Packard relies on resellers situated in main outlets all over the world as a sole distribution channel. The main reason behind this antic is because; Hewlett Packard being a renown brand has a wide range of competitors some of whom deal in counterfeiting. The only way to beat this challenge would be through commissioning resellers bearing the company brand name in various outlets around the world (Burt, Starling & Dobler 2003). The problem in 2000 resonated from the fact that, the management in the organization had failed to successfully implement working supply chain management that had resolvable inbound logistics (Reed 2011). However, in 2005, Hewlett Packard developed a procurement risk management which synchronized technological advancements coupled with new processes to manage risks emanating from the supply chain network. The three principal risks that Hewlett Packard’s supply chain management was exposed to include; price risk, demand risk, and availability risk. In the year 2000, Hewlett Packard faced a vehement risk which emanated from the availability of raw materials. The three risks revolve around cost, demand and availability that determine the success of a supply chain management. It is worth noting that, by the virtue that, Hewlett Packard deals in high tech products which call for exorbitant financial outlays. In addition, since to the rampant technological advancements, it is notable that availability of components varies hence uncertain. The short life cycle of technological equipments place another risk to Hewlett Packard in terms of demand. A product with a very short life span is very risky particularly if it fails (Ferrara 2012). Recommendations It is apparent that, Hewlett Packard faced imminent challenges that not only threatened the supply chain analysis but also the overall performance of the organization. Hewlett Packard has since then segmented its demand into low and high demand areas. To counter the low demand prone areas, the organization seeks to enter into fixed price – quantity contracts that will be operational for a long period of time (Krajewski & Ritzman 2012). On the other hand, the company would be in a position to forecast the requirements in terms of raw materials in the foreseeable future that would not contradict with the demand analysis. By sending the forecast to the suppliers, Hewlett Packard will be transferring the risk component of demand to the manufacturers. However, since Hewlett Packard offers a guarantee indicating commitment to the demand forecast, the manufacturers offers to extend gratitude by awarding price discounts given the large volume purchases. Additionally, it is prudent for Hewlett Packard to inculcate a component in the supply chain management that will focus on terms and structure of contracts. There are pertinent threats that do not only confine to demand, price and availability of components but also the structure of the contracts. The only feasible way to combat these elements would be by ensuring that Hewlett Packard develops software to evaluate the practicability of contracts. For instance, the 2000 scenario would have been negated by comparing the contract structure to other benchmark contract structures the company has held in the past. In the eventuality that Hewlett Packard inculcates the recommended changes in the supply chain management policy, excellent performance will be inherent (Frazelle 2002). Conclusion It is apparent that market logistics and supply chain management are fundamental theorems to performance of organizations in this globalization era. Marketing logistics is a common source of competitive advantage to firms that successfully implement the requirements of the theorem. In addition, supply chain management resonates to costs savings and adequacy of the organization in terms of meeting the consumer requirements. Hewlett Packard is a multinational corporation that has thrived immensely in the technological sector. The company headquartered in the United States deals in an array of products and seeks to satisfy its customers. Tentative research indicates that, the company almost plugged in its yester years as a result of inadequate supply chain analysis. This displays that, supply chain management plays a pivotal role in the management of any organization and it is only prudent that management teams consider its immense input. There are risks that emanate from supply chain analysis and organizations should keenly measure and manage the risks to contain any adverse situations. In the foreseeable future, Hewlett Packard will continue thriving in the technological industry as its reliance on a working supply chain management model continually thrusts the performance of the organization amidst challenging rivals in the industry. Reference list Ayers, J, 2001, Handbook of supply chain management. Boca Raton, Fla.: St. Lucie Press. Boone, L, 2012, Contemporary marketing, 2012 update. s.l.: Cengage learning custom p. 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