Introduction to International Supply Chain Management
International supply chain management the administration of the stream of merchandise and enterprises, includes the development and capacity of raw materials, of work-in-process stock, and of completed merchandise from purpose of root to purpose of utilization. This is the most important method used by the companies so as to effective deliver the goods and services to the end users of the society. Inventory network administration is the system of exercises where the raw material is acquired at that point changed into the usable products and after that at last conveyed to the clients through the various distribution channels.
Different companies are discussed in this report to understand the use of supply chain management systems used by them at different levels and their effectiveness in the operations and functions in an organization. There are several strategies that company will be opting to carry out the supply chain management operations. Performance evaluation methods can be done with the help of supply chain management, this is done as to know every areas which are to be improved in an organization. It is very necessary for company to opt as because it will help in sustaining in competitive market and to grow effectively so that they can be able to perform and avail best services to clients.
1) Organization's introduction
Walmart is a multinational retail company which is very effectively operating its operations and functions in market and it is one of the major player in restaurant and bar industry. It is largest company in world in terms of revenue, and also it is largest private employer as because it is having around 2.3 million employees working at different stores and managing every aspects in an appropriate manner. Earlier it was a general store in local area but later with effective services it become number one retail company world wide. Although company is performing well but it is very necessary for it to meet up with challenges of market, and different modals and techniques has to be implemented by it so that proper supply network can be carried out in effective manner. Walmart's supply chain management procedure is not construct altogether with respect to innovation. The organization has a sprawling system of about 160 appropriation focuses covering right around 120 million square feet and all inside 130 miles of the stores it supplies and a production network and coordination counselling organization.
2) Two supply chain models
Supply chain is commonplace for an assembling organization. In the event that the organization is a conventional one, it will create things that will be put away in stockrooms and different areas, making the store network more unpredictable. In the event that the organization utilizes a make-to-request plan of action, there will be no requirement for putting away completed items, yet there will be have to store crude materials and segments. Accordingly, obviously supply chains rely on upon the way of the organization. The taking after four models are extremely normal: incorporated make-to-stock, form to-request, constant recharging, and channel get together. Walmart can use different strategies and modals to perform and evaluate its operations and functions in an effective manner.
Integrated Make-To-Stock Model
The coordinated make-to-stock inventory network show concentrates on following client request continuously, so that the generation process can restock the finished goods stock effectively. This combination is regularly accomplished through utilize of a data framework that is completely incorporated. Through use of such a framework, the association can get ongoing interest data that can be utilized to create and alter generation arranges and plans. This data is likewise coordinated further down the production network to the attainment work, so that the changed creation arranges and timetables can be upheld by input materials.
This model is used by company which assists in management of the customers demands in effective manner, this helps in collecting the orders of customers and works immediately upon them. It supports in resolving all problems that are related to inventories and stocks that are required in various levels of production areas. Its basic benefit is that products and services that are availed to customers are customized and personalised and services are availed in effective and frequent manner, this also supports in customisation of mass production aspects.
Continuous Replenishment Model
The possibility of the continuous replenishment model is to always replenish the stock by working intimately with providers and additionally delegates. In any case, if the recharging procedure includes numerous shipments, the cost might be too high, creating the store network to fall. In this way tight incorporation is required between the request satisfaction handle and the generation procedure. Constant data about request changes is required all together for the creation procedure to keep up the coveted renewal timetables and levels. This model is most relevant to conditions with stable request designs, as is typically the case with dispersion of doctor prescribed medication.
Channel Assembly Model
A slight change to the build to order model is the channel get together inventory network show. In this model, the parts of the item are accumulated and amassed as the item travels through the appropriation channel. This is proficient through key partnerships with outsider coordination firms. These firms at times include either physical gathering of an item at a office or the accumulation of completed parts for conveyance to the client.
The two main supply chain configuration that Walmart will effectively apply in its operations and functions are integrated make to stock model and channel assembly model. These are very effective and appropriate model as because with its help company will be able to preform in proper manner and customer satisfaction can be attained by it. These two is the best option for the company as because it will be able to concentrate more on demand and request of clients or customers.
3) Porter's value chain method
Porter's value chain can be defined as a set of activities which a firm in a specific field adapt in the operations and to perform in order for the delivery of products or services that are valuable in the market. The concept was first described my Michael Porter and therefore it is named after him. The term is a major concept within business management. Porter proposed a value chain for general purpose that organisations could utilise to analyse all their activities in business, and see whether their connection is fitting fine or not. The performances within the value chain is a subject to determination of costs and will affect the company's profits.
There are several elements in which the value chain is classified into. Porter's chain focuses on the operational systems and process in which company converts the input into consumable outputs for the customers,instead of looking at departmental functions and cost types of accounting. The major factor in Porter's value chain is that division of activities into primary and secondary (supporting) activities.
These activities are directly related to physical creation, maintenance, sale and support of the product or service provided by Walmart. Primary activities includes the following:
Processes related to internal receiving, storage and distribution of the inputs. Supplier relationships are to be taken care as it is much important and valuable here.
Activities related to transformation that could convert the inputs into outputs which are to be sold to the customers. Operational systems are considered to be most valuable, hereby.
The activities that help in delivering the produced good or service to the customers.
Marketing and Sales
Those processes which are used in the persuasion of clients as to make them purchase from Walmart instead of any other competitors. The most valuable factors in this part is that what are the benefits in the product and the way in which those benefits are effectively communicated to the target market.
Activities related to the maintenance of the product or service, and its value after its being purchased by the customers.
2) Support or Secondary Activities
The activities that provide support to the primary functions of Walmart. Secondary activities may include the following:
Procurement or purchasing
The activities involving the purchases of the resources and raw materials which needs to be operated. This involves the process of finding vendors and negotiating with them for appropriate pricing.
Human Resource Management
That part of the company that functions to recruit, hire, provide training , motivate employees, reward them and retain them in Walmart. Human resources are the most important resources any company hold and their value to enhance the capabilities are larger.
Activities related to the management and processing functions of information , which is also for the protection of Walmart's database of knowledge. Costs of information technology are to be reduced and must always be updated with the advance technologies and technical excellence is to be maintained to create value in the production.
Support systems of an organization and are necessary for the operational functions to be maintained on a daily routine. The infrastructures that are necessary for their advantages are departments of accounts, legislation, administration and general management.
4) Integrated supply chain management facilitate renewing existing model
Integrated supply chain management assist the company to check operations that are related to manufacturing across many suppliers and also it helps in expanding and renewing current models used by Walmart. It is basically an aspect which has its whole responsibility of different functions that are involved in management and planning of every single activity that has to be performed in an organization. It includes manufacturing, direct sourcing, procurement and management activities of logistical aspects.
As mentioned in the diagram manufacturing, operations, procurement, purchasing, sourcing, supply chain, warehousing, distribution, finance, IT and logistics all these are when interconnected with each other in an effective manner then it is said to be as integrated supply chain management system. In integrated supply chain management an important aspect that a firm must understand is the 3 “V”-Velocity, Variability and Visibility.
Integrated supply chain management is very much beneficial for the company to revise its existing used model of supply chain management (Oliva and Watson, 2011). As following are some of the advantages that can be attained by company while revising its existing model.
As to renew its current used model it is very necessary that supply chain system has to be very flexible so that operations and activities can be performed in an effective manner. Company will be able to collect informations through different supply chains which will assist in knowing what all strategies are prepared by its competitors in the market.
With the help of integrated supply chain management system company will be able to manage the inventories and stocks in an effective manner. This will create a situation of less under and over stocks. This basically helps is maintaining the stocks in very well managed manner so that crises situations can be healthily handled. This will also support in attaining speed in operations and function of retailing in company.
If company will adapt integrated supply chain management system then definitely organization will be able to attain growth in competitive market as because it will be getting assistance in enhancing its current used supply chain model.
Company will be getting higher profits as models are renewed with the help of integrated supply chain management tool. This will reduce unnecessary incurred cost in operations and activities of the company, thus wastage can be avoided and marginal gains can be effectively attained by Walmart.
5). Conclusion and recommendations
Supply chain management has been concluded here to understand the how and what all manner company can carry out its activities in desired way. Also with the help of different supply chain models core concept has been understood, with help of Porter's value chain it is been described that how two main factors primary and secondary activities can involve in changing the aspects of current used model by company. Benefits of integrated supply change management system has also been studied to effectively implement the best model of supply chain management it activities of the company.
As Walmart is very effectively dealing in retailing of several goods and services, it is very necessary for it to properly execute each and every aspects of its business operations and activities. Supply chain management is a very important element that company has to perform to carry out all its activities and functions in an effective and appropriate manner. There are many models that company can opt to perform properly but the best option among all is integrated make to stock model. It is because this model helps in knowing the exact orders and request of the customers which will support company to avail them better and effective services. The model aid in knowing needs and wants of the customers are if there is a shortage in stocks with its help in very immediate manner that problems get resolved. It is very essential for company to opt this model as because it will support in making new plans and strategies that can be implemented by the company as to attain competitive advantages and also to get sustainable growth in the market. Company must takes several actions in very frequent manner so that they can handle crucial situations. It is also very necessary for the firm to check their customers are satisfied with their offerings and services or not . Stock if are not filled containers are empty then its the prior duty that company has to consider the most as to fill them as soon as possible.
1) Company's introduction and background
Marka is a retail store in UAE which is been established in 2014 and it is been listed in Dubai financial market. It is the first retail company which is been publicly listed in UAE. It is very effectively carrying out its operations and functions of retailing and it is offering many appropriate and satisfactory services to the customers. Its operational activity is relied upon franchise agreements, acquisition and different retailing concept. It offers number of brands all around the world which is its main USP that is attracting customers towards it. Its motto is to lead in competitive market from mid to high range in retail and want to expand and sustain in Middle east in hospitality industry.
2) Strategy of transition or firm from push to pull system
Supply chain system is in very effective manner are used by many companies as because it plays a very important role in smooth functioning of the company in retail sector. This will help in proceeding the functions as per the demand and various forecasting of customers probable order. There are two basic approach push system and pull system which company will opt to attain its objective and goals and also to attain in the competitive market. They are as follows...
It is the approach where organisation forecasts the demands and wants of customers regarding stock or inventory. It become very essential for the company to understand needs and requirements of customers so that they can properly forecast the orders that clients are willing to have.
This approach always starts with the order's of customers, first what customers are requesting are to be analysed then according to that further process is been done. Its main objective is to maintain the stock and inventory in sufficient manner so that company can avail services in effective way to the customers.
Marka can be make strategies so as to maintain its stocks as well as to retain its customers for long term, for that it become very necessary for the company to serve them in appropriate manner and they have to select the best supply chain management model. Firm can do strategies in terms of products, prices.
This strategy is very important and very beneficial for the company as because it will help in promoting same products in the same market with more efforts and plans (Tummala and Schoenherr, 2011). Several promotional acts are performed here so that customers come to know about company's products which will help in raising the rates of the sales.
Here organisation can be able get into new market as it can expand its business in a different market. Products will remain the same but market will be very new as company has never tapped that particular market. This is the approach which will help in transition of the enterprise from push based system to pull based system.
Penetration pricing method
This very effective strategy that company can opt as because this will assist the firm as to sustain in competitive market and can get benefits of capturing large numbers of shares in the market. This will help in attracting the customers more towards services of company which will ultimately help in attaining objectives and goals of the firm.
Layout and structure
Company can also use a strategy or revising its structure and layout so that customers can be more enthusiastically attract to attract new customers this will help in maintaining its existing customers as well. Layout plays a very important role so it has to be very well managed, this will lead a firm to transit itself from push approach to pull approach where organisation can be able to invest money more on demand rather than forecasts.
3) Factors considered by company while adopting Response business model
Response-based business model is the fundamental difference in anticipatory and response-based supply chain arrangements is timing. This model seeks to reduce or eliminate forecast reliance by joint planning and rapid exchange of information between supply chain participants. The availability of low cost information has created time-based competition. Managers are increasingly sharing information to improve both the speed and accuracy of supply chain logistics. There are few aspect that company has to focus while adopting the response based business model such as-
It is the most important factor that company has to consider the most as because it is a crucial element of any of the business. Time has to be managed in an effective manner so that company can invest them in other activities of it.
It also has to be kept as a priority issue by the company so as to sustain in the market. It is very necessary for Marka to maintain a proper stock record as because it will help in reducing the unnecessary wastage that is getting incurred in the operations and function of it.
Cost has to be very appropriately managed by the firm as because it will help in maintaining all the functions and operations of the firm. This approach as will assist in reducing the cost, thus this factors has to focus more by company.
Before offering any products and services to customers it is very essential for company to avail best services to them. It is very necessary for the organisation to consider about quality of raw materials that are used in manufacturing of different products.
4) Procurement strategies that company can opt
Procurement strategies are those tactics which the organisation chooses for ensuring long ranges of supply of products and goods to the customers so that organisation can be able to attain its set aims and objectives that has been standardised by company at planning stage. There are many methods through an organization can procure, basically there are two method or procurements- direct and indirect procurements. The direct procurement are productions which are related to finished goods, raw materials, parts and different components. Direct procurement basically focuses upon supply chain management which has its direct impact on manufacturing of products. Indirect procurement includes different varieties of goods and services of the organisation which starts from standard to complex till costly products and services. Hence among both indirect procurement is better option that an organisation can choose so as to perform its operations and functions in effective manner.
5) Adoption of collaborative planning, forecasting and replenishment in models
Collaborative planning, forecasting and replenishment(CPFR) are the method includes inventory network individuals sharing data progressively over the Internet, upgrading the community discourse amongst retailers and sellers. The procedure permits long-and here and now wanting to happen quickly, as data is shared with respect to conjectures, delivery and creation, purpose of-offer information, and request era. This approach is very helping and useful for the firm to perform its activities and operations in an effective manner. It can be collaborated with the model of integrated make to stock with effective way so that company will able to perform in appropriate manner and company will able to sustain and growth in the competitive market.
1) Overview of case
McDonald company is a well known organisation which is very well recognised by every individual people all around the world, the supply chain management system that company has chosen is not in effective manner hence it faces a lot of challenges that has also affected and impacted the organisation's image in the market. This happened as because the strategies that it selected was not appropriate and it was not able to deliver the services with proper use of supply chain management system.
2) Aims and objectives SCM like to apply in company
There are several aims and objective that company can consider as to implement the supply chain management in it, they are as follows-
- Maximise overall value
- Looking for sources of the revenues and costs
- Timely order
- Cost quality
- Replenishment of the raw materials and products.
3) SCOR model for strategy development
SCOR model is a tools that is used by the organisation so as to improve, address and to convey supply chain decisions with reference of suppliers and customers of the organization.
- The arrangement likewise incorporates deciding business tenets to enhance and measure production network proficiency. These business rules traverse stock, transportation, resources, and administrative consistence, among others (Diabat and Govindan, 2011).
- This progression depicts sourcing framework and material procurement. It portrays how to oversee stock, the provider organize, provider assertions, and provider execution.
- The make step incorporates, creation exercises, bundling, organizing item, and discharging. It additionally incorporates dealing with the generation system, hardware and offices, and transportation
- Conveyance incorporates arrange administration, warehousing, and transportation.
- The return includes the administration of business principles, return stock, resources, transportation, and administrative prerequisites.
4) Supplier customer relationship spectrum
Supplier customer relationship is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. In practice, it entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value and reduce risk of failure.
1) Cross-functional supply chain of the organisation
The model clarifies Supply chain system is an essential piece of a business: It truly backings and nourishes the general organization business procedure. The production network procedure must incorporate arrangements for all components of the chain: Buy, Make, Move, Store, Sell and Return. Inventory network administration includes the arranging and administration of all exercises required in sourcing and attainment, transformation and all coordination administration exercises. Organizations embrace store network administration to guarantee that inventory network is working proficiently and giving abnormal state of consumer loyalty with ease.
The goal is to take care of clients demand while keeping costs low and McDonald takes a shot at lean system to serve its clients as McDonald's doesn't cook its requests until a client has put in a particular request. Advantage related with this is the higher quality client benefit notwithstanding submitting unique request does not bring McDonald into frenzy circumstance that can cause delays. Additionally holding expense of burgers is genuinely high so JIT procedure encourages them to decrease the deterioration cost.
2) Challenges faced by firm
McDonald's has manufactured a worldwide domain in view of the consistency of its items, down to the thickness of fries and the quantity of pickles on a sandwich. In an indication of how definitely the eatery diversion has moved, McDonald's will endeavour to contend this year by extending a customisable burger test case program to up to 2,000 US outlets, or one out of each seven stores. That will allow purchasers to include bacon or mushrooms or caramelized onions to their Quarter Pounder. Intensifying McDonald's home market difficulties are the across the nation dissents that have broken out over raising the lowest pay permitted by law. The fast-food mammoth has turned into the perfect case for the battle for a $15 time-based compensation-more than twofold the national least.
The concept of supply chain management system is been concluded and different models of it has been explained in proper way to better understand the concept. Porters value chain's contribution in changes has been described also the benefits of integrated supply chain management in revising the current used model. Push and pull based model is been understood and transition of push to pull approach has been explained. The adoption of collaborative planning, forecasting and replenishment concept in contribution response models.
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