International Supply Chain Management

This report explores the importance of sustainability in international supply chain management, focusing on key drivers like sourcing and procurement planning. It analyzes the impact of economic recessions on supply chains and discusses strategies for maintaining stability and achieving sustainable business performance. The report also examines various sustainability-centric approaches and their effectiveness in managing international business operations.

INTERNATIONAL SUPPLY CHAIN
MANAGEMENT

ABSTRACT
The assessment shows the focus on sustainability in International supply chain
management which is focused on flow of goods and services across the globe. Entire
study is based on academic literature where researcher reviewed different secondary
sources that is Books, Articles and journals to discuss focus of sustainability in SC and
its importance with regard to key drivers like, procurement and sourcing. Thus, it also
outlined the need of maintaining balance in SC to overcome economic recession.
TABLE OF CONTENT
ABSTRACT....................................................................................................................................2
1. INTRODUCTION......................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Review of academic literature............................................................................................1
 Sustainability centric approaches in supply chain........................................................1
 Criticality of sourcing and procurement process...........................................................2
 Sourcing, procurement planning......................................................................................4
 Economic recession...........................................................................................................5
3. Discussion..............................................................................................................................6
 Sustainability centric approaches in supply chain........................................................6
 Sourcing and procurement process................................................................................7
 Sourcing, procurement planning......................................................................................7
 Effective integration of sustainability focus....................................................................7
 Economic recession...........................................................................................................8
CONCLUSION...............................................................................................................................8
REFERENCES............................................................................................................................10

1. INTRODUCTION
International supply chain management is focused on trading of good and services
across the globe. The scope of foreign supply chain management is increasing because
of digital advancement which has introduced e commerce which is activity of buying and
selling of goods online. Further, international SCM is not limited to buying and selling
activities it involves movement of raw material, work in pro cess inventory till the
commodity is reached to final point of consumption. The assessment will outline drivers
and importance of sustainability centric approaches in SC. Further, it will outline
sourcing and procurement planning which is focus of organisation in order to manage
stability in supply chain management.
MAIN BODY
1. Review of academic literature
 Sustainability centric approaches in supply chain
Sustainability is ability of firm to maintain resources, investment, profits, revenue at
certain level in for managing balanced growth. According to Oner and Oztaysi, 2017, it
is stated that understanding over sustainability centric approaches is the foremost part
of management as it helps the company in determining its position as market increasing
market competition. The approaches promote strategical thinking which helps the
business in attaining competitive advantage. Theory of sustainability encourages ability
to design, make and deliver creative and high quality of products and services. The
approaches are considered to be effective because it enables cost effectiveness and
lean management.
Udagama, 2015, has discussed about Porter’s Market positioning strategy which
helps the firm in deriving competitive scope and advantage with the help of fur crucial
elements that is cost leadership, differentiation, focused cost leadership and focused
differentiation. This sustainability centric approach is used by organisation when doing
business across international boundaries. On the other hand, Gualandris, Golini and
Kalchschmidt, 2014, discussed about triple bottom line approach which is accounting
approach but is used by entities in managing balance between three aspect of company
that is financial, social and environmental. For example, Amazon which makes use of
Triple bottom line sustainability concept when doing international trading via e
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commerce. This assist the retailer in maintaining degree of social responsibility,
controlling environmental risk and managing economic value of services to balance
financial gains.
Figure 1: Porter’s Market Positioning Strategy
(Source: Porter's Generic Competitive Strategies (ways of competing), 2016)
Apart from this, Tasdemir and Gazo, 2018, discussed about lean management
approaches like Six sigma, kaizen, etc. which are sustainability centric and incorporated
in business to minimize waste and for managing smooth and systematic flow of logistic
services. Further, the scholar stated about sustainability centric retail model which aim
at understand end to end supply chain which improves traceability of entire product life
cycle. The model is centralised and therefore collaborates process by creating a pool of
potential suppliers and retailers which helps in managing innovation and developing
new international business relationships.
 Criticality of sourcing and procurement process
Supply chain management encompasses management and planning of
organisational activities which essential for sourcing and procurement. According to
Jensen, 2017, sourcing is supply chain management approach which helps in
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formalizing way of gathering and using information to determine best possible value in
market place to consolidate purchasing power. This approach is important to be
managed in order to control purchasing activities. In this company aim at selling goods
and services with the motive of value creation and cost effective basis. As per the views
of Hawkins and et.al., 2015, global sourcing is important because in this organisation is
focused on international expansion to increase brand visibility in global world. Thus, it is
necessary because it helps the enterprise on commodity segmentation and determining
best targets for products and services.
Figure 2: Strategic sourcing process
(Source: Sourcing & Vendor Evaluation, 2017)
However, Mahapatra, Levental and Narasimhan, 2017, has discussed about
procurement process which neds to be embedded in supply chain management for
increasing focus on sustainability. It is the process of evaluating, agreeing and acquiring
goods and services from external sources. This purchase decision is made by firm
specially in case when there are scarce resources. As per the views of step by step
technique is used by enterprise in managing international procurement process. The
steps comprise, recognition for making best purchase decision, specific need, options of
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sources, terms and conditions, determining price, placing purchase order, delivery,
expediting and finally inspection of purchases. On the basis of discussion, it can be
outlined that it is important for the business to explore knowledge and information
before making any decision of purchase.
On the other hand, Brindley and Oxborrow, 2014, outlined at more than 85 % of
sustainable development issues are linked to exploitation of human rights, disruptive
environmental practices and violation of human rights. Therefore, when managing
international business, it is important for the business organisation to focus on effective
sourcing and procurement process in order to avoid environmental and social risk.
Nevertheless, Smith and et. al., 2016, discussed about common strategic sourcing
process used by which focuses on three drivers of sustainability in SCM that is supplier
evaluation and selection, supplier management and development. The ultimate
objective of embedding model is strategic sourcing in which firm aim at analysing
spending, identifying requirements, analysing market and developing strategy. The
second objective tradition procurement which is attained by managing negotiations,
awarding and contracting and implanting strategy to make cost effective purchase
decision.
 Sourcing, procurement planning
According to Oelze and et.al., 2016, sustainable procurement process is important
for an organisation as it helps in effective marketing and dealing with scarcity of
resources. Further, sourcing and procurement helps in value creating and maintaining
cost effectiveness which also supports green government procurement and provides
oversight over organisational functions. When doing international business sourcing
play an important role in deriving profitable cost structure and competitiveness of firm.
In addition, it promotes high volume purchases that aid in maintaining long term
business relationships. In addition, it supports supply of high quality of products and
services at low cost.
On the other hand, Barrad, Valverde and Gagnon, 2018, stated that procurement is
an important strategic function as it focuses on managing profits of business. Likewise,
the importance of process is demonstrating its steam line process which reduce price of
raw material. In addition, the authors discussed about significance of procurement
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which is the ability to identify better sources of supply with the motive of reducing
'bottom line'.
According to Smith and et. al., 2016, integration of supply chain is a collaboration
of supply and demand management of enterprises. In accordance with the supply and
demand network it can be highlighted that supply chain network of company is based on
flow of information which is regulated by product and cash flow. However, supply chain
integration focuses on various aspects like, internal process integration which increase
collaboration among functional groups of an enterprises Further, there is backward
process of integration which promotes coordination and collaboration of suppliers within
1st and 2nd tier. Brindley and Oxborrow, 2014, discussed about complete integration
which focuses on collaboration of suppliers to customers. On the other hand, there is
forward process integration in which the business is able to collaborate with 1 st tier
shoppers.
 Economic recession
According to Witjes and Lozano, 2016, economic recession is contraction of
business cycle which results in slowdown of economic activities. It is also known as
negative economic growth for two consecutive quarters. It is indicated by drop in
spending that is adverse demand shock. The major cause of recession is inflation which
is increase in price of goods and services for specific period of time. It is the situation
which leads to increased unemployment which is directly proportional to drop in
consumer spending. Economic recession is disastrous for sustainability of business as
in this period the firm is not able to spend much amount on marketing and purchasing.
According to Campbell, 2010, recession ripple through the economy which leads to
decline in consumer confidence and finally spending power of buyers drop. The
scholars discussed about sustainability on business performance during economic
recession can be maintained by engaging suppliers in stable practices for gaining
insights if internal market and fluctuations. It helps in accumulation information and
knowledge which helps in maintaining stability in demand and supply. Engaging with
suppliers at time of recession can helps the business in offering product at low price to
manage flow of money and supply of goods.
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Wisner, Tan and Leong, 2014, has stated about collaboration with information
management, where companies are joining forces with their suppliers in a variety of
information management initiatives which are designed to inspire partnership and
exchange of relevant sustainability information to manage balanced supply chain
management. Further, it is important for the organisation to use risk aware contracts
which will help the business in sharing information managing risk and cancelling
penalties.
According to Simchi-Levi and et. al., 2018, enforcing payment terms at the time of
economic stability is another measure which can assist the business sin maintain
sustainable business performance at the time of economic downturn. Likewise, creating
variable cost structure can help in scaling down operation of organisation at time of fall
in demand. Moreover, it is important for the business to build flexibility in workforce to
flex work flexibility and schedules according to employees to attain better productivity.
3. Discussion
 Sustainability centric approaches in supply chain
It is important for business to maintain stability in in process to avoid exploitation of
resource, direct of investment, harmony and orientation towards technological
development. Maintaining sustainability in SC is a complex process where the firm
focuses on cutting waste and environment risks which can occur to its logistic
operations. The approaches are beneficial because it offers centralised system of
managing business functions at international level which promotes coordination and
cooperation in process. Supply chain approaches are essential for the entity managing
business across foreign boundaries because it aids the firm in balancing profits,
inventory and resources of organisation at the time of economic downturn and growth.
On the basis of entire, it can be said that key drivers of sustainability centric
approaches are social responsibility, economic stability and competitive advantage
(Govindan and et.al., 2014). It is analysed that it is import for the business regulation
international business functions to manage in novation in services by making optimum
utilisation of resources because it is the basic practice which helps the management in
maintaining cost effectiveness and balance in growth. Centralising functions is the driver
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of approaches with regard to supply chain management as it helps in keeping a track of
product life cycle.
 Sourcing and procurement process
Embedding procurement in sustainability supply chain management is an
effective process for organisation planning international expansion. The process helps
the business in cost reduction as it promotes adopting of wider approach to whole life
costing. Whereas, it is important to focus on intelligent sourcing as it helps in managing
purchase price, usage and disposable cost. Apparently, it is identified that procurement
and sourcing process is incorporated in sustainability to focus on supply chain
management as it promotes value creation because increase in balance between
procurement leads to ethical funding, fulfilment of corporate social responsibility and
improved access to capital which as it on potential incline of value of business and its
operations.
 Sourcing, procurement planning
Sourcing and procurement planning plays an important role in managing
sustainability in international supply chain management as it helps in deriving cost
structure of process with the help of which firm is able to derive lean and lack of
collaboration in business functions. The overview of process and entire process of
demand and supply helps the management in evaluating loophole and overcoming
weakness. Further, supply of quality products and services at low cost helps the
business in managing profits as well as consumer satisfaction. Besides, it can have
argued that procurement planning is significant for managing internal business functions
as in management is able to select vendors, establishing payment, strategic vetting,
negotiating contract and make actual purchasing of goods.
 Effective integration of sustainability focus
Integration helps in managing balance and stability in demand and supply which is
most beneficial approach of coordinating three key driver of sustainability that is
environment, social and finance. Moreover, it supports different types of collaboration
which can be managed by management according to their business types and
functions. For example, in case the firm needs to direct deal with suppliers for
procurement than the entity has decision making ability to coordinate and collaborate
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functions with the help of backward or forward process of integration. Thus, it can be
outlined by stating that supply chain integration is significant for sustainability focus
because it coordinates efforts of all functional groups that is purchasing, production,
marketing, research and development and logistics. The integration is indicated by
coordination of fir with suppliers through purchasing, customers through marketing, with
both customers and suppliers at same time and last end to end integration.
 Economic recession
Sustainability focus on supply chain at time of economic recession play an
important role in driving and shaping demand. The planning helps the firm in predicting
risk like political instability, response of suppliers and reduction in manufacturing and
productivity (Time to Recession-Proof Your Supply Chain, 2015). With the help of this
analysis the organisation is able to adjust price and promotion planning for the products
and services to control demand even at the time of economic downturn.
Further, the companies can develop flexible and agile supply chain in order to integrate
changes as per dynamic economic environment. Responsive SC helps the enterprise in
managing international business operations with the help of better visibility and
enhanced collaboration. This encourages predictable sourcing and supply,
manufacturing, conveyance, warehousing, and delivery (Slade, 2017). Thus, from the
discussion, it can be outlined that flexibility and pre SC planning help the entity in
accelerated decision-making with better analytics and support.
Lastly, optimizing designs as per corporate sustainability has become imperative
and helps the organisations in aligning functions to accomplish financial, social and
environmental performance. It is important for the companies to follow corporate social
responsibility when working at domestic or international level. This helps the
management in managing effective relationship with stakeholder which is related
positive returns and stability at time of economic downturn.
CONCLUSION
The report summarized about sustainability focus in supply chain management
which lay a crucial role in managing balance between flow of goods and services. The
study is based on academic literature where scholar reviewed different article, journals
and books to gain insights over SCM. Further, study outlined discussion over key
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factors of repot that is economic recession, integration of SC, sourcing and procurement
planning and sustainability centric approaches in supply chain. Thus, the report can be
concluded by stating that balancing social responsibility, environmental impact and
financial returns helps the business in managing successful flow of products and
services across international boundaries.
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REFERENCES
Books and Journals
Barrad, S., Valverde, R. and Gagnon, S., 2018. The application of system dynamics for
a sustainable procurement operation. In Innovative Solutions for Sustainable
Supply Chains (pp. 179-196). Springer, Cham.
Brindley, C. and Oxborrow, L., 2014. Aligning the sustainable supply chain to green
marketing needs: A case study. Industrial Marketing Management. 43(1). pp.45-
55.
Campbell, C.M., 2010. Corporate Sustainability and the Recession: Firms' Strategy
Response in a Financial Crisis.
Govindan, K. and et.al., 2014. Impact of supply chain management practices on
sustainability. Journal of Cleaner Production. 85. pp.212-225.
Gualandris, J., Golini, R. and Kalchschmidt, M., 2014. Do supply management and
global sourcing matter for firm sustainability performance? An international study.
Supply Chain Management: An International Journal. 19(3). pp.258-274.
Hawkins, T.G. and et.al., 2015. Improving services supply management in the defense
sector: How the procurement process affects B2B service quality. Journal of
Purchasing and Supply Management. 21(2). pp.81-94.
Jensen, P.A., 2017. Strategic sourcing and procurement of facilities management
services. Journal of Global Operations and Strategic Sourcing. 10(2). pp.138-
158.
Mahapatra, S., Levental, S. and Narasimhan, R., 2017. Market price uncertainty, risk
aversion and procurement: Combining contracts and open market sourcing
alternatives. International Journal of Production Economics. 185. pp.34-51.
Oelze, N. and et.al., 2016. Sustainable development in supply chain management: The
role of organizational learning for policy implementation. Business Strategy and
the Environment. 25(4). pp.241-260.
Oner, S.C. and Oztaysi, B., 2017. Sustainable Supply Chains and Risk Management for
E-Commerce Companies Using Fuzzy Inference System. In Intelligence Systems
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in Environmental Management: Theory and Applications (pp. 291-312). Springer,
Cham.
Simchi-Levi, D. and et. al., 2018. Designing and managing the supply chain: concepts,
strategies and case studies. Tata McGraw-Hill Education.
Smith, J. and et. al., 2016. Balancing competing policy demands: the case of
sustainable public sector food procurement. Journal of Cleaner Production. 112.
pp.249-256.
Tasdemir, C. and Gazo, R., 2018. A Systematic Literature Review for Better
Understanding of Lean Driven Sustainability. Sustainability. 10(7). p.2544.
Udagama, D., 2015. The Politics of Domestic Implementation of International Human
Rights Law. Asia-Pacific Journal on Human Rights and the Law. 16(1-2). pp.104-
149.
Wisner, J.D., Tan, K.C. and Leong, G.K., 2014. Principles of supply chain management:
A balanced approach. Cengage Learning.
Witjes, S. and Lozano, R., 2016. Towards a more Circular Economy: Proposing a
framework linking sustainable public procurement and sustainable business
models. Resources, Conservation and Recycling. 112. pp.37-44.
Online
Porter's Generic Competitive Strategies (ways of competing). 2016. [Online]. Available
through: <https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-
competitive-strategies/>.
Slade, E., 2017. 6 Strategies for Better Supply Chain Management in the Current
Economy. [Online]. Available through: < https://blogs.oracle.com/scm/5-
strategies-for-better-supply-chain-management-in-the-current-economy>.
Sourcing & Vendor Evaluation. 2017. [Online]. Available through: <
http://elargirindia.com/sourcing-and-vendor-evaluation/ >.
Time to Recession-Proof Your Supply Chain. 2015. [Online]. Available through:
<https://supplychainmit.com/2015/10/01/time-to-recession-proof-your-supply-
chain/>.
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