Supply Chain Management Analysis and Proposal for Highway England

This report provides a comprehensive analysis of supply chain management (SCM) within the context of Highway England, a government-owned company responsible for maintaining and improving England's motorways and main roads. The report begins with an introduction to SCM and its importance, followed by an examination of the new requirements for Highway England. It then delves into relevant theories such as Procurement, Supply Chain Management (SCM), Agile Supply Chain, Lean Supply Chain, and Material Requirement Planning (MRP). The report critically analyzes these theories and their application to Highway England, discussing inventory management, supplier relationships, customer responsiveness, and the use of information technology. Furthermore, the report explains the importance of agile and lean supply chain strategies for Highway England to meet customer needs and optimize performance. It also covers the role of MRP. Finally, the report concludes with a discussion of proposals for enhancing Highway England's SCM practices.

SUPPLY CHAIN
MANAGEMENT
1

Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK ...................................................................................................................................................3
I) A description and discussion of the new requirements of Highway England with the support of
relevant theories...............................................................................................................................3
2 DESCRIPTION AND CRITICAL ANALYSIS OF IDENTIFIED BUSINESS MODEL ..........9
3. EXPLANATION AND DISCUSSION OF PROPOSAL............................................................3
CONCLUSION....................................................................................................................................4
References............................................................................................................................................6
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INTRODUCTION
The supply chain management is important aspect that relates to supervision and
management of material, information and finance as they relocate in a procedure from supplier to
business concern to wholesaler to retailer to customer. It simply means managing the flow of
products and services, including mobility and holding of raw materials,processed products from the
location origin to final consumption (Bearzotti, Salomone and Chiotti, 2012). With the help of
supply chain management, company can provide effective services to its customers by assuring
proper availability of products as per the demand. It further assist in reduced merchandise, transit,
storage and packaging cost. The major benefit of supply chain management is that it help business
enterprise in having better control over inventory. The supply chain management is effective tool
that can also be used to improve the performance and profitability of business. In this report,
different aspects of supply chain management will be studied in the context of Highway England.
It is government owned company with duty for administrating, maintaining and improvising
the motorways and main roads in England. The corporation is entitled to use the strategic network
to assist in promoting the development and prosperity of the economy of nation (Mehrjerdi, 2013).
In this report, learning will be shown regarding supply chain management and related theories.
Thereafter, description and discussion of the new requirements for Highway England will be
provided. Further, critical analysis of the selected business models on the cited company and there
impact will be provided. Also, explanation of proposal for change to Highway England with the
objective to enhance the performance of company will be provided.
Overview
From the provided case scenario, it has been identified that Highway agency in England is
shifted into State entity as Highway England in 2015, April. The corporation is responsible for
functioning and maintenance of road network. At present,company have strong infrastructure
investment needs of road network so that it can develop the wanted sustainable economic growth
across England.
TASK
I) A DESCRIPTION AND DISCUSSION OF THE NEW REQUIREMENTS OF HIGHWAY
ENGLAND WITH THE SUPPORT OF RELEVANT THEORIES.
Since its inception that Highway England is growing business that requires variety of
infrastructure and other procurements to assure long term growth and development. In addition to
this aspect, entity needs to manage its performance so as to fulfil the expectations of its key
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stakeholders (Gambardella and McGahan, 2010). In this respect, it is also significant for company
to follow the rules and regulations laid down by government. Such as, provisions of Competition
Act must be adhered which assure fair and transparent competition in the market. As per this act,
the suppliers must be involved effectively and must not be compelled to sell their offering below the
market price. In order to fulfil the aforementioned requirements, it is important for company to
consider different theories and frameworks (Zachariassen, 2008). Some of which are discussed as
follows:
Procurement:It means the procedures encompassing all activities related with obtaining and
managing the supply of inputs by the company. The supply chain management is the subdivision of
procurement function related specifically with the supervision, governance and development of
continuous relationship with suppliers and the related flows of supply inputs (Viswanadham, 2013).
It further involve different theories such as;
i) Supply Chain Management (SCM): It is important function that enable oversight of material,
data and finance as they motion in a process from supplier to manufacturer to wholesaler to retailer
to final customer. It includes coordination and integration of different flows among and within the
organization. It is further defined as concept that mainly focuses on integrating and administrating
the sourcing, flow and control of material with the help of gross system orientation across twofold
purpose and multiple tiers of suppliers (Jacoby, 2010). The main consideration of this theory is to
have appropriate system for supply chain management to minimize inventory level as it add to cost
of business. The effective supply chain management needs modification from administrating
individual activities to integrating functions into main supply chain process. The main consideration
of SCM is on strengthening buyer supplier relationship (Supply chain management theories. 2016).
Accordingly, Highway England is required to consider on developing strong and long term
relationship with suppliers. In this respect, focus must be given of collaborative advantage that
result into fruitful outcomes for both suppliers and buyers. In order to facilitate this, Highway
England can focus on assuring maximum communication with suppliers leading to their active
involvement in business (Ross, 2013). The suppliers can in return provide important market
information etc. With the help of SCM, Highway England can effectively plan and manage all the
functions included in sourcing and procurement and different other logistic management functions.
The SCM will act as chain that link each components of the production and supply procedure from
procurement raw materials to development of end product. It will as guide to Highway England to
facilitate them to use different technologies to strengthen logistic management. This further results
into reduction in cost and improved supply chain management.
The supply chain management (SCM) permits the entity to incorporate consumers in the chain
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modified the flow of information so as to have better knowledge of the growing needs and
preference of customers. Therefore, it is effective way for addressing contrasting needs of
customers resulting into their improved loyalty. In addition to this aspect, SCM enable the company
to incorporate the function of product development together with different business function so as to
strengthen the communication between manufacturing staff and employees (Leeman, 2010). The
key concern of supply chain management by Highway England is developing a proper approach to
trim down the flow of material and processed goods at every stage so as to increase productivity
and cost savings.
Therefore,Highway England is required to manage the viable components of procurement
management which are discussed as follows:
 Manage inventory investment in the chain: according to this, the each element of the
supply chain wants to possess not higher than the reasonable share of inventory. Example,
wholesaler wants to keep less inventories and prefer to keep stock held by the manufacturer.
Due to this aspect of vendor managed stock has become a trend in supply chain management
(Chandrasekaran and Raghuram, 2014). Therefore, inventory must be shifted back to the
merchandiser and due to this there is reduction in investment and risk for various members
in the supply chain. It is crucial for reducing inventory investment in chain as result of
declining product life cycle.
 Developing supplier relationship: it is significant to develop strategic alliance with
suppliers for effective logistic management. Therefore, Highway England must assure they
perform business with modest number of suppliers. In this respect, vendor reassessment
method can be used which will further enable in determining suppliers with functional
excellence so that company can ascertain which supplier is giving better services (Monczka,
and et. al., 2011). Further, company can decide how they prefer their suppliers to perform
business with them. In order to facilitate effective supplier relationship, Highway England
can assure active participation of suppliers in business decisions like, determining
production intervals, new technology for transit etc (Tavakoli, 2016).
 Enhanced customer responsiveness: In order to stay competitive, companies must
emphasis on upgraded supply chain endeavours to foster better consumer service via
enhanced frequency of time-tested product deliveries etc (Kersten, 2011). The growing need
on customer service level is stimulating entity to have alliance with suppliers. It further
result into improved efficiency to render qualitative services to customer including prompt
delivery of products etc.
 Developing a competitive benefit: With the help of supply chain management function, the
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Highway England can develop competitive benefits by applying resources to employ the
procedure. With the help of SCM,company can facilitate cost leadership in market by
assuring reduction in cost, waste management etc (Supply chain management theories.
2016).
 Introducing the use of information technology: For assuring the effective operations of
supply chain, the information technology play a crucial role. It further help in strengthening
the communication efficiency of company. This will help in obtaining shipping details,
customer demand etc (Kwa and Kim,2016). The information technology can be used in
different areas of supply chain management. Such as in transaction processing, IT can be
used to minimize the human error, trim down of cost etc. also, the information technology
can also be used to facilitate supply chain planning and collaboration. Other than this, most
importantly, Information technology is used to track the order and coordinate with delivery.
ii) Agile Supply chain: This strategy is helpful in the situation when Highway England
purpose to pick out new modification for the business to intensify customer base and also to
furnish superior quality of products and services. Agile approach can be adopted for
managing quality materials in the products as well as services and also for enhancing
business performance as well as productivity level (Azizi and Jamali, 2016). This technique
is also imperative in terms of intensify innovative and creative approaches. Further, the
approach is suitable not only towards market conditions but also towards new international
opportunities. This model will be best for Highway England to maximize the service level
for fulfilling demand and providing excellent customer service (Tideman, 2016). When
demand all of a sudden increases and primary suppliers are incapable to meet the existing
demand then agile supply chain strategy can be employed to hold back and deliver the
satisfactory services to the customer (Supply chain management theories. 2016). Therefore,
in the Agile supply chain strategy, suppliers will basically permit flexibility within the cost
structure. Agile method is also helpful in terms of deciding development and prosperity
aspects (Jacoby, 2010). Therefore, fresh products and services can be presented at the
market place so as to meet the present needs of customers. The strategy is refereed as the
most viable method since it help the enterprise to render superior quality products so as to
attain competitive benefit in market.
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iii) The Lean Supply Chain Strategy: The chief aim of this strategy is to increase
organizational value through decreasing the level of wastage Total cost can be reduced
through operating all the business activities according to the level determined. As per the
method, it is appropriate for Highway England to communicate data properly in all business
areas and as a result, all the activities will be managed suitably. Sales and profit margin are
well-kept on the basis of cost factor which also assists the customers to get suitable services
from the business entity ( Viswanadham, 2013). Due to non accessibility of right human
resources, Highway England may face various issues and this can also feeling whole
manufacturing activity of the company On the basis of entire discussion, it can be said that
Lean strategy is useful for Highway England since that help the business entity to minimize
the level of resource wastage and also to reach towards a stable level of production .
However, on the basis of case approach, it has been found out that Highway England is
using Agile method where in the business seeks out developed growth opportunities from
the existing market place (Ross, 2013). Moreover, this is also suitable in terms of expanding
the business and enhancing opportunities of more sales and profit.
iv)Material Requirement Planning: Material requirement planning can be defined as a
production planning, scheduling and inventory control system which is utilized to manage
manufacturing processes and the approach is software based; however it can also be
performed manually. Highway England can employ this strategy with the purpose to assure
that materials are available for development of roads and sign boards are available for
delivery (Tideman, 2016). It will also help the business entity to keep the lowest possible
material and product levels in the store. Highway England will be capable to plan all the
production functions as per the needs and demands of clients. Further, it is effective method
that help in integrating information from production schedule with that of stock and the bills
of material to compute buying and shipping schedules for the inputs needs to develop and
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maintain proper roads in UK (Anderson, 2011). Basically , material requirement planning
focuses on three main functions. Initially, it assist to assure that proper raw materials are
accessible for manufacturing function and the required goods are accessible for entity to
prevent deficit. The proper material requirement planning will help in reducing wastage by
assuring minimal possible material and product level in the inventory. At last, the material
requirement planning assist in planning the production function, delivery schedule and
buying (Jacoby, 2010).v) Fixed order quantity method: This the method that permit Highway England to order an
item for particular amount. Order is always placed on the basis of quantity determined;
hence no additional orders are placed by the company. It is also linked to the automatic
recorder point where a specific quantity of product is ordered when stock on hand reaches to
a predetermined level ( Viswanadham, 2011). Therefore, it can be stated that fixed order
quantity system is the method in which the stock level is constantly monitored and specific
quantity of raw material is ordered when inventory on hand reaches a predetermined level.
It is important method that save company from unnecessary outlay that will block the funds
that could be used in other areas. Overall, this approach is beneficial for preventing the
reorder mistakes by company and thus help in improving the profit margin (Ross, 2013).
For Fair engagement of suppliers
Supply relationship management: It is effective approach through which company strategically
plan for managing all the conversation with the suppliers of different products and services so as to
enhance the worth of those interaction. It is important method that enable in strengthening the terms
with suppliers so as to maintain their interest with business. The consideration of Supply
relationship management is to build two-way, mutually advantageous relationship with strategic
supply partners to render high level of creativity and competitive benefits than could be attained by
functioning individually (Leeman, 2010). Furthermore, it can be stated that supplier relationship
management renders comprehensive method to evaluate and streamline the procedure between a
company and its suppliers to increase their effectiveness. Thereafter, SRM not only permits the
employment of innovative methods of increasing engagement with main suppliers bu also removes
the current policies and practices that can obstruct collaboration and restrict the prospective values
that can be attained from supplier relationship management. In order to facilitate supplier
relationship management Highway England can develop a formal team that use their soft skills to
develop healthy terms with suppliers (Chandrasekaran and Raghuram, 2014). Therefore, it will
assure proper communication of information, listening the issues and ideas of suppliers etc. The
supplier relationship can also be improved by assuring their effective involvement in business
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decision making. Therefore, suppliers can be encouraged to give their innovative ideas that can be
considered by company for developing new products and services that match the needs of customer
in best manner (Monczka and et. al., 2011).
Supplier engagement: It is important function that help in increasing the participation level of
suppliers. With this aspect, Highway England will be able to get crucial advantages from its
suppliers. Therefore, it means accessibility to best individuals of suppliers, technical advancement
available to provider, creative thinking and market knowledge of supplier etc. with effective
supplier engagement, company can share risk with suppliers (Kersten, 2011). In addition to this, it
facilitate precedence in distribution of resources during scarcity. Further, regular feedback can be
obtained from suppliers which will help Highway England in making changes in future products
and services. There are ample number of benefits of supplier engagement. First and foremost, it
leads to higher quality of offerings. It means reduction in wastage of resources so as to increase the
profit margin and productivity (Tang, 2011). Thereafter, supplier engagement help in better
planning withing Highway England. This is because it facilitate exchange of information among
company and supplier due which there is proper knowledge of future demand leading to better
scheduling. It further help in on time delivery to customers facilitating their higher satisfaction level
with the services of company.
Other than this, by effective communication with suppliers company can assure provider
have proper knowledge of demand of raw material so as to cut down the incidence of out of stock.
Thereafter, supplier engagement strategy also help in better product designing. In this respect by
using the market information provided by suppliers,company can use latest innovation and
technology to develop new offering as per the demand of customers (Tate, Ellram and Kirchoff,
2010). Also supplier help in best allocation of resources so as to enhance the productivity of
business. The supplier engagement is effective process by which methods to reduce transaction cost,
price per product and product development cost can be identified. Therefore, suppliers and
company can collectively determine ways of minimizing total cost of performing business.
2 DESCRIPTION AND CRITICAL ANALYSIS OF IDENTIFIED BUSINESS MODEL
From the aforementioned discussion, it has been identified that supply chain management
(SCM) is viable process of managing the flow of goods and services in the different marketplace as
per the customer's needs and demands. It also consider the motion and holding of raw materials,
work in progress inventory and supply of processed goods from one location of origin to the source
of consumption (Tayur, Ganeshan and Magazine, 2012). Since, its inception that Highway England
play important role in operating, maintaining and modifying the strategic road network of England
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which further have positive implication on economy of UK. The entity requires to develop
infrastructure which involve use of various raw materials etc. In this respect, various model are
discussed which will help in proper supply chain management (Testa and Iraldo, 2010). Further,
these theories and models will have different outcomes on the functioning of Highway England.
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Supply chain management provides an competitive advantage to an organization and also
to assist in the mitigation of the upcoming risk. This helps the organization to identify the issues
with related to the acquisition of raw material and delivery of the products. As per the case study,
Highway England deals in construction of roads (Wu and Pagell, 2011). However, the company
adopts the supply chain management which helps the company to reduce the raw material. In
context to this, the firm is able to analyse the effective allocation and utilization of the resources
with the help of the same. The construction of roads is the major responsibility which is
performed by the organization. However, the organization needs to adopt the appropriate steps of
this process This will remain beneficial for the organization in terms of management and
productivity (Chandrasekaran and Raghuram, 2014). For the stated organization there are certain
advantages of supply chain management which are stated below.
Quality assurance: It is found that the organization has relocated its operations in different
countries in order to cut the production cost. However, this can affect the quality of the products
of this stated company. However, this process assist this company to check the quality of the raw
material. The operations of this organization is related with the construction of the roads where
the quality is the most importance factors (Bearzotti, Salomone and Chiotti, 2012) This process
help the company to check its end products with the use of supply chain management. The stated
method consist of quality management system through which the management of quality and
checking is done.
Risk mitigation: This is the most important factor which must be considered by the management
of Highway England. With the adoption of this process the manager will be able to mitigate the
risk in respect to future. This concept helps the company to identify the critical risk related with
the analysis of product quality and compliances (Mehrjerdi, 2013). In addition to it, this process
assist in identifying the potential internal and external failure of the organization. Without the
implementation of supply chain management the firm will not be able expose its legal risk.
Shipping options: With the rise of e-commerce there is increase in the customers are seen. The
organization is diversified in different parts of the world. However, it needs to send and demand
the products with the help of shipping options. The adoption of supply chain management can
remain useful for the company to identify the ways of reducing cost at the most possible option
(Gambardella and McGahan, 2010)
In a business there is a situation comes when demand of a product is raised suddenly. In that
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situation, a company needs to have buffer inventory so that the needs of customers do not get
hampered. The adoption of supply chain management can assist the company to identify the pre-
determined needs of the customers. This will assist the organization to identify the current needs
of raw material. In addition to this, it will also help the company if they need extra raw material
for the project in an effective manner.
By focusing upon the Agile chain facility, the company will be able to respond to the
modification in demand and state in supply chain. An agile supply chain design will have
repetitiveness built into its processes, permitting it to promptly react to foreseen changes. The
Agile supply chain facility will be foremost to increase the service levels for accomplishing
customer demand, developing the customized products, and furnishing superior customer service
(Zachariassen, 2008). These functions will drive the supply chain to keep superior levels of
inventories to keep order consummation targets, favor on-time deliveries over cheaper
shipments, and facilitate quality inputs and personalized services over mass produced,
commoditized goods. These supply chains will have more flexible supplier contracts that help
them to alter order quantities, locations, require dates, and even call off the orders entirely if the
demand drop-off particular level. Suppliers will basically permit such flexibility for a cost. When
demand all of a sudden rises and the primary suppliers cannot cope with the increased demand,
an agile supply chain will go to a alternate set of suppliers that would have been constituted
beforehand for hold back supplies for such an happening (Viswanadham, 2013).
Furthermore, lean supply chain management is effective approach that help
manufacturing concerns to develop just what is require, in what quantity and time. The lean
management will help company in directing their efforts towards the reduction in wastage.
Therefore,company aims at improving their profit margin (Tate, Ellram and Kirchoff, 2010). In
addition to this aspect to assure reduction in wastage corporation increase engagement with
employee which in turn help in root out waste and reduce issues and make modifications. The
lean supply chain management will help Highway England in integrating upstream with
suppliers and customers. This enable in effective relationship with stakeholders. The concern of
lean supply chain is to reduce the inventory holding. The lean supply chain management also
facilitate built in quality by forbid mistakes prior to their occurrence The lean supply chain
management is important approach is effective method that enable standardization by
documenting best practice and making sure best practices is adopted (Tang, 2011).
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