Supply Chain Management Literature Review

This assignment requires a detailed literature review on the topic of supply chain management. Students are expected to analyze various scholarly sources, including books and academic journals, to understand core concepts, strategic approaches, and best practices in managing complex supply chains. The review should demonstrate critical thinking by synthesizing different perspectives and identifying key trends and challenges within the field.

Supply Chain Management

TABLE OF CONTENT
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
The importance of supply chain management for effective business function and factor to
achieve supply chain strategy.................................................................................................3
Assessing the need to maintain supplier relationship, and starting a supplier relation system in
organisation............................................................................................................................5
Factors considered in making strategy to improve supply chain...........................................6
The ways to improve supply chain of organisation with justification....................................8
TASK 2............................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

EXECUTIVE SUMMARY
Supply chain management plays the crucial role in an organization and includes a process
of transforming a raw material into finished product Arcadia Groups is the fashion company
which includes clothing, accessories, shoes with 8 individual brands, more than 2500 outlets in
UK and has the headquarter in London, UK. The present reports is about supply chain
management system of Arcadia. Present report dictates Importance of supply chain management
for the effective business function. Further, report will discuss about needs to maintain good
supplier relationship and importance of having supplier relation system in Arcadia Groups.
Report also mentioned the factors considered while making strategies to improve supply chain. A
presentation has been made which shows the importance and uses of logistics in supply chain.
The presentation evaluates different strategies and procedures of procurement in Arcadia Groups.
Different inventory control techniques like just in time, FIFO and LIFO and economic order
quantity are discussed in presentation.
Supply chain management is an important process for an organization. Supply chain network
follows a path started with purchasing of raw material to manufacturing and delivers the finished
goods in retail shops and completed with delivering of the final product at customers place. In
the above is about the Arcadia Groups Ltd. which is a fashion company with more than 2500
outlets in UK. Further, report will discuss the need and important of supply chain management
for Arcadia groups. Maintaining healthy relationship with supplier is very important for business
for smooth working of its supply chain. The present reports shows needs to maintain good
relations with a supplier. Present reports provides different ways from which Arcadia Groups can
maintain a good supplier relation system in company.
The reports concluded different factors to be concluded while making strategies to
improve supply chain like location and transportation decisions, product type of company,
inventory control methods and distribution strategies. Minimizing cost and maximizing revenue
is the objective of every organization. An effective supply chain will help in reducing cost of
inventory and meeting demand of customers at right time. The report mentioned various ways to
improve the supply chain of Arcadia Groups.
Present report enclosed with a presentation which included use of logistics management
in supply chain with examples. Logistic management is a short part of supply chain management
which started from purchasing raw material and ends with delivering ultimate products. There
1

are many factors which should be considered to improve the logistic and procurement by Arcadia
Groups. Various inventory control techniques which Arcadia should apply to minimize the
inventory cost. The report concluded different techniques or methods like just in time inventory
system, last in first out (LIFO) method, First in first out (FIFO) method.
.
2

INTRODUCTION
The report includes a critical discussion on supply chain management and its importance
for an organization. The report will discuss the supply chain system of Arcadia Groups a leading
fashion retail stores in U.K. Further, the importance and need for an effective supply chain
management will be discussed in the report. The report will help in understand the need for
maintaining supplier relation system. The report is enclosed with a presentation which gives a
clear understanding of different inventory control techniques.
TASK 1
The importance of supply chain management for effective business function and factor to
achieve supply chain strategy
The process of transforming a raw material into finished product is called supply chain
management It is a broad activity required to plan, control and execute a product from company
to different suppliers and distribution to the final customer in a most cost effective way possible.
Global market is expanding beyond the border which redefines the management of demand and
supply of goods and services (Ballou, 2017). Supply chain management is very important for
business organisation and essential for company's success and customer satisfaction. The
importance of effective supply chain management in organisation is given as below:
Improve customer services: Supply chain helps in receiving the correct product mix at a
right time to final customers. Late delivery or wrong delivery of a product can effect the brand
image of a company in market. Supply chain networks helps in smooth process of delivering the
right product at a right time. It helps in achieving customer’s satisfaction by maintaining correct
product at nearest retailer shop.
Reduce Operating Cost: Retailers shops depends on supply chain to quickly deliver
expensive products to avoid holding of inventories in stores for more than a specific period.
Effective supply chain management helps in reducing the production cost of company, as
manufacturers depends on the suppliers to reliable delivery of the materials to assemble the
plants of the products so that there would be no shortage of material for production (Spekman,
Kamauff Jr and Myhr, 2013). An effective supply chain helps the manufacturer and retailers as
they depends on an effective design of supply chain network to meet the customers services at
least possible cost.
3

Improve financial position: Company depends on the supply chain manager as he helps
in controlling and reducing supply chain costs. It leads to the increase in profit of the firm.
Effective supply chain network is an important function of a manager as it helps in reducing the
use of large fixed costs like warehouses, transportation vehicle etc. organisation can design a
proper network in such a way that the final goods can be delivered to retail shops at right time
which reduces the cost of holding products in warehouses. Supply chain manager speed up the
flow of product to the final consumer in cost effective manner that helps in increasing revenue
for organisation.
Integrating supply chain is close setting and coordinating within a supply chain. It is
made up of all the parties involved in fulfilling a purchase of raw material of product,
manufacturing process, transporting the completed item and supportive service (Park, Shin,
Chang and Park, 2011). There are several different levels in integrated supply chain. The factors
to develop an integrated supply chain strategies are:
Supply Chain Metrics: supply chain metrics may include measurements for
procurement, production, transportation and warehousing, material handling and customer
services. Organisation needs to consider the participants in supply chain in order to achieve their
collective goals. Hence metrics and incentives must be clearly defined, mutually agreed by all
participants and they should be accountable for each other’s performance measures (Christopher,
2016.). Detail metrics should be selected for monitoring key functions, processes and capabilities
throughout the chain. The detailed roll up should be designed to measure the performance of
each participants in supply chain contributes to overall performance.
(Source: Logistics & Materials Handling. 2018)
4

Assessing the need to maintain supplier relationship, and starting a supplier relation system in
organisation
The management of supplier relationship is the systematic approach of assessing
supplier’s contributions and influence on success, determining measures to maximize supplier's
performance. It helps to create positive supplier-buyer relationship and determine the activities to
engage in with each supplier. A good relationship with supplier is the key factor in supply chain
management of any business (Introduction to Logistics and Supply Chain Management, 2018).
The goal of supplier's relationship management is to streamline and improve processes between a
buyer and its suppliers. The fundamental steps of supplier relationship management is to evaluate
supplier's contributions, especially in light of their strategic importance to the success of the
business. In Arcadia Groups, suppliers plays a vital role in supply chain management of
products.
It is important to develop good relationship with suppliers to increase the reliability and
business of organisation both, when you sell products (Dyer, Cho and Cgu, 2015.). With the
growing of the retail business, Arcadia need to ensure of getting better rates, quick services, and
overall growth. The need for having good suppliers relationships are: Communicate frequently: communicating the suppliers only while making purchase will
not help to build relationship and understanding with suppliers. Poor relationship with
suppliers will create problem at a time of any emergency situations, and will delay in
procuring products from Arcadia's suppliers. For maintaining good relationship, it is
important to be constantly in touch with them. Communicating regularly will developed a
bonding that will make it easy for suppliers to fulfil the organization's need. Release payment on time: Mostly the relationship between supplier and company
hampers because of the conflicts in payment. Late payment or no payment creates a bad
impression of company. To improve supplier’s relationship, it is important to clear out
purchase payment in time. Be clear about return policy: Having a return policy will help to avoid confusions and
arguments with suppliers at the time of return. An organisation should be ensured that
suppliers are ready to accept the unsold goods, as it would kill the company's capital and
will affect business of organisation.
5

 Provide complementary gifts during occasion: To build a good relationship with the
suppliers, it is important not just giving payment on time but also giving something that is
valuable to them (Tan, Kannan and Handfield, 2018). Wishing on special occasion with
freebies or complementary products will helps to build healthy relationship. Track supplier’s performance: Using a purchase order management software will help to
manage the purchase order cycle from approval of purchase to delivery to suppliers. It
leads to coordinate with each suppliers from different location and can help to track their
performances anytime, anywhere which will helps to strengthen relationship with
suppliers.
 Train them time to time: once a company have good payment reputation, providing
order in proper format, company can ask them to have training about the organisation's
goals and objectives to the suppliers.
Arcadia Groups should start a supplier relation system which will help of addressing,
planning and managing all interaction with suppliers in order to, maximize the value of those
interactions. The relationships with its suppliers is becoming very important in context of the
organisation (Ronchi, 2018). Companies have generally reduced the number of suppliers they
buy from in order to long term relationship with suppliers.
Factors considered in making strategy to improve supply chain
Supply chain is an integral part of any organization, it is an activities to maximize
customer value and achieve a sustainable competitive advantage. Supply chain management also
deals with the movement and storing of materials needed to create a product, inventories
management, and keeping track of finished goods from where they are manufactured and where
they are selling (Simchi-Levi and et.al., 2017). The success of a business is inextricably linked to
the performance of a company'ssupply chain. It is important to make strategy for improving the
supply chain regularly, but there are many factors which needs to be considered for making
improvement strategy of supply chain. Some of these factors are: Location and transportation decisions: While making improvement strategy, it is
important to consider the geographical location of production plant, warehouses and
distribution centre of a supply chain. As these factor would impact the revenue, cost and
level of services. Customer location also plays a vital role in making improvement
strategy. Making cost-effective strategies for such factors are vital role of supply chain
6

manager. Fast distributing the products can be done by air shipment as it is fast but
expensive at a same time. Choice of location is key factor to consider as distribution
channel of supply network is based on this factor. Proper transportation is important as
holding large amount of inventories can affects inventory holding cost. Product type: The whole supply chain management is depends on the type of product of
an organisation. If any company producing a products which require sub-zero
temperature like ice creams or medicines throughout the whole supply chain process, the
management needs to designed such cold containers or it could cost the company of
damage of all products which affect the profit margin and loss of all operational cost of
these product (Mena, Van Hoek and Christopher, 2018). Hygiene can be the most
important criteria while designing the supply chain system. Production decision plays a
vital role in making strategy for supply chain as it is important to consider the type of
products, where it has to be produced, production schedule etc. Inventory Control: Inventories are important part of supply chain and exist as raw
materials, semi-finished and finished goods. Inventory exists in supply chain because of
the mismatch between demand and supply of the product. Proper inventories
management is very crucial as it determines the cost of production, hence the profitability
of organisation. Holding finished goods can cost company as it results capital blockage. Distribution Strategies: This factors deal with the relationship and connection between
suppliers and managers. It allows business to have a better idea of what it takes to shorten
delivery times, reduce goods decay and improves customer services. Formulating an
effective distribution network helps a business to achieve profitable growth, especially
about cost, revenue, asset utilization (Mangan, Lalwani and Lalwani, 2016). To optimize
the overall supply chain, it is important to focus on distribution channel of products and
make strategies considering the distribution channels. Supply chain integration: It involves to integrate all the information available in one
system effectively and efficiently track the progress. ERPs helps in integrates all the
suppliers, procurement manager and inventories into one system to control the overall
supply chain system for a particular organization.
 Monitor cash flows: It is a fundamental tool that various organisation is using to improve
supplier management. It is important to track payment terms and condition with several
7

groups within the supply chain. Companies must make strategies on hoe to pay the
suppliers and logistic companies, payment tools, and any expenses that get passed to
customers (McCormack and Johnson, 2016). Payment technologies in the context of
supplier management, refers to equipment used to pay vendor bills and shipment tracking
software.
These are the factors that Arcadia should considered before making strategies for
improvement in supply chain. The improvement strategies can includes the education about all
links in supply chains to the staffs. To understand the performance of companies with
competitors. The utilization of information to understand specific targets for supply chain,
communicates with all the links involves in supply chain so that there would be no scope of
confusion left. Improvement in supply chain is the ongoing process which push supply chain to
the level of excellence.
The ways to improve supply chain of organisation with justification
It is necessary to transform and improve supply chain management practices in a
company to produce great results .. Over a past few decades, there has been a growing interest in
using of methods for improving supply chain and performance of a company (Hugos, 2018).
Many companies have recognised importance of integrating the process of supply chain and as a
result, it has become a crucial part of business practises. There are many ways to improve the
strategy of supply chain management, two ways to improve supply chain strategies which can be
used in Arcadia Groups are evaluated as below:
Increased Transparency: Waste, mistakes and frauds are permanent supply chain
strategy problems that can be fixed with the right ERP system. Numerous organisations
recognise many potential benefits of Enterprise Resource Planning (ERP). A business needs to
interact with numerous suppliers and partners in order to obtain the raw materials and resources
needed to bring finished goods to market. ERP plays a vital role in combating inefficiency,
reducing waste and will be able to make workers to contribute better efforts in business
function. In supply chain management, transparency for the business is knowing everything at
any given time. Supply chain transparency helps companies in maintaining safety and quality
standards, minimizing risks and building consumer confidence. It is easy to make better business
decisions and strategies and meet purchase requirement with the help of improved visibility in
8

supply chain. The benefits of transparency in supply chain management helps companies to be
ensured about efficientthe process of supply chain.
Monitor vendor performance: Successful supply chain depends on smart work of supply
chain manager and the way they deal with customers, maintain relationship with supplier as well
as other contemporary issues. A smooth running supply chain system depends on outstanding
vendor’s performance. Vendor's performance should be monitored regularly and rated through
metrics available through ERP systems (Arunachalam, Kumar and Kawalek, 2018). Vendors are
the one who sell products to the customers. They are the one who represent company.
VendorsThey play a vital role in supply chain. Vendor can be a distributor or owner of a retail
shop who sells company's products company's garments in his shop. ArcadiaCompany can
monitor the vendors by setting key performance indicators. It Company can create a criteria for
vendors which help company to determine the vendor's performance according to itscompany’s
goals and strategies.
TASK 2
Enclosed in PPT
CONCLUSION
It can be included from above report that supply chain management and effective supply
chain network plays an significant role in a successful business. Arcadia Groups needs to apply
and implement strategies which helps in achieving good supplier relation system. The report
discussed various factors and ways for improving supply chain. The inventory control techniques
are discussed in above report which help the company to reduce inventory control cost.
9

REFERENCES
Books and Journals
Arunachalam, D., Kumar, N. and Kawalek, J. P., 2018. Understanding big data analytics
capabilities in supply chain management: Unravelling the issues, challenges and
implications for practice. Transportation Research Part E: Logistics and Transportation
Review .114. pp.416-436.
Ballou, R. H. 2017. Business logistics/supply chain management: planning, organizing, and
controlling the supply chain. Pearson Education India.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dyer, J. H., Cho, D. S. and Cgu, W., 2015. Strategic supplier segmentation: The next “best
practice” in supply chain management. California management review. 40(2).pp.57-77.
Hugos, M. H., 2018. Essentials of supply chain management. John Wiley & Sons.
Mangan, J., Lalwani, C. and Lalwani, C. L., 2016. Global logistics and supply chain
management. John Wiley & Sons.
McCormack, K. P. and Johnson, W. C., 2016. Supply chain networks and business process
orientation: advanced strategies and best practices. CRC Press.
Mena, C., Van Hoek, R. and Christopher, M., 2018. Leading procurement strategy: driving value
through the supply chain. Kogan Page Publishers.
Park, J., Shin, K., Chang, T.W. and Park, J., 2011. An integrative framework for supplier
relationship management. Industrial Management & Data Systems. 110(4). pp.495-515.
Ronchi, S., 2018. The Internet and the customer-supplier relationship. Routledge.
Simchi-Levi, D. and et.al., 2017. Designing and managing the supply chain: concepts, strategies
and case studies. Tata McGraw-Hill Education.
Spekman, R. E., Kamauff Jr, J. W. and Myhr, N., 2013. An empirical investigation into supply
chain management: a perspective on partnerships. Supply Chain Management: An
International Journal. 3(2).pp.53-67.
Tan, K. C., Kannan, V. R. and Handfield, R. B., 2018. Supply chain management: supplier
performance and firm performance. Journal of Supply Chain Management. 34(3). p.2.
Online
Introduction to Logistics and Supply Chain Management. 2018. Online]. Available through:
<https://www.mbacrystalball.com/blog/operations-management/logistics-scm/>
10

Logistics & Materials Handling. 2018. [Online]. Available through: <
http://www.aalhysterforklifts.com.au/index.php/about/blog-post/what_is_a_supply_chain_net
work>.
<https://www.mbacrystalball.com/blog/operations-management/logistics-scm/>
11