Logistics and Supply Chain Management: Case Study of Johnston of Elgin

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Question and answers on the case study of Johnston of Elgin
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LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Executive summary
Logistics indicate the mechanisms, which the companies and organizations undergo for
fulfilling the identified goals and objectives. This process starts from receiving the raw
materials to handing the finished product to the customers. Extraction of the raw materials is
the primary upstream activity, which initiates the logistic operations. Vertical integration is a
vital aspect in the logistic operations, which enhances the productivity. Assessment and
evaluations are necessary before conducting the downstream activities. This is in terms of
assessing the standards and quality of the produced product, before launching it for the clients
and the customers. This examination helps in detecting the amount of wastage, which needs
to be removed for achieving sustainable development. Herein lays the effectiveness of
efficient management techniques like frameworks, benchmarks and directives, which
possesses flexibility to bestow competitive advantage over companies like Johnston, Tesco
and textile industry of Scotland.

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LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Table of contents
1. Vertical integration.................................................................................................................3
2. Driving efficiencies and supply chain mechanism.................................................................4
3. Employing, upstream to downstream production and finishing processes............................6
4. Agile and lean logistics strategies..........................................................................................7
5. Sustainability..........................................................................................................................9
Conclusion................................................................................................................................11
Recommendations....................................................................................................................11
References................................................................................................................................12

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LOGISTICS AND SUPPLY CHAIN MANAGEMENT
1. Vertical integration
Vertical integration is the ownership of the supply chain of a company or
organization. The members of the supply chain work towards the fulfilment of a common
goal, which is, catering to the needs, demands and requirements of the clients and the
customers. Application of effective management techniques result in the assemblage of
different supply chains under one corporation(McCormack and Johnson, 2016). Vertical
integration assists the staffs to secure the market transactions. Non-compliance with the
competitive policies acts as obstacle in the market transactions. The method of vertical
integration is effective in terms of averting the instances of incomplete contracts, depriving
the buyers and sellers of quality goods and services.
There are three types of vertical integration: backward, forward and balance. The
backward vertical integration is also known as the upstream processes. Forward vertical
integration is the downstream operations. The balanced form of vertical integration involves
both the downstream and the upstream operations(Prajogo, Oke and Olhager,
2016).Backward vertical integration occurs when a company or organization exerts authority
over the subsidiary products. Forward vertical integration occurs when the companies and
organizations governs the transactions with the distributors and retailers.
According to the case study of Johnstons of Elgin, vertical integration is reflected in
the cotton mill, which is the only mill dealing with the process of receiving the raw materials
and sending the finished products to the desired location(Ralston et al., 2015). Mention can
be made of Richard Branson’s Virgin Records, where backward integration is practiced.
Virgin, through its financial assistance, safeguarded Branson from encountering the instances
of debt. Expansion in the fields of talent management and record production enhanced the
profit margin. Along with this, example can be cited of Vanderkooi, who, through his own