Logistics and Supply Chain Management

This document provides insights into the important facets of supply chain management, including the main sub-systems, goals, strategic planning, global challenges, and the integration of environmentally sound choices. It covers topics such as production, raw materials, distribution, cost reduction, efficiency improvement, value chain optimization, customer experience, long-term and short-term strategies, globalization challenges, regional differences, understanding local consumers, industry dynamics, central control versus local management, and sustainable business practices.

Logistics and supply chain
management

Table of Contents
Question 1..........................................................................................................................1
Question 2..........................................................................................................................2
Question 3..........................................................................................................................3
Question 4..........................................................................................................................4
References.........................................................................................................................6

Question 1. Supply Chain Management is an important facet of most organizations.
a. Identify and briefly describe the three (3) of the main sub-systems in the supply chain. Are
these relevant for all organizations? Why?
Ans: The three main sub-systems that form the essential part of a main Supply chain
Management mechanism are –
1. Production – the production or manufacturing of goods and services from raw materials
to finished goods for consumption forms one of the sub-systems.
2. Raw Materials – the material required to formulate the final finished good, in the form of
input inventory forms another sub-system.
3. Distribution – another sub-system includes delivery cycle, mode of transport, methods of
transport planning, feedback collection etc.
These three sub-systems or sub-components are majorly applicable to all the organizations. In
business scenario, a product or goods exchange requires a basic raw material input from
suppliers, which are then produced as finished goods and distributed across various centers of
delivery. The supplier can be a third party or the company unit itself, but raw materials,
production and distribution forms the essentials of any business cycle. Therefore, these three
sub-systems are important for all organizations.
b. Identify four (4) goals for the supply chain. What priority order would you rank these in? Why?
Ans: Supply chain cycles are meant to deliver products or services from suppliers to consumers.
Therefore, this mechanism needs certain objectives or goals to achieve the outcomes. There
can be many associated goals with Supply chain management cycle, depending upon the
business requirement. Generally, the key objectives behind a good supply chain system are –
1. Reducing the cost – the objective to bring down the cost, in order to maximize
profitability and reduce the expenses is one of the primary requisites in any business.
2. Improving Efficiency through flexibility – the ability of business to maximize its
productivity and performance, through flexibility in production, is another important
objective in supply chain management.
3. Optimizing value chain through profitability – the stabilize the expenses, benefit all the
associated stakeholders in the supply cycle and to harness the maximum value is a
crucial part of supply chain management.
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4. Delivering better customer experience – the maintenance of customer relationship is
very essential in the strong competitive scenario in current time. Therefore, to deliver a
customer satisfactory experience, a good and timely supply chain model form an
essential part in supply chain management goals (Stevens & Johnson, 2016).
These goals are to be prioritized in the same manner as described above, from my point of
view. I believe that making a cost effective and profitable system holds priority to maintaining
customer relationship and flexible production mechanism. It is because, the minimal cost in
production and an optimized mechanism would both help save natural resource exploitation.
Question 2. Strategic planning is important to every business, and it is also
important to effective supply chain management.
a. Identify and describe three (3) aspects of SCM that need planning. Justify your
answer.
Ans: For an efficient and profitable supply chain system, there can be many
components that can be planned and organized for optimum utilization. Out of the
many, the three components essential to run a smoother supply chain cycle are-
1. Souring the suppliers, transporters and logistic handlers– To maintain a
continuous stream of products and services, it is very crucial to plan and
arrange the raw materials required to deliver the final product, along with
the required arrangement of transport. If the supply is insufficient or
improper, the product outcome would reflect the same.
2. Inventory management – Once the raw materials are inside the supply
chain system, it is important to organize the assembly or manufacturing
process, reducing wastage and generating maximum utility from the
resources. It is also important to store and maintain the warehouse to
prevent the products and services from degrading (Lambert & Enz, 2017).
3. Improvements and Innovation – Not only is the production optimization
important, but also, the improvement techniques in long-term business. If
the system upgrades and innovation is not given leverage for
improvement, they may disrupt the efficiency of overall production cycle
and may add to either high level of expenses in future or loss in
competitive advantage.
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b. Describe the purpose of a long-term strategy and a short-term strategy. Illustrate
with an example.
Ans: A long-term strategy requires the business decision making through creative
thinking approach. They enable an organization to measure performance in terms of
Key Performance Indicators. They also bring in systematic and required changes for
upscaling eth productivity and capability of functional performance.
A short-term strategy on the other had is an operational and tactical business
decision making and strategizing for utilization of available resources to optimal
use. Intended towards the immediate customer demand and day-to-day business
process requirement, the short-term strategy brings in relationship maintenance
with suppliers and customers.
For example – the decision of implementing an enterprise management system for
better business visibility is a long-haul strategic decision, but the smaller decisions
of offering discounted services on occasions like new year is a short-term customer
directed strategic decision.
Question 3. Globalization is becoming the norm. However, global supply chains
have many challenges.
a. Identify and describe three (3) global SCM challenges. Illustrate with an example.
Ans: Going global or taking business onto international markets is the new trend in
boosting business growth. The advantages that global businesses get are
numerous. But, along with many pros, comes the disadvantages and limitations.
Three challenges that surface while taking the business global are –
1. Regional differences – the cultural differences vary from region to region and
so does the market demand or selectiveness. These regional differences
must be identified and taken into consideration while launching the business
globally. For example, the supply of western clothing into South Asian
markets needs to be checked, specially in areas with Muslim communities in
dominance. The regional differences in UAE versus that in Australia are very
high.
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2. Understanding local consumers – the need to identify the local consumers is
of utmost importance in taking business globally. If a business produces or
sells a product that the common consumers do nit consent with, it may result
in exit of the company from the market (Wiengarten, et al., 2016). For
example, selling beef-based products in countries like India, forced
McDonalds to withdraw its products and localize its production to suit the
business needs in the country. Whereas in American culture, the beef-based
products are a high seller.
3. Industry dynamics – being aware of the competition and staying sustainable
is another crucial factor in talking the company global. The analysis of rise
and fall in government policies, the hold of consumers by market dominators
play essential role in establishing decisions for a new entrant (Ogulin, 2017).
For example, despite a strong organization, Walmart has been unable to set
its footprint in many South Asian nations.
b. What is meant by central control versus local management? Illustrate with
examples.
Ans: The term central control or centralization is the management of operations
through centralized management team, that takes decision on behalf of whole
organization. Later, the decisions are implemented in a top-down approach through
executives and management decision implementors. All the decision control is in
the hands of top management executives who takes the decisions.
Local management on the other hand is the reference to the decision-making power
given to local business unit management teams, that can decide their strategic
moves depending upon the market requirement of that area. This type of decision
making is the bottom-up decision making, where local management defines their
requirements, plans their strategy and implements them once higher management
agrees on it. Many small decisions are left in hands of decision makers in this
scenario.
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For example – Microsoft corporation is a centralized decision-making unit, where all
decisions lie with top management people. Whereas, Coca Cola has recently moved
from a centralized to a decentralized structure.
Question 4. Environmentally sound choices are increasingly required to be
integrated into supply-chain management.
a. Explain the rationale behind this statement.
Ans: Supply Chain management systems are composed of various components that
range from raw materials that are taken from the available natural resources,
production systems, that are formed using natural components and distribution
methods, that require natural elements to operate. With the rise in demand and
strong competition in market and a large variety of alternative choices, the
organizations exploit the natural resources for making a good fortune. This
ultimately is leading to environmental destruction and excessive usage of limited
natural elements.
The managed and sustainable environment usage can not only help save
environment, but also reduce manufacturing and production costs, benefitting
businesses indirectly. The cost of new production in many cases is very high as
compared to recycling components, the usage of renewable form of energy is very
inexpensive as compared to limited and exhausting fossil fuel (Fahimnia, et al.,
2015).
Therefore, it is not only sound, but also efficient to consider environment friendly
alternatives in business processes.
b. How can a business understand how well they are performing on sustainability?
Ans: The best measure of sustainable business performance comes from a third
eye-view that measures and analysis the performance with close observation. A
company can choose to measure the performance by internal as well as external
analysis of certain attributes. These attributes present a clear picture of
performance.
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1. Internal Analysis – the methods of measurement that indicate the levels in
resource consumption rates, carbon footprint analysis, natural resource
quality measurement of areas of business operation often are good
indicatives of sustainable performance measurement.
2. External Analysis – the observations from an outer world is a very efficient
method of performance analysis in terms of sustainable business practices.
The measurement from received consumer complaints, resource complaints
for human rights and child labor are good methods.
Apart from these analysis techniques, a true measurement can be attained
using logical and mathematical analysis through techniques of Mass-Energy
balance and cost measurements of true and value components (Boström, et al.,
2015).
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References
Boström, M. et al., 2015. Sustainable and responsible supply chain governance: challenges and
opportunities. Journal of Cleaner Production, Volume 107, pp. 1-7.
Fahimnia, B., Sarkis, J. & Davarzani, H., 2015. Green supply chain management: A review and
bibliometric analysis. International Journal of Production Economics, Volume 162, pp. 101-114.
Lambert, D. & Enz, M., 2017. Issues in supply chain management: Progress and potential.
Industrial Marketing Management, Volume 62, pp. 1-16.
Ogulin, R., 2017. 1 Globalization and regionalization of supply chains. In: Gower handbook of
supply chain management. s.l.:Routledge, pp. 541-554.
Stevens, G. & Johnson, M., 2016. Integrating the supply chain… 25 years on. International
Journal of Physical Distribution & Logistics Management, 46(1), pp. 19-42.
Wiengarten, F., Humphreys, P., Gimenez, C. & McIvor, R., 2016. Risk, risk management
practices, and the success of supply chain integration. International Journal of Production
Economics, Volume 171, pp. 361-370.
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