Strategic Supply Chain and Logistic Management : Assignment
Added on 2020-06-05
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STRATEGIC SUPPLY CHAIN AND LOGISTIC MANAGEMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Emphasize the strategic importance of supply chain management to the board of directorsof IKEA, highlighting 5 key areas in which the function can add value to the enterprise.....11.2 SCM strategies used to alter the organisation's competitive side, considering the externaland internal environment........................................................................................................3TASK 2............................................................................................................................................52.1 Procurement plan for the learning of goods or services within the enterprise.................5TASK 3............................................................................................................................................73.1 Risk assessment plan for the foreseeable challenges ......................................................73.2 Develop a plan B, in case if shipment does not go according to plan...........................113.3 Essential shipping documents that are required for headway of cargo at the port. .......11TASK 4..........................................................................................................................................124.1 Assess how information technology could assist integration of different parts of the supplychain.....................................................................................................................................124.2 How can inventory management approaches integrates with information technology..134.3 Evaluate how information technology has contributed to the supply chain management ofthe IKEA. .............................................................................................................................15CONCLUSION..............................................................................................................................15
INTRODUCTIONThe major business aim of an establishment is to balance its supply chain system.Supply chain management functions at three levels- strategic, tactical and operational. This studyfocuses on the strategic supply chain management (Arora and et.al, 2016). The strategies that aremade with respect to the supply chain governance should reflect the overall corporal strategythat entity is following. Logistic management is that part of supply chain management systemthat plans, implement and controls all the detailed about product supply. This study containsvarious SCM policies and their impact upon organisations. Also, challenges offered in the supplychain management along with risk assessment plans are there in this learning. Further, role ofinformation technology in integration and management of different supply chain parts ishighlighted and its contribution in supply chain management is evaluated. TASK 11.1 Emphasize the strategic importance of supply chain management to the board of directors ofIKEA, highlighting 5 key areas in which the function can add value to the enterprise.To emphasize the importance of supply chain management to the board of directors, theselected organisation is IKEA, which is retail industry dealing in ready-to-assemble furniture,kitchen appliances and home accessories. To maintain its financial status, IKEA has toimplement SCM system (Bourlakis and et.al, 2016). Supply chain management introducesnumerous benefits in a company, some of them are listed below-Segment customers based on service needs.Customise the supply chain management network. Listen and understand the market signals and help in demand and plan accordingly.Manage the sources of supply.A wide technology for supply-chain is created.Some major areas where supply chain management creates business value to the IKEA asfollows-Profitable growth: SCM enables perfect orders, product development and after salesservices contributing in profitable growth of organisation. It is the most importantstrategy that SCM holds, as the initial level developments are the most effective1
development. Also, it reduces purchasing cost, production money, etc. which enhancesthe profitability of the company. Further, it includes various measures where work andcost reductions can be done (Chang and et.al, 2016). By increasing inventory turns,managing receivables, minimising days of inventory supply and enhancing cash-to-cashcycle, cost and work can be reduced. Effective SCM involves strategies for them. Boost Customer Service: Effective SCM involves complete satisfaction to the customersby fulfilling their expectations with the product. The major steps required for customersatisfaction are right delivery time and after sale report. It also includes required numberof warehouses for easy accessing by the customers. Improve financial position: The supply chain management system improves theeconomical position of the entity by increasing profit leverages which control and reducethe costs associated with the supply. Also, they suppress the using of large fixed assets,which results in improved financial place of company. Further, a cash flow is alsomaintained by supply managers to speed up the services providing to the customers. Material Sourcing- Manufacturing companies always look for low-cost raw material fortheir product preparation (Christopher and et.al, 2016). SCM builds strategies whichcompares the price of raw materials from different sources, thus accounting in reductionin cost of manufacturing and increased profitability to the enterprise. Planning according to market demand: It is critically important for an establishment tostay updated with the current needs of customers. Sales and operations planning mustdistance the complete chain to observe advance cautionary signals of dynamic demand inordering pattern (Craighead and et.al, 2016). This approach leads to more accordantprediction and optimal resource allocation.Thus, from the above-mentioned factors it is clear that effective SCM system results inincreased business value of an entity. 1.2 SCM strategies used to alter the organisation's competitive side, considering the external andinternal environment.IKEA constituents a set of objectives which are to be achieved in order to attainorganisational growth. Both internal and external environment effects the supply chainmanagement of this entity, hence it is essential that objective associated with both the2
environment should be considered while designing and implementing those SCM strategies(Dubey and et.al, 2017).Internal environment- Internal environment varies from organisation to organisation. In contextto IKEA, strategic management has good control on those intrinsic factors. Depending upon thegoals of IKEA, supply policies are designed to achieve them. SCM strategies used to improvecompany's competitive edge are as follows- Adoption of demand driven planning based on real-time demand insights and shaping-Choice of customers varies widely and thus, planning of product should be made withaccomplishing the demand of every customer. In this the internal factor that involves iscustomer. Meeting up with customer's expectation will increase the sale of the product.Social factor is also involved in adoption of demand-driven planning. Also, Culture ofdifferent location plays a vital role in this strategy.Build an adaptive supply chain with rapid planning and integrated execution- ThisSupply chain strategy deals with the quick and proper planning and execution of product.Rapid planning will reduce the time consumption associated with the productdevelopment and hence, it will suppress the associated cost also. Communicationbetween and within the departments is essential in effective planning (Elgazzar and et.al,2016). Also, effective human resource management ca enhances the execution of productby making all the units working with integration. Optimize product designs for supply, manufacturing and sustainability in order toaccelerate profitable innovations- Innovation is crucial to being one step ahead of thecompetition. Technological factor of the organisation plays a vital role in designing ofprofitable innovations. Also, HRM should implement new technologies in company tooptimize product design.Aligning supply chain with business goals by connecting sales and operations planningwith corporate business planning- Although sales and operations deals with sales,manufacturing, distribution, et, still there are some spaces left such as finance; to fillthose spaces corporate business planning is linked with sales and operations to improvebusiness value of organisation (Formentini and Romano, 2016). Various economicfactors are involved in gaining this. These economic factors allow them to integrate andearn profits to the firm.3
Infix sustainability into supply chain operations- Strategies are made in such way thatthey embed sustainability into the operations of establishment. It is important fororganisations to possess sustainable growth. Ecological factors associated withsustainable development includes low emission of carbon footprint during packaging,minimized energy consumption, less waste with recycle-reuse-refurnish.Internal factors and their effect on organisational competitive edge:Human resource management: Human resource management brings the skills embeddedin an entity in form of human resource. The start of an effective company is initiated bythe HRM. It is HRM who recruit employees, provide them with training, develop them(Ghobadian and et.al, 2016). Thus, in order to establish the name; HRM department oforganisation should be strong. Communication: It is the most crucial internal factor used to improve organisation'scompetitive edge. Effective functioning of operational unit will be observed with the helpof good interaction. Communication enables a better understanding between supplymanagers and employees, supply mangers and customers which helps in proper deliveryof right product at right place on right time.Stakeholders: Stakeholders plays a vital role in organisational growth. Stakeholdermaybe employee, customer, government etc. It is significant for an organisation to meetthe expectations of stakeholders.Role of external environment in improving competitive edge of firm:Social: Socio-cultureconditions of the place where the organisation is existing plays an important role in deciding thetype of inventory they should involve in their list. The choice of customers varies widelydepending upon their culture.Technology: In this digital world, it is crucial to implement latest technologies andinnovations timely. It helps in accomplishing customers' need (Govindan and et.al,2016). And with the customers satisfaction, profitability is concerned.Ecological: Every organisation should enhance sustainable development. Various lawsare also present which firms need to follow.4
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