Supply Chain2 Executive summary Global supply chain management remains an important factor that is supported by both internal and external business operational factors. These internal and external factors interplay to foster retail business success in performance, customer retention, and satisfaction of stakeholders along with the network. The paper explores the global supply chain management with a major focus on the retail business sector. Positive and negative characteristics associated with the supply chain management are critically analyzed in relations to retail business. Examples of retail business organizations that show these positive and negative supply chain management formspartoftheanalysis.Someofthegapsthatexistbetweentheevaluationand implementation of supply chain improvements are explored within the document. The gap between the organization and the interconnected supply chain network present a great challenge for implementing the supply chain improvements. Multi-factorial global supply chain issues that affect retail business within the global supply chain network form the third area that is presented within the paper. The solution to these supply chain issues enables improvement of the supply chain performance of a retail business. Examples of companies that have faced these global supply chain issues are discussed within the document. The paper concludes by recognizing the importance of supply chain management in business performance and profitability.
Supply Chain3 Table of Contents Introduction...............................................................................................................................................4 Retail supply chain management..............................................................................................................4 1.Attributes of retail supply chain management................................................................................5 1.1 Positive attributes associated with retail supply chain management................................................5 1.1.1 Technology implementation.......................................................................................................5 1.1.2 Planning and network design......................................................................................................5 Unilever company example.......................................................................................................................6 1.1.3 Flexible supply chain management.............................................................................................6 1.1.4 Innovative supply chain..............................................................................................................7 1.1.5 Sustainable supply chain.............................................................................................................7 Example of Coca Cola Company..............................................................................................................7 1.2 Negative attributes of retail supply chain management....................................................................8 1.2.1 Supply chain disruption..............................................................................................................8 1.2.2 Supply chain inefficiencies..........................................................................................................8 1.2.3 Unethical supply chain management..........................................................................................9 Nestle Company example..........................................................................................................................9 2.Evaluation and implementation of supply chain improvement......................................................9 2.1 Partnership gap.................................................................................................................................9 2.2 International regulations gap...........................................................................................................10 2.3 Limited global connections..............................................................................................................10 Nyetimber Wine retailer Example.........................................................................................................11 3.Global retail Supply chain management issues.............................................................................11 3.1 The quality level of goods and services...........................................................................................11 3.2 Finance and insurance.....................................................................................................................12 3.3 International regulations and standards..........................................................................................13 Dodd-Frank Decision example...............................................................................................................13 3.4 Cost control.....................................................................................................................................14 3.5 Sustainability...................................................................................................................................14 Colgate Company example.....................................................................................................................15 Conclusion................................................................................................................................................15 Reference..................................................................................................................................................16
Supply Chain4 Introduction Global supply chain management encompasses many factors that interplay leading to successful retail operations. A successful supply chain management requires consideration of many different factors that are interconnected that enable retention of customers and integrated players. These factors are either internal or external retail business factors. A good global supply chain management is viewed depending on various attributes that result in successful supply chain and business operations. There are also negative attributes of supply chain management within a retail business that is characterized by inefficiencies that prevent a business from makingprofit.Severalmultidimensionalglobalsupplychainissuescurrentlyaffectthe performance of the retail supply chain. Some of these issues include international regulations, sustainability, cost control, finance, and insurance and quality level of retail goods or services. The following paper explores the global supply chain management and various supply chain issues in the retail industry. Retail supply chain management A retail business supply chain consists of a wide multifactorial system that involves many international logistic companies. The global retail supply chain also consists of a number of retail business that competes based on its supply chain performance. The ability of a company to manage its supply chain enables the company to perform at the international level (Poluha 2016).
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Supply Chain5 1.Attributes of retail supply chain management There are some positive and negative attributes that are associated with retail supply chain management. These attributes give the quality of the supply chain management that enables the retail company to perform in the market through gaining competitive advantage, sustain customers and satisfy all stakeholders along with the supply chain network. 1.1 Positive attributes associated with retail supply chain management 1.1.1 Technology implementation Technology implementation is a positive attribute effective supply chain within a retail business. The effective supply chain is Technology plays an important role in the success of retail business especially on its supply chain management. A competitive business has its supply chain incorporated with current technologies that aid in monitoring, transaction, and movement of goods along with the supply chain network. Global supply chain in the era of globalization requires technologies that comply with international regulations and standards. The ability of the supply chain to integrate new and innovative technologies is attributes associated with the successful supply chain. One example of companies that have integrated technology into its supply chain network is IKEA that use beacons to direct customers to retail shops hence they are retained (Mallik, 2010). 1.1.2 Planning and network design
Supply Chain6 Planning and network design is another positive attribute of a successful supply chain in the global platform. Companies with good planning and network design of supply chain network ensure that customers, suppliers and company management are connected for effective supply of goods and services. For instance, an online retail company such as Amazon stores have form connection with customers and suppliers leading to the success of the company. A supply chain that has interaction and integration of various supply chain players result in a successful business (Bhatnagar, 2012). Unilever company example Unilever Company at the beginning of the year 2000 embarked on restructuring supply chain network to allow proper integration of players. The company focused on both internal and external factors that result in the success of the retail business. The company, therefore, redesigned its supply chain and key areas that the company focused on were technology, global procurement, supplier’s involvement, and supply chain, executives. The overall result is a well- planned supply chain network that has contributed to the success of the organization in the global retail business (Unilever, 2019). 1.1.3 Flexible supply chain management Flexibility is another attribute of a good supply chain management system that ensures the business has success retail operations within the global supply chain network. The global supply chain is currently interconnected between various players that require the effectiveness of the network. The flexibility is attributed to the ability of the supply chain to adapt to various changes in the global retail supply chain. In addition, the supply chain of a company that is flexible reflects the internal management of the supply chain. The flexibility of the supply chain
Supply Chain7 ensures that various negative factors such as climate are well taken care of to increase the success of the organization (Geissdoerfer, Morioka, de Carvalho & Evans, 2018). 1.1.4 Innovative supply chain Innovative supply chain allows changes that may result from technologies and other factors affecting the supply chain. An excellent competitive supply chain management is characterized by innovation that results in optimization of the supply chain network. For instance, the use of beacon to guide customers to nearby retail businesses is one example of innovative retail supply chain system (Misra, Kahn & Singh, 2010). 1.1.5 Sustainable supply chain The sustainable supply chain is an attribute of good supply chain management that incorporates various sustainable policies and management practices. Sustainability is supply chain issues that currently affect the supply chain management as many global players call for sustainability in companies within the supply chain network. Some companies within the global retail supply chain network have gone ahead to develop sustainable operation policies that reduce the negative impact of products on the environment (Khairul, Azmawani & Ho, 2012). Example of Coca Cola Company Coca Cola company is a company that has received attention for its excellent supply chain management that is characterized by sustainable practices. Coca Cola supply chain has integrated nearly all the supply chain players that shows greater efficiency. Most of the products that are used to manufacture Coca Cola products are sourced within the country where products
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Supply Chain8 are sold. This has ensured that the company maintains the quality of raw materials as well as products. In addition, the company has over the past years focused on sustainable technologies that enhance its retail presence (Coca-Cola Company, 2016). 1.2 Negative attributes of retail supply chain management There are some negative attributes of the global supply chain that affects the retail business globally. These attributes give the negative qualities of the supply chain management that retail business is involved in. 1.2.1 Supply chain disruption Firstly, supply chain disruption is negative attributes that are often seen in the retail business that affects many businesses globally. Supply chain disruption is normally caused by numerous factors that disrupt the normal flow of goods and services across the global supply chain. Disruption may result from internal and external factors that affect the movement of goods and services (Lam, 2018). 1.2.2 Supply chain inefficiencies Secondly, inefficiencies is another negative attribute of supply chain management that result in business loss and can be attributed to poor supply chain planning and network design. Lack of proper supply chain management is evidence through inefficiencies that make the business less successful. In addition, inefficient supply chain poorly integrates customer, retailer, and producers leading to loses instead of profit. The inefficient supply chain also results in
Supply Chain9 increased cost often attributed to increasing transaction costs leading to loses (Manuj, Esper & Stank, 2014). 1.2.3 Unethical supply chain management Unethical supply chain management is negative attributes of supply chain management that have been witnessed within the retail business. Dishonesty within the supply chain that often result from involving supply chain players with unethical behaviors result in company image destruction and reduced revenue. An unethical operation of some of the supply chain players that involves slave labors is negative characteristics of supply chain management (Wieland & Handfield, 2013). Nestle Company example Nestle company is an example of a retailer that was involved in unethical supply chain management that resulted in a tilted company image in the global retail business. This was after the company involved in the sourcing of seafood that was obtained from Thailand under slave labor. The company admitted to the unethical supply chain management and developed a plan to remove unethical players from Thailand fishing suppliers. In the overall result, the company accepted the unethical behavior and restored its image in the retail market hence improve the supply chain network (Nestle, 2019). 2.Evaluation and implementation of supply chain improvement The evaluation of the performance of the supply chain and the implementation of the supply chain improvements has a huge gap that affects the improvement of the global retail supply chain.
Supply Chain10 2.1 Partnership gap Firstly, partnership gap is one area that affects the implementation of the supply chain improvements as one retail business may evaluate the supply chain performance and fail to provides the solution for challenges due to lack of partnership. Many retail businesses normally evaluate their performance within the global supply chain yet implementing improvement require high stakeholder’s partnership. Partnership within the global business requires many factors to consider given various large organizations that are involved in international logistics. Improving the global supply chain require retail business despite the size to partner with these larger international logistic organizations (Hopp, 2011). 2.2 International regulations gap Secondly,internationalregulationsalsogivethegapbetweenevaluationand implementation of supply chain improvements. There are many international regulations that reduce the capability of one retailer to implement its supply chain improvement strategies that are obtained after evaluation. Implementation of supply chain improvements requires compliance of various international regulations that govern international trade. As firm carry out supply chain evaluation to improve on their operations, much attention is fixed on regulations that are multifactorial leading to many challenges. For instance, to raise the quality level of products that move along the supply chain of the retailer, firms have to complies with international regulations governing countries involved (Raue & Wieland, 2015). 2.3 Limited global connections
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Supply Chain11 Thirdly, the retail business has limited global connections that help in the implementation of the supply chain improvements. Evaluation of supply chain performance can be internal operations, implementation of these evaluation results requires connection to many international players in order to help implement these improvements. Many retail companies have tried to improve their supply chain performance yet the improvement can only occur internally because external factors are wide and interconnected (Todo, Matous & Inoue, 2016). Nyetimber Wine retailer Example Nyetimber a major wine retailer in England faced a challenge in 2012 due to changing weather that made the company to reduce wine production. The main reason was the lack of proper partnership within the global supply chain to source raw materials for wine making. As a result, the company decline in producing wine that year (Poluha, 2016). 3.Global retail Supply chain management issues There are many different multidimensional global supply chain issues that affect the retail industry.These issues affect the performance of various retail businesses within the global supply chain network. 3.1 The quality level of goods and services Determination and controlling of the quality of products that are supplied to many retailers across the world have been challenging. This is due to many factors that interplay within the international retail business.For instance, many manufacturers of retail products allow various quality level for the products they produce and supply. In addition, the quality level
Supply Chain12 depends on the quality standards that are set across the supply chain. Many products and services may have defect and the supply fails to recognize the defect of the low-quality status of goods supplied. Moreover, many retail products such as agricultural products or those goods that are produced from agricultural raw material may be polluted right from the field and this affects the quality of the final product (Wallenburg, Cahill, Knemeyer & Goldsby, 2011). Reducing the low-quality incidence or dealing the quality level issues requires many factors to be put in place. Firstly, setting high-quality standards within the retail organization as an internal objective is one way to ensure the success of organization especially in the supply chain. Secondly, total quality management as part of supply chain management within the retail industry and may involves various digital evaluations procedures that ensure that goods that are supplied meet certain quality conditions. Thirdly, setting high-quality policies that forms part of internal and external factors within the supply chain services to improves the quality level of retail goods. Company or country may decide to develop quality standards or quality policies that limit low-quality goods from being supplied into the country or the company leading to reduced low-quality goods (Kozlenkova et al., 2015). 3.2 Finance and insurance Finance and insurance is another global logistics issue that affects retail industries as safe and standards payment systems is normally a challenge. Transaction within the international supply chain is complicated and requires safe means of transaction that involves many factors. Obtaining correct insurance for retail goods that are being supplied is part of the issue as many insurance companies operate at the country level and finding companies for large international supply is essential. There are many different payment methods that are used within the
Supply Chain13 international market and the payment method has to be standard across the supply chain to ease payment (Christopher, 2010). In order to solve the payment or transaction issue, key supply chain players have to come together and agree on the means of payment. In addition, the means of payment must comply within international security standards that protect companies from any financial risks (Saban & Mawhinney, 2012). 3.3 International regulations and standards International regulations are an external factor that affects retail companies that forms part of the global supply chain. International regulations are another issue that affects the supply chain across the world. Different countries have different forms of regulations that affect the quality and standards of goods that are supplied. The compliance to the international quality and trade regulations holds key to the success of an organization. These international regulations affect retail goods at the point of entry into any country (McKinnon, 2012). Compliance to the regulations that guide the supply of goods within the international business environment is the key to solving the issues of regulations. Internal organizational systems should be structured to conform to its operations according to the regulations set to ensure that the company’s supply chain is not affected by the regulations. Some regulations such as quality regulations require retail companies to set a high-quality standard that will comply with international standards (Lam, 2018). Dodd-Frank Decision example Dodd-Frank Decision was regulatory law that audited supply chain of various jewelry retailers to trace the origin of golds and other minerals. The idea was to reduce the gold mined
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Supply Chain14 from the Democratic Republic of Congo under slave labor conditions. This was a regulation compliance supply chain issue that occurred in 2010. As a result of many retailers particularly in the US that deals in gold and other jewelry products were evaluated for the polluted supply chain. In addition, the regulation and compliance to international standards remain a global supply chain issues that seek the remove unethical players from the retail supply chain network (McKinnon, 2012). 3.4 Cost control The cost control issue is an external factor that affects the success of an organization within the global supply chain level. Cost control is a global supply chain issues that affect both product prices and cost of production or supply. Many factors interplay to affects the cost of goods and services within the international retail market. The rising cost of energy or fuels is the primary reasons for the rising cost of goods produced. Increasing labor rate and technologies make it difficult to control the cost of goods that are supplied within the international market. Regulating international cost control systems is the key to reducing the negative cost-related issues (Hines, 2014). 3.5 Sustainability Sustainability is another supply chain issues that currently affect retain business as international business players require a high level of sustainability within the supply chain. Withintheincreasinglyadverseeffectsofpollutionintheenvironment,countries,and organizations requires retail companies to employ the highest form of sustainability in the supply
Supply Chain15 chain. This also encompasses reducing products that pollute the environment within the supply chain network (Wieland, Handfield & Durach, 2016). Resolving the issue of sustainability within the global supply chain requires many factors to be put in place. Production of consumer goods should be in a way that incorporates sustainability at every step of production. Some retail materials that are less sustainable such as polythene papers need to be removed out of the supply chain network. Increasing quality standards in terms of sustainability are also important for reducing the negative sustainable issues within the supply chain network (Bowersox, Closs & Bixby, 2012). Colgate Company example Colgate Company is one of the global retailers that majorly deal in the various toothpaste products globally. The company that had inefficiencies undergone transformations to consider various supply chain issues such as sustainability and cost control to produce a sustainable supply chain network. In addition, procurement problems that affected its sale and this required redesigningsupplychainnetworktoremovetheseissues.Theeffectivesupplychain management that the company developed has helped the company to move from regional to global retail services (Colgate, 2014). Conclusion In conclusion, the supply chain management is essential for the success of a retail business,especiallyintheglobalbusinessplatform.Theglobalizationthatenables interconnectionofsupplychainplayershenceincreasenetworkingthatenablesefficient movement of retail products along with the supply chain network. Despite negative attributes
Supply Chain16 that result from poorly managed supply chain network, business with integrated internal and external success factors is profitable. In addition, several global supply chain issues affect the operation and the normal working of the supply chain. This is evident through various examples of current supply chain issues that affect the retail industry. Reference Bhatnagar,K(2012)Customer-OrientedGlobalSupplyChains:ConceptsforEffective Management.Hershey, Pennsylvania: Information Science Reference. pp.145–159. Bowersox, D., Closs, D. & Bixby, M. C. (2012)Supply Chain Logistics Management, McGraw- Hill Christopher, M. (2010)Logistics & Supply Chain Management: creating value-adding networks, PrenticeHall.Availableathttps://books.google.com/books? id=IQgWVahxO3UC&printsec=frontcover&hl=it&source=gbs_ge_summary_r&cad=0#v=onepa ge&q&f=false[accessed on May 2, 2019] Coca-ColaCompany(2016)ASustainableJourneyavailableat https://en.coca-colaarabia.com/our-company/a-sustainable-journey[accessed on May 2, 2019]
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Supply Chain18 Mallik, S. (2010)Customer Service in Supply Chain Management.In Hossein Bidgoil (ed.).The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management, vol 2 (1 ed.).Hoboken, New Jersey:John Wiley & Sons.p.104. Manuj, I., Esper, T.L. & Stank, T. P. (2014) Supply Chain Risk Management Approaches Under DifferentConditionsofRisk.JournalofBusinessLogistics.Vol.35,no.3,pp241–258. doi:10.1111/jbl.12051– via Wiley Online Library. McKinnon, A (2012)The role of government in promoting green logistics.London, UK: Kogan Page Limited. pp.347–364. Misra, V., Kahn, M.I. & Singh, U.K. (2010) Supply Chain Management Systems: Architecture, Design,andVision,NorthAmericanBusinessPress.Availableathttp://www.na- businesspress.com/jsis/misraweb.pdf[accessed on May 2, 2019] Nestlé(2019)Environmentalsustainability.Availableat https://www.nestle.com/randd/environmental-sustainability[accessed on May 2, 2019] Poluha, R.G. (2016)The Quintessence of Supply Chain Management: What You Really Need to Know to Manage Your Processes in Procurement, Manufacturing, Warehousing, and Logistics (Quintessence Series). First Edition. Springer Heidelberg New York Dordrecht London. Raue, J.S. & Wieland, A. (2015)The interplay of different types of governance in horizontal cooperations: a view on logistics service providers.The International Journal of Logistics Management,Vol.26,No.2.Availableat http://www.emeraldinsight.com/doi/pdfplus/10.1108/IJLM-08-2012-0083[accessed on May 2, 2019]
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