Supply Chain Management Report: Cruise International Analysis

This report provides a comprehensive analysis of supply chain management (SCM), focusing on its application within Cruise International. The paper begins with an introduction to SCM, defining its core components and significance in operations management. It then delves into the SCM concepts employed by Cruise International, including control, procurement, and logistics. The report outlines the five key decision areas within SCM—production, inventory, transportation, location, and information transfer—and their relevance to the service provider company. It further explores the benefits of partnering with suppliers, such as cost reduction, improved communication, and risk management, while also addressing the factors Cruise International should consider before forming partnerships, including trust, shared goals, and communication skills. The report also examines potential conflicts of interest within the procurement function, providing examples like gift acceptance and personal relationships, and discusses reporting procedures. The conclusion highlights the importance of SCM in enhancing operational efficiency and recommends outsourcing non-core functions to further optimize operations. The report is grounded in relevant theory and provides a case study analysis of Cruise International.

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Supply Chain Management
Students’ Name
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Introduction
Supply chain management is a significant role in the operations management of any
organization. The function involves management of the flow of various materials from the point
of origin to the point of consumption. SCM consists of multiple activities which involve
acquiring raw materials and turning them into finished products through production. In
manufacturing companies, supply chain management requires sourcing, assembling, and
transforming raw materials into finished products. The finished products produced stored in
warehouses, and finally, when an order comes, they are distributed to end consumers (Reilly et al
2018). This paper discusses different basics and essentials of SCM. The essay answers different
questions like the five decisions areas, and application of supply chain management in Cruise
international service Provider Company. It also outlines the benefits the company has gained
from partnering with suppliers and the factors it should consider before entering into partnership.
CII Supply chain management concepts
Cruise International is a Britain travel consumer magazine whose mission is serving its
customers demands. Cruise international aim at providing quality services to its guests and travel
agents, whether in the shipboard or show sides. Cruise international supply chain management is
made up of different parties who facilitate movement and flow of products to the consumption
points. CII supply chain network is made up of players such as manufacturers, wholesalers,
retailers, and consumers (Penco, et al, 2017). To meet these objectives, the company had to adopt
the mentioned concepts. These concepts are control, procurement, and logistics. SCM involves
coordination, management of all activities which are carried out in the flow of products in the
company. Procurement concept encompasses all activities involved in buying products and

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services from suppliers or sellers. Logistics is another SCM concept which includes
transportation, storage and warehousing, and inventory control of materials (MacCarthy et al,
2016).
SCM concept, when applied, starting with the coordination of its activities, purchasing the right
materials, and distributing them to end-users help achieve the mission statement. Cruise
international adopts this operations management concept in movement of raw materials, work-in-
progress, and finished products (Terwiesch et al 2019).
Five decision areas in Cruise International Inc.
The service provider company should use SCM in the following decision areas starting from
production to distribution. The five decision areas include manufacturing, inventory,
transportation, location, and information transfer (Stadtler, 2015).
a) Production
Production is a decision area where after raw materials are received, assembled, and transformed
into finished products. The company made a decision on the quantity and quality of products
they want to produce and also when to create them. After the verdict, Supply chain will ensure
that all raw materials required for production are available at the right time (Turker, 2018).
b) Inventory
In this area, the company has to make a decision about its optimal inventory levels and reorder
times. It has to determine the number of raw materials and finished products to have in store at a
certain point. Supply chain management will help counteract and minimize shortages, costs, and
uncertainties.

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c) Location
In this area, the company has to decide which place to store its finished, parts, and raw materials.
There are storage facilities thus a decision on where to store production and storage facilities, the
most cost-effective location and on whether to build new storage locations or hire a space, for
example in a warehouse.
d) Transportation
Cruise international company had to decide on how to distribute inventory from one location to
another. Also, a decision on which transportation mode is reliable,.cost -useful, and timely.
e) Information
Each supply chain process requires certain information; thus, a decision on which and volume of
data to give to inventory, production, location, and transportation area decided.
Application of SCM in service operations
From CII overview it is seen that SCM is applied to improve efficiency of service provision. The
company aims at providing right and quality services to guest and travelers through the use of
ships. The service supply chain is a network of several parties such as suppliers, resellers,
consumers, and other supportive institutions like banks. Cruise supply chain focus on managing
mechanical equipment’s, retail goods, food products, and entertainment facilities. To meet its
mission statement, the company have to apply SCM concepts and make proper decisions on
production, inventory, location, transportation, and information areas (Heizer et al, 2017).

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Benefits of a partnership with suppliers
The collaboration of suppliers and company strengthens relationship due to the mutual trust
between each other. Trust is significant in alliances. The partnership results in mutual benefits
such as share of practices, improved communication, continuous supply, the stability of the
supply chain, flexibility, and cost reduction (Stevens, and Johnson, 2016).
 Costs reduction -Partnership reduces the number of defects and time wastage in the
supply chain. With reduced errors, suppliers can reduce raw materials costs which is a
benefit to the CII. Partnering, therefore, helps CII, as well as the suppliers, stay
competitive.
 Improved communication - Collaboration enhances communication between the
company and suppliers. Improved communication reduces delays in the supply chain;
thus, the company does not suffer shortages.
 Fewer defects - Partnering reduces errors in the supply chain. The relationship formed
ensures that defective and substandard products not supplied. Fewer mistakes reduce
wastes and inferior value goods. Closer collaboration with suppliers ensures that goods
delivered at the right time; thus, no errors during production.
 Risk management - Partnering improves CII risk management process in the supply
chain. Risk management improves because suppliers can plan for the future. CII,
therefore, benefits from continuity supply.
 Improved stability within the supply chain by making sure the company does not
experience stock shortages.
 Flexibility - Partnering improved flexibility of the supply chain networks; therefore
partnering ensures that supply chain can meet peak and unpredicted demands.

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Some issues that CII should consider before entering into a partnership with suppliers are listed
below;
 Trust - Trust between partners is crucial; therefore, CII should make sure real trust exists
with suppliers. CII should make sure the supplier they are collaborating with doesn't lie
or steal. Should they ask themselves several questions such as can we trust them to meet
their obligations? And can they cope with changes?
 They have shared vision and goals. Before developing a partnership, CII should
consider whether the suppliers have the same views and goals as them. Partners should
have similar goals and visions. The partner should always respect and value your goals.
The suppliers, therefore, should be able to support CII ideas and sometimes make them
better (Michalski et al 2019).
 Good work ethic. Suppliers should be committed and hard-working as CII. CII should
consider whether the suppliers have a good work ethic and are always open to criticism.
Open criticism means that employee’s opinions should be reviewed and valued.
 Communication skills. Before developing a partnership is necessary to consider the
communication skills of suppliers. The partners should be able to share ideas and keep
each other updated. CII should consider if the suppliers can communicate and share ideas
with them (Dania et al 2018).
 Great networks. Consider whether suppliers are right partners by checking their rapport
with others like employees and employers. CII should partner with suppliers who are well
connected and have many business links.

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 Information transparency. Consider whether the company you want to partner with
have a mechanism of information exchange. Information transparency will build
confidence between the partners.
CII before developing partnership should consider the above issues. The company can then
decide to outsource its non-core activities. Partnership benefits CII by expanding its supply chain
networks. Partnering increase access to shared resources such as skills and expertise, and attracts
more customers as it gets access to new markets. Partnering also lowers CII costs and increases
revenue (Correa, 2017).
Purchasing function potential conflict of interests
Conflict of interest refers to the situation where an individual face with different competing
loyalties. Procurement function faced with the challenge of conflict of interests. Procurement
managers should follow procurement ethical concepts and principles such as loyalty, integrity,
fairness, transparency, and confidentiality and due diligence (Goebel et al 2018). Procurement
has rules and regulations which should strictly follow. Procurement officials, therefore, face
conflicts of interests as after been employed, they have to put the company’s interests before
their own. They should avoid any activity which can cause a conflict of interest. The fiduciary
relationship established is the leading cause of conflict of interests. Conflicts of interest depend
on the type of industry the company operates (Sartor, 2018).
 Gifts acceptance - While purchasing products, there is a possibility of been given gift and
therefore, one face the conflict of accepting the gift or not. CII company policy does
permit gifts one has to decline the award.

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 Family and personal relationships -Personal relationships can pose the potential of
conflict of interests, for example, during the selection of suppliers mostly if the supplier
is a family member. Conflicts arise because questions arise when a family member is
selected.
 Investments - People invest in different companies; thus, in purchasing function, conflicts
may arise if a company where you are an investor in is the selected supplier.
 Use of company resources - It is not ethical to use company resources for personal needs;
thus, a conflict of interest occurs of whether one should use the resources. To avoid this
conflict, procurement managers should use company resources for business-related
activities.
Conflicts of interest occur in the above- mentioned situations, and thus; those affected should
report the issue using procedures such as ethics hotline, self-reporting, and emails or an
anonymous internet. Just like other organizations, Cruise international Inc, also use such
methods (Morales-Contreras et al,. 2019).
 Self-reporting. Cruise international most prefer to use this technique. In this technique,
employees report any conflicting situations they are facing. Most employees are required
to inform their supervisors when they face such situations. In CII, employees are required
to write a form stating the potential conflict of interest.
 Ethics hotline. CII also use ethics hotline method. The hotlines enable an employee to
report fellow employees. The helpline is an excellent method of communicating
unethical practices by fellow employees as one needs to leave an anonymous report. All
unethical behaviors and practices can be reported using hotlines.

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 Internet/ email. A potential conflict of interest reported through the internet or emails.
Employees can report unethical practices by sending a mail to an email account. Conflict
of interest can also be reported using the ethics website of the company. Apart from
reporting other employees, CII also encourages its employees to report any potential
conflict of interest they face by sending a mail to their supervisors.
Conclusion
The most significant function in the operations management is the SCM. The function improves
efficiency of operations by managing flow of product within the organization and deliver to
consumers. Supply chain management is, therefore, the central function in any industry that is
manufacturing or service Provider Company. The supply chain network involves several parties
like manufacturers, wholesalers, retailers, and consumers.
The SCM concepts applied in CII operations are coordination, logistics, and procurement.
Procurement is a crucial function, faced by a potential conflict of interest situations such as
personal relationships, investment, receiving gifts, and consumption of company resources.
Partnering with suppliers offer several benefits such as cost reduction, shared ideas, improved
communication, increased networks, and operations efficiency (Liao et al, 2017).
Before entering into a partnership, CII should consider specific issues such as goals, information
transparency, trust, work ethic, and partner networks. Consideration of these factors will make
sure that CII has selected the best suppliers. Conflict of interests may arise in the purchasing
function in the supply chain of Cruise International Inc. CII use reporting procedures such as
self-reporting, ethics hotlines, and internet or emails (Pallis, and Vaggelas, 2019). Employees
can report fellow unethical employees by sending anonymous emails to supervisors email

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accounts or hotlines. Finally, I can recommend that Cruise international Inc. outsource non- core
functions from potential suppliers. Outsourcing will reduce operations costs and raise the
revenue level of the company.

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