FTSE Companies Supply Chain Management Report - BSCM7062 Spring 2019

This report examines the supply chain management of FTSE companies, with a specific focus on Marks & Spencer (M&S). It begins with an executive summary highlighting key issues faced by M&S, including the need for supply chain upgrades, poor risk management, strained supplier relationships, and an inability to meet evolving customer demands. The report delves into these contemporary problems and challenges, analyzing risk management failures, the impact of poor supplier relationships, and M&S's struggle to satisfy customer preferences. It then explores the need for supply chain improvements, evaluating M&S's operational deployment of supply chain strategies, including transportation, inventory management, resource scheduling, and data flow activities. The report also discusses the application of global supply chain management theories, particularly sustainability and risk management, and best practices such as collaborative planning, forecasting, and replenishment (CPFR). Finally, it concludes by summarizing the challenges and potential solutions for M&S's supply chain management, emphasizing the importance of efficient customer service and sustainability.

Running head: FTSE-COMPANIES SUPPLY CHAIN MANAGEMENT
FTSE-COMPANIES SUPPLYCHAIN MANAGEMENT
Name of student
Name of the University
Author Note

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Executive Summary
The aim of the study is to highlight the importance of supply chain management for the
success of the organizations. Marks & spencer which once was a famous retail company in
UK faced many issues relating to supply chain management such as – they needed to upgrade
their supply chain management, risk management was poor, poor relationship with the
suppliers and their inability to meet the changing needs of the organization. The company has
taken many steps in order to overcome these challenges such as they have upgraded their
logistics and others. There deployment activities for enhancing competitive advantages are
also given.

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Table of Contents
Introduction................................................................................................................................3
Contemporary problems and challenges faced by the M&S......................................................3
Risk management...................................................................................................................3
Poor relationship with supplier..............................................................................................4
Inability to meet the changing demands and preferences of the customers...........................5
Marks and Spencer’s need an up gradation of their supply chain..........................................5
Critical analysis of M&K’s operational deployment of supply chain strategy..........................9
Transportation......................................................................................................................10
Inventory/ warehousing........................................................................................................11
Resource rescheduling.........................................................................................................11
Data flow activities..............................................................................................................12
Conclusion................................................................................................................................12
References................................................................................................................................13

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Introduction
Supply chain management involves managing the flow of goods and services from a
point of origin to a point of consumption (Christopher 2016). SCM involves designing,
planning, monitoring and controlling the activities of supply chain creating a proper balance
between the demands and supply, for creating value, for creating robust logistics and creation
of competitive infrastructure. Supply chain management plays a very important role in
determining the profits of the organization (Monczka et al. 2015). Marks and spencer is a
multinational leader retailer company dealing in sales of luxury goods, clothes and home
products but its supply chain faces a few problems that is stopping the company from earning
higher sales in the market. It is also facing issues related to the logistics
(Marksandspencer.com. 2019). The aim of the study will highlight the problems faced by the
organization relating to its supply chain management, how the organization manages its
supply chain and a supply chain strategy of the organization that will help to provide efficient
customer service and sustainability.
Contemporary problems and challenges faced by the M&S
Risk management
Risk management involves identifying and evaluating the risk followed by proper use
of resources to reduce the chances of happening of any uncertain activity with those resources
(Brindley 2017). Risk management can be of different types such as financial risks, natural
disasters and others. It is a very important part of the supply chain management and
according risk the risk needs to be shared by all the partners according to their manufacturing
capacity but during recession Marks and spencer failed to share the risks of its suppliers (Fan
and Stevenson 2018). In fact, Mark and Spencer is one of those companies, which focuses on

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shifting the risks entirely on the suppliers and creating many problems for the suppliers
because they are ordering only that much as required. Instead of sharing the risks, the
company is increasing the problems for the suppliers. M&S is trying to create a thin line of
supply chain by reducing the inventory risks, improving the storage capabilities, by limiting
the complexity of the products and transferring the entire risks to the end of the chain that is
to the suppliers instead of equally distributing it throughout the chain.
Poor relationship with supplier
Relationship with the supplier is important for any organization because that will
determine the organizations capability to meet the changing needs of the customers (Toms
and Zhang 2016). The relationship between the suppliers and the organization determines the
availability of resources to the organization. However, the supplier relationship with the
company is not transparent because other organizations have separate department dealing
with the supply chain of the organization but Marks and Spencer is increasing the
competition among the suppliers because it has limited to the number of suppliers
(Hannington 2016). The company changes the suppliers so frequently that it becomes
difficult to maintain proper relationship with them. For example the company had entered
into an alliance with the British suppliers for acquiring the best quality goods from the
suppliers but the company suddenly changed its decisions and outsourced the supply function
globally. This act has resulted in lowering the cost of the products of Marks and spencer but
this hampered the relationship with other suppliers and has reduced the bargaining power of
the suppliers largely (Fernie and Grant 2015). The company is selecting it suppliers keeping
cost cutting in their minds, as a result of this the company is losing its brand image in front of
the past suppliers of the company. The company is asking for amendments in relationships
with the supplies for innovation activities. For this, the company needs to know its core
market first because the supplier’s contribution is common in the food and non-food areas but

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the suppliers increase their levy charge year after year and then if the company fails to pay
such higher charges a negative impact will be seen on the brand image of the company.
Inability to meet the changing demands and preferences of the customers
The most important part of the supply chain management are the customers. The
supply chain management starts and ends with the customers. Customers start the process by
placing an order and the supply chain management ends by meeting the customer needs
(Kuleva 2015). Marks and Spenser has not been able to recently meet the needs of its
customers because of poor clothing designs and improper fit of the costumes. The once most
loyal customers of the company that is women aged above fifty years have now become more
conscious towards fashion and their needs are not being met by the company due to more
number of middlemen in its supply chain (Goode 2018). The company is not being able to
meet the needs of the customers because they are unable to refresh their supplies. Other new
companies are having a direct control over their factories and are thus ale to replenish their
stores with newer designs faster to meet the changing needs of the customers. Marks and
spencer’s formers designer of ladies clothes said that the company has lost its newness, its
flair in good fashionable clothes (McLaren 2016). It is now providing poor fitting clothes and
old designs to its customers and that is why M&S fashion clothing is lagging behind as
compared to other retail businesses dealing in fashion clothes.
Marks and Spencer’s need an up gradation of their supply chain
Supply chain needs to efficient than only it can meet the customers need and improve
customer’s satisfaction. It can ensure a proper flow of goods between the company and the
end customers with minimum customers delay. It was reported that although the sales of the
company was continuously increasing but the capability of the company was lagging behind
many of its competitors due to lack of proper logistics (Lennox, Shields and Guilar 2016).

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Castle Donington, which is the supply center for the company lacked to provide proper
supply at the time of peak demands that, has also resulted in lower sales of the company
(Ahmed 2016). Castle Donington has seen reduction in the number of the products produced
due to lack of proper communication between the different departments. It was also reported
that most of the products was stocked up in the center due to problems with the distribution
system in the main peak season. The delivery to the stores from the facility was stopped due
to online orders being placed. A number of complaints were faced by the company during
Christmas because of delay in delivery to the customers who had placed online orders
because of the poor storage capacity of the center. Still many complaints are being placed by
the customers because the stock became unavailable after the orders were confirmed.
Mark & Spencer’s ability to manage its supply chain in the context of the
challenges it is facing
The global supply chain management is presently concerned about two main theories:
sustainability and risk management and three main practices – collaborative replenishment as
a result of demand planning, collaborative production and collaborative logistic planning.
Sustainability is the process of adapting to the changing environment such that the use of
resources, the technological development and other changes are all in harmony with each
other and these can meet the present as well as the future generation’s needs (Giannakis and
Papadopoulos 2016). Sustainability can also be defined through the interconnection between
the social, economic and environmental factors and that is dependent upon the systems
thinking approach. Systems thinking is means that all the factors can achieve more in a
system through synergy created by them (Arnold and Wade 2015). Organizations can become
sustainable if they can adapt to the technological, social and political changes and also by
improving their relation with the society in which they operate (Perry, Fernie and Woods

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2018). Risk management means the ability of the organization or the individual to reduce,
control and monitor the impacts of the risk by identifying them, evaluating them followed by
optimum use of resources. Risks can result from a number of elements such as financial risks,
natural disasters, accidents and others. Risk management includes the ability to reduce the
reduce by transferring it to someone else such as there are various risk management
organizations (Wiengarten et al. 2016). However, this shifting of risk should not be done in
such a way so as to harm someone else’s interest. The main practices of the global supply
chain management are collaborative planning of demand and replenishment, collaborative
production and collaborative logistics planning. Collaborative planning, forecasting and
replenishment (CPFR) in this technique instead of planning the patterns of demand
individually both the sellers and the buyers discuss all the information in advance such that
the operations can be properly carried out in a much realistic, informed way (Hill, Zhang and
Miller 2018). In this technique the retailer and the manufacturer has to coordinate with each
other to decide the demand promotional calendar for a particular future period of tie and then
convert it on real time basis. This focuses on creating one single team and working together
to achieve the goals. The collaborative production practices deals with the ability of
increasing the efficiency if the manufacturing process because of the supply chain driven by
orders placed by customers and to provide the same at low price (Jiang, Ding and Leng
2016). This requires good warehousing practices of the company, outsourcing production,
good supplier relations and others.

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Figure 1: practices of global supply chain
(Source: Kim, Banks and Shah 2017)
Mark & Spencer, once known for their supply chain management, are presently facing
many problems in its supply chain such as poor risk management, inability to meet the
changing needs of the customers due to poor collaborative logistics of the same (Bichou
2015). Its supply chain needs up gradation because they were not able to meet the demands of
the customers in the peak season that shows their inability for proper collaborative demand
forecasting and planning replenishments, and poor relationship with the supplier that shows
their inability to do collaborative production. The company is facing problems of risk
management because the company is trying to shift its risk entirely in the suppliers instead of
sharing the same with them. They are trying to create a thin line of supply chain by having
only selected suppliers for the supply chain. They are also having poor relationships with the
supplier which results in delay in providing goods and services to the customers (Rajesh and
Ravi 2015). If an organization has poor relationship with its suppliers they will not be able to
supply the goods and services as and when required by the customers and this will reduce the
customers satisfaction and they, any even switch brands (Sjoerdsma and van Weele 2015).
The company has decided to reduce the number of its suppliers to reduce the cost of its
products but that is negatively affecting its brand image. In order to overcome this problem

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the company is now aiming at improving its supplier relationship as the company wants to
create a supply chain dependent organization (Aina 2016). For this, they have started
collaborating with various suppliers in Kenya for providing sustainable water use. They are
now collaborating with Swedish suppliers to provide for proper packaging of their products
this shows that they are trying to improve their relations with supplies die to the problems
they are facing. For upgrading their supply chain management, the company has decided to
close their distribution channel at London (Mota et al. 2015). The company has decided to do
this because they want to open a new supply chain and the improve its logistics network the
company has also taken some initiatives. The company has decided to open a logistics Centre
for home ware and merchandised clothing in Hertfordshire. This new plan of the company
will create job for many people belonging community of that place. This approach is aimed at
providing better services to the customers and to make themselves available for the
customers. This will be dealt by a logistics supplier of third party. To deal with the fashion
clothing issues, the company has appointed ODD for making business clothing creative. The
company because of its past records in fashion industry had selected ODD and they have
worked with many brands (ODD. 2019). ODD has decided to make marks and spencer’s
clothing more inspirational, targeted and relevant. This step by the company shows that it is
making efforts to meet the changing needs of the customers.
Critical analysis of M&K’s operational deployment of supply chain
strategy
Competitive advantage and sustainability efforts are what makes an organization
different from its competitors (Thompson, Strickland and Gamble 2015). Competitive
advantage is the benefit that is available to an organization in comparison to its competitors.
There are three generic strategies that the company can adopt to gain a competitive advantage

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over others. These are focused strategy, cost leadership and differentiation strategy (Madsen
and Walker 2015). A company can gain competitive advantage using cost leadership if the
company can provide goods or services to its customers at a cost that is lower than the cost of
the goods provide by other companies. If the company can provide the same, quality goods to
the customers at a lower cost than the companies can gain competitive advantage (Herrera
2015). The company to focus on a particular segment of the market and serve only that
segment rather than serving the entire market at the same time can use a focused strategy.
This helps the company serve the needs of the targeted segment and create its brand
positioning among its customers belongings to that segment of the market. The last strategy
that can be used by the company to gain competitive advantage is that of differentiation. The
company should try to create a differentiation of its products from that of the customers. This
strategy involves using much research and development by the company to attain competitive
advantage over its competitors through innovation to its products and services. Sustainability
is the ability of the company to adapt to the environmental changes in order to be able to meet
the demands of the customers of the present and the future generations (Liu et al. 2015).
These changes can be- technological, political and economic. If an organization can adapt to
these changes in these factors then they can become sustainable. A company can become
sustainable if it is able to adapt to the technological changes in its environment such as using
different technologies to reduce the cost of the goods and services and others. Both
competitive advantage and sustainability can help an organization become successful and to
become better than the competitors. Marks and spencer, has taken up many initiatives to
overcome the problems of its supply chain that it is facing presently.
Transportation
Transportation is a very important part of the supply chain management (Christopher
2016). The delivery of goods to the customers on time is dependent upon the transportation

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and the transportation cost affects the cost of the products to great extent. Logistics is a
broader term because it includes both storage and transportation of goods from the supplier to
the customers. Marks & Spencer have faced many issues related to its logistics in the peak
season of Christmas. They were not being able to supply the goods to the customers on time
due to slow transportation activities and poor warehousing of goods. Marks & Spencer have
decided to improve logistics network by opening a center for distribution in Welham Green
and the Neasden distribution center operations are going to be transferred to marks &
spencer’s other network sites. The site will have clothing centers that are mechanized and the
third party suppliers of logistics will now be operating the Tesco site. The Welham site
distribution center will ensure that goods reach the customers at a fast rate and at lower cost.
The company is looking for building better operations at Hertfordshire because good
transportation facilities are available at the location of Welham.
Inventory/ warehousing
Marks and spencer have started an automated warehouse facility for meeting its
online demands in Castle Donington. This strategy is expected to handle 1 million orders in a
day. The company took this step because of the inefficiency of the present systems
(Zhalechian et al. 2016). It was reported that e-commerce has outgrown their business
infrastructure and the availability of goods online is not meeting the demands of the online
customers. The company has come up with a new option for the online customers that they
can order goods at night through the stores of the company and get delivery of the goods on
the next day. The new warehouse will reduce the time taken for delivery to the customers and
will help to increase the availability of the goods in the stores with the help of proper
warehousing facilities. The center at castle donington is presently able to handle only a few
orders in a day. The amount of the stock to be kept at hold by the company can be reduced
due to new warehouse setting and this will help to reduce the cost of goods to the customers.