Supply Chain Management: Practices and Organizational Impact

This essay delves into the critical aspects of Global Supply Chain Management (GSCM) and its profound influence on organizational performance. It begins by defining supply chain management and the components of GSCM, including lean manufacturing, Enterprise Resource Planning (ERP), risk management, outsourcing, and environmental considerations. The essay critically examines lean manufacturing, discussing its principles, benefits, and applications, such as the Toyota Production System and Six Sigma. It then explores ERP, highlighting its role in integrating business activities and improving efficiency. The research also addresses risk management, outsourcing strategies, and the importance of supply chain sustainability, including environmental impact and corporate social responsibility. The essay also highlights how companies can improve their supply chain by incorporating environmental considerations into their business practices. The study also analyzes challenges and provides insights into how organizations can enhance their GSCM practices to achieve better performance and sustainability.

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Impact of Successful Global Supply Chain Management Practices on Overall Organization
Performance
Students Name
Students Affiliation

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Supply management is defined mainly as a system that includes all the
organization activities that include the flow, transformation of goods from their original raw
material form, all the way to the end consumer. This process also includes the flow of
information, which includes internal communication (business-to-business) and business to their
consumer this is a two-way flow of information and process (Moroz 2018,(7), pg.,535-537 ).
Global supply chain management has remained a very critical factor, some of the components
making up GSCM include lean manufacturing, ERP, risk management and outsourcing and
environmental supply chain(Dorozhkina 2017, pg., 96-101). This assignment aims to critically
examine the perspective of GSCM, with the risk and challenges faced within the organization.
The research also offers different techniques and methodologies used to solve issues that arise in
the supply chain
Lean manufacturing is one of the effective ways in cost reduction in the
manufacturing industry and enhances certain business operations.it can be defined as a method
that is used in the reduction of unwanted cost and reduces wastage during manufacturing system
in order to positively increase production (Dorozhkina 2017, pg., 96-101). Lean manufacturing is
critical to industries that deal with perishable goods example companies that deal with perishable
goods. There are four types of wastes;
1. Wasted resources
2. Waste life cycles
3. Wasted capacity (vehicles unused 90% of their life cycle)
4. Wasted embedded values

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Example of waste resources ASOS and H&M uses language packaging’s that entails specific
language of the target market. This has dramatically affected the company’s sales, which in turn
has reduced the opportunity of venturing into new markets and companies versatility.
Lean manufacturing can be best understood from Toyota production system which is known for
reducing its original Toyota seven waste to improve the overall customer value such as increased
inventory unnecessary movement of people or machinery, unnecessary transportation, defects
that may require efforts and cost for correction( Law 2018,36(3), pg.,341-352 ). The benefits of
lean manufacturing include a reduction in lead times, reduced operating cost, and improve
product quality. Toyota production system may help in reducing manufacturing cost by almost
22% through the positive use of resources. Similarly, six sigma may also be used as an effective
method of eliminating arising issues during the manufacturing process. Lean manufacturing
entails five principles that entail;
 Customer values are identified from their perspective; companies need
to understand customers need and values and strive in achieving them.
The cost value of a product is usually defined by the producer, but they
set by the customer. Reduction of waste and cost during the production
process ensures the company leaps maximum from the price paid by
the customers.
 Mapping of the value stream; this entails proper recording of
information and all the products that are required during the
production of a particular product. the value stream entails the
complete cycle of a product from its original raw material form to its
final disposable form ( Chang and Park 2008, 17(1),pg., 113-
130)Companies must strive to reduce wastes in every stage of
production; everything that does not add value to the product must be
eliminated.
 Creation of flow; companies must strive to eliminate all functional
barriers in order to increase and improve lead time; this ensures there
is smooth flow during the whole production process, flow ensures
there is the elimination of waste(Santos and Silva 2012,pg.,1-17). Lean

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manufacturing ensures there is reduced interruption during the
production process and increase harmony and integration of activities.
 Establishment of a pull system; this means that company should only
engage in producing new products only when there is demand for
them, lean manufacturing uses pull systems instead of the push system,
pull process entails use of manufacturing resource planning where
inventories are pre-planned and products are produced to fit this
specification, but sometimes this forecast is not collect. However, in a
pull system, nothing is produced unless there is a demand for them.
 Pursue perfection with involves a continuous process of improvement;
lean manufacturing is a continuous b process that continuously strives
to achieve perfection( Zahraee 2016.,7(2)., pg 136-148)., this entails
understanding the leading cause of a problem and correcting the
mistakes in order to eliminate waste throughout the production
process.

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(Fig1: lean manufacturing cycle; google)
Enterprise resource planning (ERP) entails a business management software
that is integrated into an organization to help in the collection, storage, management and
interpretation of data from its many business activities through integrated technology human
resource and positive services. ERP is simply a vehicle that integrates people, process, and
technology across a modern company (Kruge 2018, pg 12). For example a car company that
assembles car from acquiring spare parts from different supplies. ERP will not only help in the
acquisition and purchase of these spare parts, but it ensures the entire process runs smoothly
(Ngwenyama and Sullivan 2007, 2018 (1), pg., 1-11), when ERP is correctly deployed in the
automotive company is able to identify the parts in lot number, cost, material source, and other

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specifications. When a company integrates an ERP system is benefiting from, increased effective
interdepartmental communication, the employees can access information from both internal and
external sources, streamlined process across various departments.
Benefits of ERP in business include improved business insight, reduced
production cost, enhanced collaboration, improved efficiency, infrastructure efficiency, reduced
risk, and lower management and operational cost in the business(Muscatello and Chen 2008,
3(3),pg.,1-17 ). A case study has been brought forward to understand the working of ERP the
case is related to mark and Spencer whose 80 % of the workers related to them were found to
influence the development of the company positively, in order to reduce potential supply chain
risk the company implemented multi-channel retails, open new market and shifted sourcing
location. Through the implementation of this initiative in supply chain management (Agrawal
2014, 3(3),pg.,1-17 ), it makes it easy to upsurge the current role of the management by
motivating the members as an integral whole positively. M&S are faced with issues in their
inventory and supply chain that gradually reduced the progressive development. However, on the

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0ther hand organizations that implement ERP system faces the following challenges, highlight
(Fig;2 simplified looks of ERP; google)
Implementation cost, also the system be challenging to implement, after implantation the
Organization requires an overhaul change in management.
With the current volatile business environment, it is critical to have efficient
and effective day-to-day risk management in an organization and the people involved. Reliability
and feasibility of an organization are greatly affected by undersupply in chain management and
more risks involved (Dorozhkina 2017, pg., 96-101). Outsourcing of third-party logistics in the
supply chain is a common practice in GSCM; there are benefits that are involved in both
outsourcing and insourcing when well-implemented outsourcing reduces labor cost and risk-
transfer outweighs the limitation. Outsourcing and insourcing are widely strategies used in many

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organization and industries (Dorozhkina, 2017, pg., 96-101). Successful risk management during
the outsourcing process enables an organization to perform successfully outsourcing is a
quantifiable risk that cannot be compared to uncertainty example of a failed outsourcing is the
explosion of Samsung’s galaxy note7 battery this was as a result of irregularly sized batteries,
Amperex technology batteries were not affected, but the others were. This resulted in 96% of
phones being returned in the supply chain (Dorozhkina 2017, pg., 96-101). The failure cost
Samsung’s GSCM $5billion.The implementing the outsourcing supply chain the demand is
quickly meet, and consumers expectations are positively fulfilled, there is increased
collaboration with the third party, there is a definite increase in flexibility and reliability in the
business. Through proper planning and systemic approach, some issues in the supply chain can
be mitigated. Outsourcing is very critical when implemented it gives the organization a
competitive advantage and positive reliability.
(Fig3; risk management; google)

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One of the aspects of a business that mainly affects supply chain is supply
chain sustainability; it also affects positively network logistics in terms of environmental risks
and waste cost. There is an increased demand for integration environmental within the supply
chain that much help in resource management. The success of organization performance is
mainly affected by the external environment (Lee 2017, 54(8), pg., 1049-1058). Apart from
companies focusing on lean manufacturing and enterprise resource planning ERP, they should
also focus on the impact they leave apart from aiming for profitability, this has resulted in
heightened importance on corporate social responsibility. Global supply chains are increasingly
growing more complex as consumers increase their demand, the higher demand for products,
raw materials directly translate into increased environmental impact either positively or
negatively.
Each organization must remain focused on achieving corporate social
responsibilities, 90% of environmental impact mainly comes from the retail companies.
Corporate social responsibilities have greatly affected GSCM (Reimann and Ketchen
2011,53(2).,3-9 )., and more customers are willing to contribute more as long as they are
satisfied with the eco- friendly products being produced .some of the challenges that are faced in
the organization's performance includes transportation, practicing ethical practices like provision
of recycling services and production of recyclable products. H&M encourages customers to
return old and unused clothes in the store in exchange with vouchers (Ngwenyama and Sullivan
2007, 2018(1), pg., 1-11). Technology has much helped in reducing the environmental impact of
supply chain .by driving efficient supply and demand through proper planning to reduce
overproduction of products, introduction of transparency to ensure supplies use ethical sourcing
of their products(Dorozhkina, 2017,pg., 96-101 ), optimized routes that help in fossil fuel

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reduction (Liz 2014, 9 (26-930),pg., 4059-4060) there is consolidated shipment to utilize
containers and transportation fully and there is reduced wastage in the supply chain process.
The UN global compact implemented some principals that are connected with
the environmental principles in order to promote environmental responsibilities and
environmental technologies. This environmental policy cautions organizations from practicing
unethical practices in order to get a competitive advantage. Organizations should also encourage
their suppliers to use cost-efficient pollution prevention for cleaner productivity that helps the
organization in achieving sustainable developments (Chang and Park 2008, 17(1), Pg., 113-130)
When an organization works diligently with the suppliers they are able to identify sources of
environmental pollutions and define ways of controlling them. ARA model has significantly
helped in understanding the broad aspect of environmental supply chain effectively (Tachizawa
and Wong 2015, 51(3), pp, 18-32), this model helps in critically assessing issues and challenges
that occur in the supply chain. This process requires proper partnership in order to amend by
complying with the organization structures .three levels, beginner, improver and achiever helps
in considering all requisite factors that influence reliability and sustainability of supply chain,
Beginner Environmental impact improved and enhanced
in the supply chain process
The organization has put into place good rules
and regulations that manage the supply chain
process
Risk is reduced in the management system
when proper management systems are put into

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place
Improver There is continuous improvement in
environmental aspects where innovative
approaches are implemented and used.
Achiever Maximum results are attained when there is an
improved partnership, and proper techniques
are used, such as eco-labeling schemes and
proper management of the organization
schemes.
( Fig4; risk management stages;google)
Environmental impact of supply will continue to be a significant concern for supply chain, with
the rise of the consumer knowing how their products are manufactured from their law state to
their end product and distribution of these products (Cosmas 2016, 22(5).,pg339-356). A well-
implemented supply chain strategy will help the companies to promote the use of more reliable
and ethical supply chain that is good for everyone.
GSCM directly influences the success of an organization, delivery of the required and core
product s only possible through the supply chain, both physically and virtually, when supply
chain fails the organization is left with a dented image and its open to criticism through this the

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company loses its competitive advantage. Supply chain affects both the private and public
sectors, it is not possible to universally measure the success of an organization, and GSCM can
also be implemented in emergency response unit from the initial call made to the control center
to the final step taken in responding to the emergency. In order to maintain the competitive
advantage of a company, implementation of GSCM should be implemented, this includes
implementation of new technologies, implementation of processes and right strategies ensure the
company has an excellent competitive advantage.
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