Strategic Operation and Supply Chain Management Report: Analysis

This report provides a comprehensive overview of Mentzer's twelve drivers of supply chain management, crucial for achieving a competitive advantage. It begins by defining each driver, such as coordination of business functions, collaboration with partners, and managing flow cycles. The report highlights the importance of customer focus, demand management, information substitution, and aligning systems with procedures. Each driver is illustrated with suitable and unsuitable examples, providing practical context. Furthermore, the report discusses synergies within the supply chain and emphasizes the significance of strategic alignment over short-term tactics. The analysis incorporates insights from peer-reviewed journals, solidifying the concepts discussed. Ultimately, the report underscores the importance of strategic supply chain management in enhancing a firm's competitive position.

Strategic operation and supply chain
management
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Table of Contents
Introduction.................................................................................................................................................2
Mentzer’s proposed drivers of supply chain competitive advantage............................................................2
Supply chain strategies as sources of competitive advantage......................................................................8
Two supply chain strategies as sources of competitive advantage...........................................................8
Identification of the supply chain strategy as sources of competitive advantage.....................................8
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10
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Introduction
The paper provides a summary of Mentzer's twelve drivers of the supply chain management to
gain a competitive advantage for the firm (Islam Molla and Ha-Brookshire, 2015). The paper
summarises all the facts provided within these drivers and also provides a suitable example and
an unsuitable example based on the context. The paper finally discusses two peer-reviewed
journals and extracts substantiated topics to achieve competitive advantages from them
respectively
Mentzer’s proposed drivers of supply chain competitive advantage
Coordination of the traditional business functions across the company and supply chain
The collaboration between teams and resources in an organisation leads to business functions
which are traditional across the organisation as well as the supply chain. Decision making plays
an essential role in this collaboration. Slow decision making by the employers leads to
ineffective management of the supply chain (Porter and Heppelmann, 2015, pp.96-114). For
work coordination between individuals, the highest set of standards needs to be maintained as
these standards determine the productivity in the organisation. The methods and concepts of the
management must be apparent to the individuals for functional expertise. Well, the integrated
supply chain process is required for the seamless flow of services, information, finances, and
products (Neubert, Ouzrout and Bouras, 2018). Long term relationships could benefit the
organisation as long term gains with the increase in the complexity of the environment.
Unsuitable example – when Nike decided to launch its new shoe segment of self laced shoes the
product was an instant hit, but the company ran out of stocks soon enough because the company
didn't consult the suppliers before the product launch.
Suitable example – Apple conducts an organisational change by providing a buyer and logistics
manager as well as a merchandise manager to each supplier for smooth distribution of the Apple
products.
Collaboration with supply chain partners
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The procurement of the products and selling those products in a company are the two most basic
functions and important one. The most important role lies with the supplier who carries the
inventory within the supply chain. The stocking of the products in the form of the stock is called
displaying. Risk and finance are the two sides of the same coin (Soosay and Hyland, 2015,
pp.613-630). Cooperation or alliances between organisations are done because all the
functionalities can be solely done by a particular company and thus it needs help from the
outside organisation. The means to enhance the likelihood to achieve cooperation among the
companies should be based on good predictors of appropriate cooperative behaviours (Chen et
al., 2017, pp.73-87).
Suitable example – General Motors, an automobile company based in the US has stopped
outsourcing its services when the company found discontent among its customers.
Unsuitable example – Alibaba.com outsourced too many services to the US which caused the
company to lose its control over the core functions
Looking for synergies in the supply chain
To preserve the strategic vendors of the company and ensuring minimum to none disruption in
the consumer base are the most important guiding principles of any supply chain logistics
(Ciccullo et al., 2018, pp.2336-2350). The vital steps to achieving deal goals as well as
delivering the value committed to the shareholder's synergies within the company and function
of the supply chain logistics must be maintained. It is essential to assess the synergies across the
processes of the supply chain management and prioritise the implementation of synergy one the
sources of the values are identified (Fernandes et al., 2017, pp.53-67).
Suitable example – Tooton’s photography is a photo retailer based in Canada and is distributing
Kodak products since 1949 due to the positive synergy between the manufacturer and the
distributor. The company establishes a pricing structure which is fair to both sides.
Unsuitable example – Hero Honda was a motorcycle brand primarily based in India and Japan,
due to lack of synergy between the manufacturer and the distributor, the brand split in 2013 and
are now separate entities.
All customers are not similar
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Often customers do not see a company more than a supplier, and it is okay as long as it is
mutually agreed upon. However, customers with a strategic view of the company require special
attention. The customers are an asset to the company and help to shape the future of the business
(Stadtler, 2015, pp. 3-28). The company should also invest significantly to retain these
customers. Retaining customers increase profitability as well as predictability in the flow of the
business. High inflation and high unemployment and even customer discontent are some of the
strategic challenges in supply chain management (Sawik, 2015, pp.58-66).
Suitable example – Google recommends its executives to visit customers online or physically
and sought out feedback on the performance of the company to enhance the product qualities.
Unsuitable example – Apple lacks the initiative to acknowledge the everyday customer needs
and launches its product only in the premium segment which many customers can't afford and
this lead to significant discontent among the customers.
Identification and management of the flow cycles in the supply chain
The main components of the supply flow cycle are the supplier, manufacturer, distributor,
retailer, and consumer. Suppliers provide the raw material for the making of the product.
Manufacturers are responsible for creating the desired product from the raw materials
(MacCarthy et al., 2016, pp.1696-1718). Distributors are required to distribute the products to
physical retailers as well as online retailers. Retailers are responsible for procurement of the
product from the distributors and selling it to the customers. Lastly, consumers are the ones who
purchase the product from the retailers (Carter et al., 2015, pp.89-97). These five components are
the ones who are responsible for the smooth functioning of supply chain management.
Suitable example – Amazon has recently launched its drone delivery service in California, the
US intends to provide superfast services to the customers; from order placement to the
acknowledgment and shipping of the product, all the process takes place on the same day.
Unsuitable example – many online retailers take significant time in acknowledging the order
placed by the customer, which leads to customer dissatisfaction and discontent.
Demand management in the supply chain
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The management of the relationships between suppliers as well as the customers and strive
towards delivering the best value to the consumer should be at a nominal rate as compared to the
demand chain in its entirety (Nooraie and Parast, 2015, pp.192-200). Demand in the management
of the supply chain is considered with special regards to the customers. The supply chain of the
organisation is responsible for creating the best value in terms of customer's demand.
Management of demand is responsible for the creation of the supply chain and its markets of a
synchronized stream of requests (Pérez-Pérez et al., 2019, pp. 137-157). The traditional function
of marketing creates demand for several products.
Suitable example – Nike was planning to launch its self-lacing shoes segment and implementing
promotional plans but did not share it with its logistics partner, which created increased demand
for products and reduced inventory levels.
Suitable example – the Xiaomi Corporation based in China launches its promotional plan and
authorises its logistics partners while the product is in the development stage. This increases the
hype for the product and ensures massive revenue generation.
Substitution of information for assets
The ability to make tactical decisions swiftly is a crucial aspect of the management of the supply
chain which is founded on precise information (Srinivasan and Swink, 2015, pp.823-861). Each
supply chain has an information sequence that corresponds to the flow of manufactured goods.
Knowledge is fundamental for the proper functioning of the supply chain. Without information
being transmitted at the precise time to the exact place, there are no procurement orders, no
consignment messages, no disbursement, no synchronised promotion and transactions and also
the supply chain eventually shuts down (Lim, 2017, pp.806-816).
Suitable example – One Plus is a mobile phone company based in China. When the company
found that its product is missing required certifications, it recalled several phones and provided
quick replacements of the product.
Unsuitable example – companies like Apple lacks the initiative to provide quick replacements of
defective products and services which leads to customer discontent and is affecting the
reputation of the organisation in several communities.
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Systems are patterns to be laid over procedures
Supply chain design process must begin with the method and arrange the systems over the
procedure designed as well as always take the people who are involved into the account
(Hofmann, Schleper. and Blome, 2018, pp.115-141).
Suitable example – Microsoft involves its employees in every back-end process of the supply
chain and trains them when needed. This helps to increase the level of inventory in the company.
Unsuitable example - Coca Cola is a soft drink company and involves only a few people
including its CEO and COO in the product development and enters into confidentiality
agreements with the employees for no apparent reason.
Every product is not made equal
Some products are more important to customers while others are less important. Some products
are vital to the profitability as well as the future growth of the organisation as well as the supply
chain (Fahimnia. and Jabbarzadeh, 2016, pp.306-324). Some products prove to be unnecessary
which should be discontinued, and the company should ensure getting rid of such products.
Suitable example – Addidas is a footwear company, and it regularly analyses the market trends
and stocks up the inventory accordingly to increase profit generation.
Unsuitable example – In 2012 Microsoft launched its mobile phone segment and failed to create
buzz among the customers but continued producing more Microsoft mobiles until the department
crashed down in 2015 about severe loss.
Ease of conducting business should be implied
Many companies make it difficult and generally impossible to do business with while claiming to
exist only for customer satisfaction and alleging their sole focus to be creating customer-oriented
products. To maintain as well as grow the market share of the company, it should understand the
value of customers and anticipate the changes in those values. This will enable consumers to
acquire the value as well as purchase their products.
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Suitable example – Compuphile System is software services based in Canada. The company and
has an ISO9001 certification as of 2015 for its excellent and transparent services.
Unsuitable example – Coca Cola is a soft drink company and is justly criticised for not being
transparent about its production of the beverages to the customers and has suffered losses in
several markets.
Tactics should not overshadow strategies
Overshadowing of the long-standing strategies by only focusing on the interim tactics will impair
the revenue generation as well as competitive feasibility of the company and also to the supply
chain (Bogers, Hadar and Bilberg, 2016, pp.225-239 ) . Setting and achieving extensive goals is
as important as setting and completing the short term goals.
Suitable example – One Plus is a company which produces medium budgeted Smartphone with
advanced technologies to ensure the achievement of short term goals of addressing the customer
price point.
Unsuitable example – Samsung, on the other hand, had launched its recent device Note 9 with
the same configuration as the one plus but kept in the premium range. The company focuses
more intently to the long term goals and therefore has a slow market for the device.
Supply chain strategies and rewards structures should be well aligned
The measurement of performance is as important as the performance itself. Many organisations
do not measure their critical supply chain activities as well as their outcomes; this leads to them
having no rewarding structures which align with their strategies. To ensure alignment and focus
measures must be taken to link the supply chain plans to the approach of the organisation
(Ralston et al., 2015, pp.47-64). The lack of this system results in unknown interrelations
between the steps taken.
Suitable example – Apple regularly monitors its products and keeps the performance in check to
ensure the increased value of the products to the customers.
Unsuitable example – Microsoft launched its mobile device segment in 2012 and even after
suffering heavy losses kept the product in continuation due to its lack of initiative to monitor the
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performance of the products and services leading to customer discontent and eventual loss of
revenue.
Supply chain strategies as sources of competitive advantage
Two supply chain strategies as sources of competitive advantage
Collaboration with supply chain partners
When two or more independent companies work together towards planning and executing the
operations of the supply chain, it is referred to as a supply chain partnership or collaboration. The
collaboration can be of two types. First is when different organisations come together at varying
levels of production in the supply chain to share resources as well as responsibilities towards a
single product. Such as in making a Lamborghini car, the accessories are provided by BMW, and
the engine is provided by Volvo, rest of the parts are created by the company itself jointly to
make a final Lamborghini car. Another is when two or more organisations work at the same
stages of production to ease work management
Substitution of information of Assets
Two significant challenges currently limit the supply chain strategies are; firstly the lack of
vision within the supply chain management to utilise the potential of advanced technologies as
assets to the organisation and secondly, the deficiency in the process structure to evaluate as well
as utilise significant data opportunities from the technologies in the supply chain of the
organisation.
Identification of the supply chain strategy as sources of competitive advantage
Collaboration with suppliers
The criteria for choosing appropriate suppliers as well as firms to collaborate results in flexibility
in the supply chain network to provide a competitive advantage.
Suppliers play a vital role in the supply chain structure of the organisation. The relationship of
the suppliers with the organisations should be built on a firm establishment based on value. The
growth and the vision of the organisation heavily depend on the benefits offered by the suppliers
working towards a common goal. The supplier contributes heavily to providing competitive
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advantages against the competitors as well as offers useful cost saving and efficiency
achievement of the organisation. A company bases its supplier efficiency towards the flexibility
of the supplier to relax rules for the organisation and response towards unexpected demands to
accommodate customer satisfaction (Gunasekaran, Dubey and Singh, 2016). The role of the
supplier is also to provide high-quality raw materials to the manufacturers for them to convert it
into high-quality products, eventually leading to customer confidence and trust towards the
organisation.
Usage of Big Data analytics to enhance SCM
Big data analytics improves the decision-making activities in the supply chain by the use of a
quantitative approach and the data itself. Analytics performs two operations. First, it increases
the dataset for the examination beyond the routine internal data held by the supply chain
management (SCM) as well as the Enterprise Resources Planning (ERP). Second, it applies a
statistical process which is robust to both existing as well as new data sources. The insights
created by the application helps to improve the strategic options such as selection of the right
SCM and all the front-line operations (Wang et al., 2016, pp.98-110).
Utilising the Big Data analytics will help to increase the cost advantages to the organisational
operations. Tools like Hadoop identifies new sources of data which will help in immediate
analysing of the data as well as make decisions quickly based on them. It will also help the
organisation to gain knowledge about the current trends and even understand the market
conditions efficiently. Based on the data the supply chain of the company can optimise their
stock and increase the level of inventory thus providing an advantage against their competitors.
Conclusion
The paper considers the overall aim of the supply chain management is to create value for the
consumers as well as the competitive advantage to the organisation. Effective supply chain
management improves the profit generation of the firm in the market and helps to increase the
reputation of the company in the eyes of the customers. However, the paper also states that value
is not inherent to the products and services and it is considered coherent. The paper concludes by
discussing the selection of suitable suppliers and collaboration between ideological firms and
also pursues the use of Big Data analytics in gaining competitive advantage.
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References
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business models: Implications for supply chains in consumer goods
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Carter, C.R., Rogers, D.S., and Choi, T.Y., 2015. Toward the theory of the supply chain. Journal
of Supply Chain Management, 51(2), pp.89-97.
Chen, L., Zhao, X., Tang, O., Price, L., Zhang, S. and Zhu, W., 2017. Supply chain collaboration
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Production Economics, 194, pp.73-87.
Ciccullo, F., Pero, M., Caridi, M., Gosling, J. and Purvis, L., 2018. Integrating the environmental
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Hofmann, H., Schleper, M.C. and Blome, C., 2018. Conflict minerals and supply chain due
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Islam Molla, T. and Ha-Brookshire, J., 2015. Job Responsibilities of Textile and Apparel Supply
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Lim, M.K., Tseng, M.L., Tan, K.H. and Bui, T.D., 2017. Knowledge management in sustainable
supply chain management: Improving performance through an interpretive structural modelling
approach. Journal of cleaner production, 162, pp.806-816.
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