Strategic Supply Chain Management and Logistics Report - ATCO

This report delves into the multifaceted world of strategic supply chain management and logistics, focusing on the A.A. Turki Group (ATCO). It explores the importance of supply chain management in achieving organizational objectives, examining its links to various business functions and identifying key drivers for integrated supply chain strategies. The report investigates effective strategies for maintaining supplier relationships, the role of information technology in fostering these relationships, and the development of systems to support them. It also analyzes the impact of IT on integrating different parts of the supply chain, the role of logistics within supply chain management, and evaluates procurement practices. Furthermore, the report assesses factors crucial for improving logistics and procurement, along with strategies for enhancing the overall supply chain and the benefits such improvements bring to business performance, including the barriers that must be overcome during implementation. The analysis covers various aspects of supply chain management including customer service, cost reduction, and financial improvements within the context of the A.A. Turki Group.

Strategic Supply
Chain Management
and Logistics

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1.1 The importance of supply chain management in achieving organizational objectives...1
1.2 The link between supply chain management and business functions .............................2
1.3 The key drivers for achieving an integrated supply chain strategy in an organization....3
TASK 2 ..........................................................................................................................................3
2.1 The effectiveness of Strategies used by an organization to maintain supplier relationships.
................................................................................................................................................3
2.2 Information technology to create strategies to develop an organization’s relationship with
its suppliers.............................................................................................................................4
2.3 Develop systems to maintain an Organization’s relationship with it Suppliers...............5
TASK 3 ...........................................................................................................................................5
3.1 Information technology could assist integration of different parts of the supply chain of an
organization............................................................................................................................5
3.2 The Contribution of information technology and management of supply chain .............6
3.3The effectiveness of information technology in managing the supply chain of an
organization............................................................................................................................7
TASK 4............................................................................................................................................8
4.1 Role of logistic in supply chain management in organisation..........................................8
4.2 Evaluate procurement practices within an organisation...................................................9
4.3 Factors that must be consider when improving logistics and procurement in an
organisation............................................................................................................................9
TASK 5 .........................................................................................................................................10
5.1 Strategy to improve organisation supply chain .............................................................10
5.2 The benefits of supply chain improvement strategy on business performance in an
organisation..........................................................................................................................11
5.3 Barriers will be overcome in an organization through implementing a supply chain
improvement strategy...........................................................................................................11
CONCLUSIONS............................................................................................................................12

REFERENCES..............................................................................................................................13

INTRODUCTION
Supply chain management is very wide concept in commerce, it describes as the flow of
goods and services which involves movement related with storage of raw material, movement of
finished products and services form point of origin to consumption, movement of work in
progress inventory (Christopher, 2016). The term logistics is considered as combination of
various activities that are adopted by any organization or company, in which product
distribution, manufacturing and procurement are included. Supply chain refers as a system of
firms, information, data, people, resources and activities in order to moving s good or service
from final supplier to final customers. A.A. Turki Group is also known as ATCO, it is a
diversified business group and its headquarter is in Dammam in Soudi Arabia and active since in
the mid year of 1950s. The company is owned by Abdulrahman Ali Al- Turki, who is mainly
focused on expanding their business activities at very large scale. The whole company has
various joint ventures, stand-alone companies and different division. It conduct various kind of
different activities such as trading, retail, construction, tourism, chemical, IT service, material of
construction and many others. This report contains the study about importance of effective
supply chain management in attaining organisational selected goals and objectives. This report
also helps in evaluating the link among supply chain management and business function in a
business. Various key drivers which are integrated in achieving effective supply chain strategy
for well-being of business and its activities. The effectiveness of strategies which are applied by
a company in order to maintain their relationship with suppliers. Various things that are related
with information technology, logistic supply chain management, the role of logistics in supply
chain management will also be discussed in this report.
TASK 1
1.1 The importance of supply chain management in achieving organizational objectives
Supply chain management plays most essential role in every business organisation. It is
usually an important component to detailed efficiency. It is the most integral part of any business
organisation and plays most significant role in organisational growth and success. It is widely
used by organisations in order to achieving their cited goals and objectives. Every business firm
is mainly focused on fulfilling the requirements of customers for gaining more profit and success
1

(Ross, 2013). There are some importance of supply chain management which are describes as
under:
Boost Customer service: Customers are the important element of market place, they expect for
high quality goods and services as per their own requirements, their major expectation is to get
right quantity of product with high quality aspects. Consumers expect goods to be available at
the selected right place. It is required for company to provide after sales services to their
customers in order to sustain them for long time.
Reducing operating cost: Operating cost plays effective role in any kind of business
organisation. It can be considered as the major expenses of firm which are needs to be controlled
for attaining selected goals and objectives. It helps in decreasing purchasing cost, production cost
and total supply chain cost in terms of saving extra expenses of company.
Improving financial position: Finance are the essential source of company because all activities
of firm are depend on these sources. Effective supply chain management helps in increasing the
profit leverage of company through control and reduce the cost of supply chain. Supply chain
also provide support in decreases fixed assets, in this supply chain manager is focused on
reducing the total usage of assets like plants, vehicles transportation and warehousing.
Effective implementation of supply chain helps in effectively utilisation of above mentions
components in most significant manner. These elements are helpful in achieving organisational
goals and objectives in effective manner.
1.2 The link between supply chain management and business functions
Supply chain management is a wide concept of management in business organisation. It
can be considered as the information, material and finances of firm, it works in the process of
suppliers, manufacturer to wholesaler to retailers to final customers (Jacobs, Chase and Lummus,
2011). The supply chain mainly covers various elements that are related with whole physical
process from acquiring the raw materials and all process that are engaged in the process until
finished goods ans services reaches to the final and end consumers. As per their business type
every company follow supply chain management system in order to satisfying final needs and
wants of customers. The basic purpose of organisation is to provide best to best services to their
potential buyers in very less period of time for fulfilling their basic and general needs. Supply
chain management is combination of various organisational activities which are essential for
growth and success of firm in which various activities such as effective control system,
2

procurement strategy and improvement or development in different expertise things. It is
required for company to establish an effective supply chain management in system in order to
managing all business activities so that firm can actively achieve organisational aims and
objectives. A.A. Turki Groups use most effective supply chain management system because,
company deals in various different ventures, so in order to gaining sustainable growth and profit,
firm needs to manage their business activities.
1.3 The key drivers for achieving an integrated supply chain strategy in an organization.
Supply chain is the essential component of business organisation, as large number of
firms are vastly using effective supply chain management system in order to compete with
competitors and gain market share (Monczka and et. al., 2015). Mostly companies are focused on
adopting most appropriate strategies for improving their performance at market place, so that
they can earn large amount of profit and revenue in respect of providing huge range of
competitive advantage at market place. There are so many key driver activities are available that
are helpful in integrated supply chain strategy in a business organisation. Some are describes as
under:
Demand planning: Every business organisation are focused in identifying the actual demand
and needs of customers in order to providing satisfactory services to their potential customers. It
is required for firm to plan how to measure the present demand of customers which are most
effective at market place. The basic aim of firm is to provide high quality gods and services as
per their own different demands for matting organisational goals and objectives.
Increased price pressure and competition: At the market place there is lots of competition
available for a single product, so companies are concerned on adopting various pricing policies
for attracting large number of customers towards their brand and offered products. As a big
consultancy A.A. Turki use different pricing strategies for gaining attention of people who are
willing to taking advantage of offered services of firm, these policies are helps in increasing
competitive advantage at market place.
TASK 2
2.1 The effectiveness of Strategies used by an organization to maintain supplier relationships.
It is essential for company to establish good and friendly relationship with their
customers, distributors and suppliers in respect of maintaining a good position at market place.
3

Efficient management of suppliers is the essential way for operation and manufacturing
industries can improve their organisational performance. There are various significant elements
of suppliers management, they adopt different strategies for satisfying the actual needs of
market. Suppliers plays are the key aspect among manufacture and customers, they use different
strategies for improving their performance and attain competitive advantage at market place.
Suppliers are having direct connection with customers,so they are able to identifying the actual
needs and wants of customers in effective manner, so it is required for manufacturing firm to
establish an effective and good relationship with their suppliers (Tayur, Ganeshan and Magazine,
2012). The basic aim of A.A. Turki Group is to expand their business activities in various other
sectors for this they adopt innovative strategies that are helpful in achieving organisational goals
and objectives. In the area of supply chain management manufacturing organisations faces
various implications as they are focused on developing their production and for this higher
authority and manager has to take effective decision and accept the best strategy for maintain
effective relationship with suppliers.
2.2 Information technology to create strategies to develop an organization’s relationship with its
suppliers.
Small as well as big business organisations are focused on establishing good and friendly
relationship with their suppliers for improving their performance of supplying wide range of
goods and services to their potential buyers. Information technology plays most essential role in
business organisation through creating various effective strategies to develop significant
relationship with its suppliers. As per the different theories that are related with suppliers are
their relationship with manufacture the firm should optimally increases the number of suppliers
through which they do business and conduct its activities, in this search cost and other
coordination costs are decline. There are some technologies which are used by firm to develop
their relationship with suppliers, which are describes as follows:
 Identify real time information that are related with new market trend and sales.
 Analyse and respond on various changes that are arises on the basis of changing in
demand.
 Establish Electronic collaboration with suppliers through using various elements such as
E-mail and providing out spreadsheets which are available in simple form.
4

 Forecasting the systems and inventory planning through apply their records of inventory
and anticipate the demand of market for their goods.
 Online analytical processing system helps in analysing the history of overall performance
that are related with sales and measure the prediction through various suppliers.
2.3 Develop systems to maintain an Organization’s relationship with it Suppliers.
In today's market scenario modification are required for every business organisation and
they needs to develop their system as per the changes arises in new tools and technologies. It is
very essential to maintain the relationship with suppliers for growth and success of firm, some
are describes as under:
 Organisations are using various strategies to establish an effective relationship with their
suppliers. They are focused on knowing their development and expansion plans. Changes
and up gradation impacted on offered goods and services of firm (Stadtler, 2015).
 Firms are concerned on creating the better understanding on how the activities which are
performed by suppliers can enhance their performance and can provide benefits to
business and its activities.
 Organisations needs to clear about their orders, excellent time and deadline of products
and services. So for this company use various strategies to developing their performance
and providing high range of goods and services on time.
 Firms are concerned on creating their business and its activities much important to their
significant suppliers with a view that, they work hard for improving performance of
organisation, so some suppliers are affected with that and offer various deals if firm
ensure to apply them wholly.
As a big organisation in Soudi Arab A.A. Turki Group focused on implementing various new
and effective changes in their business so that they can improve their performance in each type
of venture in which they are working.
TASK 3
3.1 Information technology could assist integration of different parts of the supply chain of an
organization
Information technologies plays important part in business firm through providing proper
and relevant information form one source to another. In modern scenario firms are not
5

considered as an individual entities, but in the part of multi venture organisation, supply chain
helps in delivering the finished goods and services to their final customers who are requesting for
any kind of product or service. Information technology helps in assist the engagement of various
units of supply chain management in firm (Sarkis, Zhu and Lai, 2011). In A.A. Turki Group
various information technology are used in order to maintain the performance of company so
that they can provide an effective services to their customers in terms of money and revenue.
Some essential strategies are discussed as under:
Allocation network strategies: In this various issues that are related with locations of
different warehouses are included. The allocation of network strategy maintain facilities that are
related with data and information and how it is flowed among member of supply chain and
management. It helps in the total logistics and holding costs. This is mainly applied by firm to
reducing logistics ans well as holding costs.
Manufacture source strategy: This strategy is the combination of various components
such as production and logistic cost. It has directly impacted on organisational production
process but the high range of production may increases the transportation and logistic cost. So it
is required for company to adopt most innovative techniques and tools that are helpful in
increasing production and gaining profit.
3.2 The Contribution of information technology and management of supply chain
Supply chain management is focused with maintaining all business activities that are held
in business organisations and mainly concern about flow of data and information among the
people who are involved in supply chain management in firm. There is drastic change arise at
market place in technologies, so needs to adopt new changes and develop their techniques that
enables the firm to avail data easily in their premises (Diabat and Govindan, 2011). These new
and advance technologies are helpful in establishing coordination among various activities to
manage the supply chain. Due to increasing in technologies the cost of information is decreases.
It is the responsibility of higher authority and manager to provide an effective information
technology in order to establishing an effective communication channel within organisation.
Information Technology is considered as more than any computer system.
6

(Source: Transforming supply chain 2012)
In an organisation information goes from various components for providing significant
detail about offered products and services. In this various units are involved such as suppliers,
manufacture, distributors, retailers and customers. Firstly the information is generated by
suppliers and provide appropriate detail to manufacture than to distributors to retailers and than
to customer. Information can be measured in the form of essential element of business because
without proper flow of information the production of firm decreases and in this situation
company have to face loss.
3.3The effectiveness of information technology in managing the supply chain of an organization.
The flow of information among functional areas within supply chain members and an
organisation were totally based on paper work (Green Jr and et. al., 2012). The communication
and transaction are based on paper work is very slow. Information technology has vast impact on
organisational performance, there are some effectiveness of information technology and A.A.
Turki Group are as under:
 The company is having an effective successfully E-Business solutions in order to
improving customers services.
7
Illustration 1: Information technology- Transforming supply chain

 The improving efficiency of firm allows the organisation to focused on hazardous
business activities.
 E-Business solution helps in improving the quality of information that are essential for
business.
 The redesigning of project helps in gaining wide range of strategic benefits to the user of
firm.
 Supply chain management and information technology are the most essential part of A.A.
Turki Groups which helps in effectively flow of data and information among various
department of firm.
TASK 4
4.1 Role of logistic in supply chain management in organisation
Logistic and supply chain management both are important for company. It is such
exciting location which touch employees life. There are various products which are consumed by
A.A. Turkey group on daily basis. Global trade was influence by large raw material of an
organisation. A firm need to store big quantity raw material to attracts large number of
customers. Recently, finished product is play an important role in world commerce. Logistic is
the main part of supply chain management that can apply, and control in effective manner,
company can forward and travel backward and store products or services, and other related
information of origin and the point of consumption which help in reaching requirement of new
customers. Logistics is the process by which company can get accurate product, accurate
quantity, accurate quality in the accurate place at right time for correct buyers at right cost. There
are two important approaches which represent business function (Closs, Speier and Meacham,
2011). Such as logistic and other is supply chain management. The resources between source
and goal are satisfy needs and wants which is known as logistic management. It includes some
items such as material, foods and drinking products etc. and provide some other information,
practices and production can be involved in it. The main objective of logistic is to minimise use
of resources and time. Role of this logistics of cited company can be divided into four parts that
are as under:
 Material management
 Channel management
 Supply chain management
8

 Distribution
4.2 Evaluate procurement practices within an organisation
Currently, purchasing is most innovative group in the firm. A.A. Turkey group need to
adopt such method, technology and functional concept in negotiable and dynamic manner. In
international market, sharing of purchasing and supply management function, suppliers and other
exercise help in improving organisation product quality, price, design and quantity in effective
manner. There are two type of strategies which can adopted by cited company are as under:
 Pre-competitive strategy- In this strategy, an organisation need to expand their business
operations. This strategy help in developing and growing business in other areas. It help
in overcome various types of barriers, errors and conflicts which arises within an
organisation.
 Competitive strategy- This strategy deals to motivate their employees for producing
effective products or services. In this all company search new market where more
customers are purchase innovative goods and services.
There are some observation which are based on purchasing analysis:
 According to current analysis and research, customers spend hundred of million dollars
for purchasing unnecessary items or commodities.
 An analysis of payment has shown that in most of the firms, around 50-60% of cheques
to seller are paid for less than approx. $500.
 Such payment are shown less than 4% of yearly material expenses.
 Payment which are under $1000 symbolise disbursal and approx. 9% of dollars.
4.3 Factors that must be consider when improving logistics and procurement in an organisation
Procurement is an action in supply chain management. This can provide influence on
overall success of emerging response which help in managing and improving logistics. It
represents very huge portion of total payment and it should be managed for achieving limited
value in effective manner. Procurement is a internal supply chain management process which
need to satisfy wants and needs of customers. There are three level of users which are as under:
 Internal buyer
 Effects of emergencies and current programs
 Preposition of inventory
9