Logistics and Global Supply Chain Management Case Study

Introduction Of Logistics and Global Supply Chain Management Case Study

The following paper assesses the importance of Supply Chain Management in delivering the concept of customer value Emphasis is given to the successful and unsuccessful SCM initiatives happening within today’s dynamic business climate. It will expound on supply chain concepts and skills and cover modern-day trends including globalization, disruption, and sustainability queries as well as innovative ideas such as digital transformation and its framework, and agility. Real-life examples of the application of these strategies are used in the course of this discussion to demonstrate how organizations can improve their satisfaction of customers as well as their operational advantage by the implementation of good and appropriate, modern approaches to managing their supply chains in light of these difficulties.

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Critical analysis of the main argument

It is argued that "The key to real customer value is effective Supply Chain Management (SCM)," as SCM is emphasized as a key contributor to customer satisfaction achieving competitive advantage, and long-term business success. The business environment is becoming more complex every day. Therefore, firms are faced with the problem of designing supply chains that not only deliver products and services but also value that is superior to its customers.

Supply Chain Strategies and Customer Value

The function of Supply Chain Management goes beyond moving goods and services; it is a strategic function-oriented to meeting customer demands efficiently and effectively. Other theories, i.e. Michael Porter's Value Chain Model, advocate that the creation of customer value can be achieved by integrating all departments of the supply chain to produce efficiency and reduce costs, consequently enabling higher value of product or service to customer. Several studies have shown that Supply Chain (SC) initiatives represent crucial value propositions for customers. Models like Michael Porter’s Value Chain and Resource Based View (RBV) post that strategic management of the internal and external SC operations leads to efficiency, cost reduction, and hence an improved customer value proposition. According to Porter’s Value Chain theory, effective SC strategies that create linkages between the activities in procurement, logistics, operation, and marketing functions create additional value for the final customer(Ivanov, 2020). For instance, Dell firm and Toyota firm have well implemented a Just-In-Time (JIT) inventory control approach to minimize lead time. These strategies help to achieve objectives in delivering products when the customers require them, it does not allow stock out or delay occurrences, which are unfavourable to the customers. This focus on operational efficiency shows how an optimized SC strategy increases the customer value which in turn makes customers more loyal and thus more likely to repurchase. Christopher (1992) classified that to address the customer-driven economy the supply chain organization, flexibility, and customer-focused are vital. Manufacturers like Amazon have taken this to an art form by creating elaborate logistics systems to make sure that they can deliver these products as quickly as is humanly possible anywhere in the world. Therefore, Amazon’s SC strategy manages to meet, and where possible, exceed the set customer demands through data analytics and real-time tracking(Ivanov and Dolgui, 2018). This capability of achieving a timely satisfying need of the customer is one of the ways through which SC strategies improve customer value in a competitive environment. Supply chain alignment is another idea that also implies the relationship between SC strategies and customer value. As described in Fisher’s (1997) model, SC strategies should match the characteristics of product demand. For example, mature products, which have fewer demand fluctuations, need SC strategies with low costs, while new products, with more demand fluctuations, need efficient, and more responsive SCs. In the innovation process, many companies like Zara have successfully implemented this model by managing the fashion items by using change-sensitive supply chain networks(Dwivedi et al., 2022). This agility enables Zara to sell trendy products most of which the customers appreciate thus enhancing the competitive edge of the firm. In addition, supply chains that target sustainable aspects can also increase the value for the customer; as the customers pay more attention to the values they want to support, starting with the brands that they buy. According to research conducted by Elkington on TBL, different companies developing sustainable supply chains give long-term value to customers and society. For instance, Unilever strives to use sustainable products in its/its supply chain which helps make customers become long-term customers and encourage their satisfaction(Dyer and Singh, 2004).

Critical Evaluation of Supply Chain Knowledge and Current Problems

Strategic management of supply chains is always under viewpoint development with fresh ideas now being developed to fit the existing conditions such as the disruption of supply chain, supply chain competition globally, and worry about the environment. The COVID-19 pandemic has raised concerns about the reliability of global supply chains because companies were severely affected by disruptions of supplies and delays in delivery schedules. This made them understand the need for flexibility and reliability in SCM since they have learned the hard way the importance of flexibility in approaching disruptions in the supply chain. Moreover, supply chain sustainability emerged as one of the significant concerns because customers and regulators require companies to have ecologically friendly services. Concepts like the Triple Bottom Line by Elkington (1994) argue that environmental and social factors must be incorporated into SCM to create sustainable value. Multinational firms, for instance, Unilever, have shifted to sustainable supply management techniques, decreasing the emission of carbon and increasing the level of openness in sourcing which has raised brand value and consumers’ allegiance. However, these strengths do not readily enable many organizations to manage and attain the necessary level of complexity in supply chains(Dixit, Seshadrinath and Tiwari, 2016). It becomes a challenge for logistics managers to manage resources when there are factors such as geopolitical tensions, changes in tariffs of trade, and scarcity of resources. Hence, the identified issues must be managed through practicable solutions that would enhance strategies of supply Chain by embracing current methodologies like the use of technology and big data analysis(Hayakawa and Mukunoki, 2021).

Key Requirements and Opportunities for Supply Chain Strategy

The essence of supply chain strategy is, therefore, the ability to link it to business objectives, customers, and the market. A good SCM strategy must be built with adequate information on the type and level of market demand, the knowledge of the suppliers, and the legal framework regulating the market. Companies must seek for end-to-end integration, whereby each activity in the whole supply chain such as procurement, manufacturing, warehousing, order fulfilment, and customer service all have to interlink and unite to deliver optimum value. Possible customer value creation initiatives within SCM are the integration of technology solutions such as AI, IoT, and blockchain. These technologies facilitate information exchange, forecast, demand sensing real-time monitoring, etc helping firms to make intelligent supply chain decisions in terms of inventory and delivery time. For instance, Walmart applies business analytics in customer demand to know the right time to order stock, to avoid situations where there are no stocks to supply to the customers, or when there is excessive stocking of stock in ware/house that may lead to customer dissatisfaction. Furthermore, there is potential when companies come up with a collaborative supply chain(Hayakawa and Mukunoki, 2021). The management of supply chain relations with suppliers and logistics service providers to increase the velocity of material and information flows, decrease order lead times, and increase operations’ performance. For instance, Toyota uses the Just-in-Time (JIT) supply chain in which the organization is closely working with its suppliers to reduce waste while at the same time ensuring that consumers are supplied as soon as possible(Dolgui, Ivanov and Sokolov, 2020).

Analytical Techniques for Supply Chain Analysis

For supply chain managers to ensure that supply chain performance is optimal, companies should employ metrics that will help in the evaluation of supply chain performance and customer satisfaction. A supply chain assessment is provided by Supply Chain Mapping, the SCOR model, and Total Cost of Ownership (TCO) analysis. The approaches will include, for instance, Supply Chain Mapping, which enables organizations to map out the supply chain completely to find disparities. Consequently, the SCOR model defines how we can systematically measure and evaluate the supply chain by countries' key performance indicators such as reliability, responsiveness, and cost. It also enables the companies to compare and manage their supply chain key performance indicators with the customers’ expectations to achieve organizational goals. Whereas TCO analysis considers the overall cost of acquiring a product, transporting it to the user, and disposing of it throughout the product’s life cycle. By the use of TCO, organizations will be in a good position to address issues of how to reduce costs and provide more value to consumers(Wang, Han and Beynon-Davies, 2018). Analytical tools enable firms to make intelligent decisions that help increase supply chain transparency and efficiency and ultimately contribute to improved customer worth. There exist seven categories of risks that affect customer value in the global supply chain: Supply Chain Risk Management and Global Supply Chain Resilience. According to Sheffi (2005), manufacturing firms should focus on crafting supply chain networks capable of continuing operations and delivering high levels of service despite disruptive events. Indeed, today big and famous companies including Apple and Walmart have adopted risk management techniques like vendor diversification and disaster contingency planning that enable them to continue operating in normal ways during incidences. These strategies ensure customer value through product availability and delivery reliability within the nest of global volatilities(Iranmanesh et al., 2022).

Support the analysis with one or two examples from companies

Supply chain management strategies shape the key enablers of delivering value to customers in many organizations. By making internal and external operations efficient, organizations can deliver better service, faster products, and cheaper. However, supply chain failures of this kind result from poor strategies by organizations, pulling down the supply chain, and negatively impacting the delivery of customer value with issues such as poor product availability, higher prices, or poor services.

Apple’s Supply Chain Strategy: Delivering Superior Customer Value

Another key SCM tactic is diversification of suppliers; where Apple restricts its dealings with a quantity of suppliers of high quality to ensure it has total control over the quality of products it develops and the time it takes to produce them. For instance, Apple has had a long-term contract with Foxconn as its manufacturer and this helps the giant firm to manufacture millions of devices within the shortest time possible. This relationship helps Apple to raise its manufacturing capacity quickly to respond to popular demand for its iPhones, iPads, and Macs especially in the early days of release to the market. In addition to reducing risks associated with working with multiple middlemen, supply chain management also offers Apple economies of scale, guaranteeing that the company can produce its products, and still achieve quality and low costs of production(Ashenbaum, 2008). This strategy of forming long-term relationships with the suppliers is making a direct contribution to the generation of customer value since the end consumers are getting devices of good quality that are also performing to expectations. Also, due to good negotiation skills with suppliers, the core manufacturing costs of the company have been well managed thereby enabling the company to offer its premium products at reasonably affordable prices. Meet another subdivision of SCM, namely inventory and demand management, in which Apple also demonstrates tremendous results that guarantee the timely delivery of products to customers. Due to advanced technologies in business intelligence, Apple can forecast the demand for its products thus having efficient production schedules and inventories. This approach assists in the elimination of situations where Apple experiences stock out or overstock, and the company’s products are made available to global customers. The exposure of JIT manufacturing also leads to low holding costs which will impact positively on the company’s pricing. This synchronization ensures that Apple meets customer demand while also offering superior quality products with new devices released on the market(Zidi et al., 2023).

Nevertheless, Apple is not invulnerable to supply chain disruptions although having notable successes. Apple's supply chain had challenges during the COVID-19 when the virus hit China affecting most of its manufacturing firms and causing the production and release of new products. These risks became a problem for Apple though the firm was able to address these risks fairly quickly due to its flexibility in changing its supplier base and manufacturing locations, therefore flexibility is a crucial aspect of managing and implementing a supply chain. This responsiveness ensured that Apple could keep creating value for the target segment regardless of the existing environmental conditions.

Amazon’s Supply Chain Strategy and Maximizing Customer Value through Speed and Efficiency

Amazon has an efficient supply chain design that follows speed, efficiency, and complete customer satisfaction. The company has developed many fulfilment centres and distribution points to achieve same-day or next-day delivery in many areas. Here, employing some of the most innovative technologies like robotics and Artificial intelligent systems; Amazon enhances orders, stocks, and delivery fulfilment. These features enable the accurate prediction of customer demand and guarantee the availability of products in the firm. Netflix is an example of this strategy, in which free delivery was provided for members at a faster pace hence satisfying the customer. Moreover, Amazon’s data analytics are another success factor that makes product recommendations specific to each client, so it makes shopping enjoyable. By prioritizing goods such as groceries and pressuring supplies to maintain social distancing, Amazon continued to grow its staff throughout the COVID-19 crisis period. This creativity coupled with a strong logistic platform means that Amazon perpetually seeks to add value for customers by offering timely, reliable, and customer-specific solutions(Ming, Omain and Kowang, 2021).

Challenges and Opportunities in Global Supply Chains

The problems for global supply chains include geopolitical hazards, changes in trade tariffs, environmental concerns, pandemics, and so on. These conditions give rise to delays, costs, and impact on product launch and accessibility such as the availability of raw materials and components for Apple Inc. and Amazon. Moreover, the sustainability issue and the changing demand for ethical and non-exploitative supply chains increase the pressure on the firm to change the supply chain. While these are the challenges, they also are opportunities. Businesses can obtain supplies from different sources, apply new technologies, including artificial intelligence and blockchain for openness, and improve sustainability. Thus, Corporate Social Responsibility programmes help build up capacity, manage operational risks, and keep up with the increasing need for socially responsible business practices, thereby satisfying consumer needs and sustaining a competitive edge in an increasingly global market(Dyer and Singh, 2004).

Conclusion

Concisely, supply chain management (SCM) is essential to create customer value that supports supply chain processes, improves effectiveness, and delivers customer requirements. Some current successful examples of the implementation of SCM strategies include companies such as Apple and Amazon reflecting improved supplier relations, technology, and supple logistic networks. However, global supply chains have risks and/or issues such as geopolitical risks and sustainability pressure where agility solutions are needed. The above challenges can be mitigated through the adoption of competition as the incentive for innovation, risk management as an enhancer of sustainable supply chain management as well as improving customer value within a competitive global environment.

References

• Ashenbaum, B. (2008) 'The Global Sourcing and Logistics Exercise: A Group Exercise to Demonstrate Basic Global Supply Chain Principles,' Decision Sciences Journal of Innovative Education, 6(2), pp. 355–364. https://doi.org/10.1111/j.1540-4609.2008.00180.x.

• Dixit, V., Seshadrinath, N. and Tiwari, M.K. (2016) 'Performance measures based optimization of supply chain network resilience: A NSGA-II + Co-Kriging approach,' Computers & Industrial Engineering, 93, pp. 205–214. https://doi.org/10.1016/j.cie.2015.12.029.
• Dolgui, A., Ivanov, D. and Sokolov, B. (2020) 'Reconfigurable supply chain: the X-network,' International Journal of Production Research, 58(13), pp. 4138–4163. https://doi.org/10.1080/00207543.2020.1774679.
• Dwivedi, Y.K. et al. (2022) 'Metaverse beyond the hype: Multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research, practice and policy,' International Journal of Information Management, 66, p. 102542. https://doi.org/10.1016/j.ijinfomgt.2022.102542.
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Author Bio

Jordan Smith   7 years | MBA

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