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1. Introduction: Global Supply Chain Management
Global business environment is becoming complex day by day. Operating in the international business world is not an easy task as they are facing several issues that needs to be managedappropriately. The increasing competition between the nations and the increased technological advancement and digitalisation had increased complexities in the global business environment(Michie, 2019). The global changes around theworld are affecting the business operations to a greater extent. Managing large number of suppliers and buyers across the world is quite difficult. In this report the researcher would focus on explaining the management of global supply chain.
For explaining the concepts and practices related to the global supply chain management the researcher would focus on considering the retail industry. Along with this the researcher would also consider four different organisations operating in the same industry for critically evaluating the global supply chain management practices of the firms. In this report the researcher would focus on considering four retailers operating in the global retail industry. The report focuses on Tesco, Sainsbury, M&S and ASDA in this report(Filimonauand Gherbin, 2017). Tesco is a leading multinational grocery service offering firm of UK and Sainsbury is also a grocery retailer of UK and both the firms are operating at international level. ASDA is also a British supermarket chain that is operating in diverse nations(Guoand Wang, 2019). Along with this M&S is also a retailing company that offers wide range of products and services to the customers across the globe. In this report the researcher would also provide managerial implications for global supply chain management for the firms operating in the chosen industry.
2. Critical Analysis Of Global Supply Chain Management Practices Of The Chosen Global Companies
With the globalisation of world economy, the businesses operating at both national and international level are facing several managerial issues and challenges while operating in effectively(Pieterse, 2019).All the firms face issues and challenges in managing the supply chain at both domestic and global level. Supply chain management is an important business operation, and it is important for the firms to focus on managing it in an appropriate manner. Maintaining the supply and demand of the products and services is an important thing for all the firms as it is having a major impact on all other business operations.
Supply chain management is being referred as the management of supply of goods and services or the management of production flow of good and services from the raw material to the final product or services. Or in other words it can be said that supply chain management is defined as the management of all the activities related to supply chain. Businesses needs to manage several operations related to the supply change management. There are different practices related to the supply chain management such as planning, sourcing, inventory, production, inventory, supply, location, and logistics. When the firms are operating at the international level then the supply chain is more complex and needs to manage more appropriate manner(Rajeevet. al.2017).Having suppliers and buyer from the different nations make the entire supply chain more complex for the global firms.The case companies are operating in a retail sector and are offering wide range of products and service to their customers. For such businesses supply chain become more complex and dynamic because they must manage the demand and supply of diverse products and services.
2.1 Overview of Global Supply Chain Design
Fahimniaet. al. (2018) had stated that supply chain design is referred as the process of determining the infrastructure of supply chain and includes all the things such as developing the manufacturing units, distribution centres, logistics and production processes and other things related to the supply chain management. In support to this Callejaet. al.(2018) had mentioned that supply chain design is referred as the process that is used by the businesses for creating and managing a current balance among inventory, transportation and production of goods that would help the firm in satisfying the needs of customers. It can be said that supply chain network design is referred as the process ofbuilding and modelling the supply chain for understanding the cost and time that would be required for bringing the products to the market. Businesses needs to focus on designing the supply chain in an effective manner because this would help them in meeting the demand of the products and services by managing the supply chain in an appropriate manner.
When the organisations are operating at the international level then it is important for them to focus on developing better interconnection and communication among the suppliers, manufacturers, and the company. This would help them in managing the operations related to the supply chain management in an effective manner. Companies need to make better and strategic decision while developing the supply chain network. In the present competitive marketplace supply chain is being considered as a critical competitive force that can help the company in gaining competitive advantage over others. When the organisation is operating at the international level then they need to focus on developing an effective network among their suppliers, manufacturers and markets that can help them in managing the planning and operation management of supply chain efficiently.
There are several factors that are having a higher influence on global supply chain network design. The factors such as market structure, market segment, procurement cost, logistic costs, production cost, over heads and cost of sales are crucial. Along with this the companies operating at the global level needs to focus on several factors of the business environment while making decision related to the global supply chain network designing. All the factors of the business environment such as strategic factors, political factor, competitive forces, technological factors, and other macroeconomic factors are having a higher influence on the decision making related to supply chain management(Tu, 2018). The case companies like Tesco and Sainsbury are operating at international level and serving a lot of products to their customers. They need to focus on consider the changing customer demands while developing the global supply chain networks because with time and customer demand the speed of the supply chain needs to be improved.
The global businesses need to use better global supply chain management strategies that can help them in managing their supply chain efficiently.In the recent years with the increased complexities in managing the supply chain Tesco had started focusing on using the Lean manufacturing strategy in the organisation. Lean manufacturing is one of the attractivestrategies that is used by the businesses for eliminating the waste and the non- value adding activities from the supply chain. This strategy is helping the company in managing the supply chain in more cost-effective manner(Centobelliet. al.2018).
When the firm is looking forward to expanding at the international level then it is important for them to focus on designing the global supply chain management network in an effective manner. All the decision related to the development of the global supply chain network needs to align with the firm’s objectives and vision. There are different risk factors that can affect the global supply chain networks such as global trade wars, material shortage, economic crisis, legal risks, political risks, and financial risks as well(Martinoet. al. 2017). Businesses needs to be effective in identifying all the potential risk in an effective manner and managing them efficiently so that they can operate properly in the global market.
2.2 Understanding Global sourcing
Jiaet. al.(2017) had mentioned that sourcing is referred as the process of identifying and assessing the potential suppliers that can offer high quality products to the company for satisfying their demand in an appropriate manner. Sourcing is also known as procurement and in general terms it can be defined as the process of connecting with the suppliers and getting all the good that are required by the firm for offering the products to their customers. M&S is having large number of suppliers from different locations and diverse nations. Due to this reason the organisations focus on having sufficient suppliers that can offer them high quality products so that they can satisfy the needs of their customers.
Suppliers are considered as an important stakeholder in the global supply chain and procurement is one of the most important part of global supply chain management. International businesses focus on developing better procurement strategy that can help them in getting the products in acost-effective manner and having the suppliers who can deliver the goods on time with better quality(Kotabeand Murray, 2018). With the increasing complexities in the supply chain management, it had become important for the firms to have better procurement strategies. Tesco is having an attractive market image and it is important for them to manage thesuppliers efficiently.
Tesco is using the procurement strategies such as Total quality management and global sourcing that are helping the in managing the supply of high-quality products in an efficient manner. Similarly other firms are also operating at the international level and they are focusing on having global sourcing in they focus on using the goods and services that are been sourced from the global market(Jia and Jiang, 2018). Along with this these firms need to focus on making better decisions while selecting the global sourcing location. It is important for them to select the location that offer them cost effective benefits so that the company can get betterhigh-quality products from the suppliers in the possible low cost.
Costing is one of the important factors in the global sourcing because it involves a high cost. Businesses are focusing on the global sourcing as it allows them in getting the best quality products and having wide range of suppliers from different locations and nations. But it is important for the employers to focus on the disadvantages and risks involved in having global sourcing.The dynamic nature of the cost drives in the global supply chain needs to paid attention. There are three types of cost involved in the global sourcing which are static costs, dynamic cost, and the hidden cost. Sharmaet. al.(2019) had mentioned that static cost involves the purchase cost, transportation cost, cost related to quality control, insurance, and custom clearance cost. This cost is related to the obvious factors. The dynamic cost and the hidden cost are also important for the company. It can be said that firms need to focus on having effective decisions while developing the global supply chain network and must consider cost as an important factor. For example, the case company M&S being a retailer focusing on global sourcing and is sourcing the products from 70 nations. The company is doing so for making their entire global sourcing more cost effective by having wide range of suppliers that can satisfying their demands.
When the international firms are having large number of suppliers then it became important for them to focus on developing better strategies for supplier relationship management. Businesses needs to have better relations with their suppliers as this helps them in managing their suppliers in an effective manner(Wu et. al. 2019). The case companies ASDA and Sainsbury are focusing on developing better trust and communication with their suppliersso that they can build better relations with the suppliers and can appropriately manage the supply chain.
2.3 Management of Global distribution
Distribution of the products or delivering the services is one of the most important and difficult part of the entire team. Companies needs to have better technologies and highly skilled employees that can manage all the operations in appropriate and can distribute the products to the customers in an effective manner.Zhao and Zhao (2018) had stated that distribution management is considered as one of the important parts of the supply chain management. distribution management is being referred as the process of overseeing the movement of the goods and services from the suppliers or the manufacturers to the final consumers. In the competitive business world firms focuses on having an attractive and high efficiency distribution network that help them in delivering the products to their customers in an effective manner and satisfy them as well.
Dujak and Sajter (2019) had mentioned that distribution channel is referred as the network that enables the organisation in distribution of the products from their production sides to the final customers. There are different modes of distribution and the distribution channels used by the company depends on different factors such as size of the organisation, target market, availability of resources and number of customers.
Aminoff and Hakanen (2018) had stated that there are four types of distribution channels which are direct sales, sales through retailer, sales through wholesaler and the sales through agents. When the firms are offering products and services to the customers across the borders then they need to have a great distribution network that can help them in offering the products in an effective manner. There are three widely used strategy for the global distribution of the products and services which are international departments, working with distributors and online. In the international department the firm enters the foreign nation by establishing themselves in the nation and they are creating a customer base and offering products to them in an appropriate manner. In contrast to this when the firm focuses on working with the distributers then they need to develop a foreign distribution agreement with the local distributors, and this would help them in distributing products internationally successfully.
Due to increased digitalisation in the recent decades and technological advancement online sales had gained importance. As a respond to this the firms are focusing on using the Omni channel retailing. In general terms omni channel retailing is referred to the multiple channel approach in which the organisations focus on using different channels for offering the products and services to the customers instead of just focusing on one. When the firms are operating in the global market then they have to offer great customer experience and had to offer the products and services in such a way that it would satisfy their demands(Galipoglu et. al. 2018). For example, Tesco is offering wide range of products through both online and offline selling mode. The company is offering in store services to their customers in their supermarkets, hypermarkets and many more. Along with this they are having an option to make online purchase and in online shopping also they are offering great accessibility to their customers that allow them to make a purchase through mobile phones, laptop, or a tablet also.
It can be said that the company is using this approach for offering better services to their customers. Moreover, they are also focusing on bringing great technological advancement with better technologies in their both brick-and-mortar stores and online shopping. This is helping them in providing great customer service to their customers(Ailawadi and Farris, 2017). But in contrast to this using the omni channel distribution offers several challenges as well. One of the major challenges faced by the businesses while using this approach is the management of supply chain because the segmented supply chain processes make it more difficult. The businesses like M&S have may distribution centres and due to this reason, they must manage different in house and outsourced operations and this make the entire supply chain more complex.Also, the return management in the global distribution of the products is more complex in omni channel distribution network. Return management is distribution is a challenge because the organisations are unable to offer the ease of return to the customers if they find any issue with the products due to the complex nature of global supply chain. Along with this inventory management also become more complex for the global firms in the omni channel distribution.
2.4 Managing Global logistics
Managing global logistics is one of the difficult and important tasks in the supply chain management. Tang and Veelenturf, (2019) had mentioned that logistics is referred as the practices involved in the transportation of the goods and services through the means of different transportation system. This also includes the preparation, packaging and warehousing the products. While operating in the international business environment firms needs to manage the global logistics. When the organisations are operating at global level then they need to have an effective logistic management system that helps them in ensuring proper movement of the products and services from one nation to another(Bridgelall et. al. 2017).
In supply chain management the businesses must focus on ensuring a better balance between inbound and outbound logistics. In general terms inbound logistics are referred as the transportation and storage of the received good or raw material. On the other hand, outbound logistics are referred as the process of transporting the finished goods to the final consumers. Both the practices are equally important for managing the global logistics and the entire global supply chain management. This is also important for ensure the balance between the demand and supply of the products and services offered by the company(Waters, 2018).
When the organisation is operating at the global level then it is important for them to have effective strategy for global logistic management. International shipping is referred as the process of importing and exporting the goods across the boarders by using the different modes of transportation(Tang and Veelenturf, 2019). While doing international shipping the global firms needs to follow the different rules and regulations made by the government related to the import and exports. Along with the tax policies also varies country wise and all these factors increases the implications for shipments across international borders.
There are four different shipping methods that are used by the businesses such as Air, Train, Truckload, Ocean, and LTL. When the businesses are using the shipping then it is important for them to focus on INCOTERMS that are being developed by the government for managing the proper logistic functioning in the nation. INCOTERMS are the set of different responsibilities that are required to be followed by the both the buyers and sellers involved in the shipment. It can be said that the case retaining companies like ASDA are also doing shipment activities and they must use follow the INCOTERMS and all other logistics activities in an appropriate manner for managing the supply chain efficiently(Schaefer, 2017).
2.5 Significance of sustainability in the global supply chain
With the increasing concern for the environment around the world, sustainability had gained a lot of importance for the businesses in recent decades. Koberg and Longoni, (2019) had mentioned that sustainability is referred as the process or ability of meet the present needs without affecting or compromising the ability of future generation.Sustainability had gained a lot of attention for the businesses and they are working on operating in a sustainable manner. In businesses sustainability is referred as the ability of the organisation to do business without affecting the environment, community, and the entire society in a negative impact.
Cramer (2017) had mentioned that when the firms are operating in a business environment then it is important for them to reduce the negative impact on the environment. The case companies are operating at the global level and there are having the responsibility to operate in a sustainable manner. These firms are investing better capital in their corporate social responsibilities and for their sustainable development. Along with this the firms are investing in effective strategies and plans that can help them in working in a sustainable manner and having a positive influence on the environment.
For example, Tesco, being a leader retailer is having different practices for attaining sustainability. The company is focus on making healthy and sustainable food available and affordable for all the peoples. Also, the company focuses on reducing the negative impact on the environment by investing the going green, making their packaging fully recyclable in the coming years. Along with this the company is investing better capital for solving the social issues by forming tie ups with the NGOs (Tseng et. al. 2019). They are working on different social issues such as child education, women empowerment and many more. It can be said that Tesco is working effective for the society and environment for attaining the sustainable.Similarly, all the firms operating at the national and international level focuses on attaining sustainability and leading the firm towards sustainable development. M&S is also working effectively for reducing the waste and developing a waste management system in the company. They are doing so for attaining sustainability and leading the firm towards success and development.
Sustainability is also important in supply chain management. Colen et. al. 2019) had mentioned that sustainable supply chain management is referred as the process of making the entire supply chain sustainable so that it would not affect the environment and society in a negative manner. Supply chain involves a lot of business practices that uses energy to a greater extent and is having major negative impact on the environment. With the increasing concern for the environment the enterprises are looking forward to making the entire supply chainmore sustainable so that it would not affect negative impact on the environment, society, and economy (Wieland, 2021). Sustainability in the global supply chain is more important because the transportation, inventory and all other practices are having a major negative impact on the environment. Sustainability in not only restricted to environment or just going green but the firms need to make their supply chain more cost effective also.
Sustainability is especially important for the better future of the firm and due to this reason, the global firms need to developing effective strategies for making their global supply chain more sustainable. It is important for the firms to focus on develop better relationship with their suppliers and develop effective plan and use latest technologies that can help them in making their supply chain sustainable. M&S, Tesco, ASDA, and Sainsbury are having better strategies for making their supply chain sustainable. Firms needs to develop sustainability goals and must make the tie ups with their suppliers so that they can reduce the waste, reduce the unnecessary cost, use energy from the renewable sources of energy and making the supply chain more sustainable (Rajeev et. al. 2017).
In the global business world, competition had increased to a greater extent. Attaining sustainability in the supply chain offers the competitive advantage to the firms over others. Tesco is focusing on making the entire supply chain more sustainable for gaining competitive advantage over others. For this they are working effectively with their suppliers around the world for reducing the energy cost, using renewable sources of energy, decreasing food waste, reducing the carbon emission. And minimising the overall negative impact of the company and supply chain on environment and society (Morais and Silvestre, 2018). Similarly, Sainsbury is also working efficiently for developing a new supply chain and logistics operating model for reducing the cost and attaining sustainability. Thus, it can be said that global firms should invest in their sustainability programs as this would help them in gaining competitive advantage over others and leading the firm towards success.
3. MANAGERIAL IMPLICATIONS FOR GLOBAL SUPPLY CHAIN MANAGEMENT OF CHOSEN FIRMS IN RETAIL INDUSTRY (1000)
Global market is becoming more complex and competitive with time and this is creating managerial issues for the businesses in managing the global supply chain in an effective manner. Retail sector offers wide range of the products to their customers and all these products are being sourced from different nations in the global supply chain. Due to this the supply chain management at retail sector is complex and firms operating in this industry needs to be more advance while managing the global supply chain.High cost of managing the global supply chain is a challenge for the enterprises operating at international level. For this it is important for them to focus on setting the manufacturing units in the nations that offer low taxes and availability of the labour at low cost. This would help the companies in making the supply chain cost effective.
Managing the quality of the products is also an important challenge for the global supply chain management. The case company Tesco is also facing issues in managing the quality of the products and for this they need to take better decision that can help them in solving the issue efficiently. For solving the issues in the supply chain, the firm needs to develop efficient processes and better strategies that can help them in appropriately solving the issues.
Shifting market trends and changing customer preference in the retail sector are driving thechallenges for the businesses. Businesses operating in the retail sector needs to focus on understanding the changing customer pReferences and buying pattern and then effectively managing the supply chain. The grocery sector is changing with the shifting eating habits of the customers across the globe, and this is effectively affecting the food retail sector. The organisation such as case companies needs to focus on developing effective strategies for understanding the future market trends and this would help them in working appropriately so that they can manage the firm.
The companies should focus on using the latest technologies for managing the supply chain effectively according to the changing market trends. Demand forecasting is an important factor for effectively managing the supply chain because it affects the overall supply chain efficiency. The companies operating in the global retail industry need to focus on making the global supply chain digital this would help them in gaining greater efficiency and managing the demand and supply of the goods and services in an effective manner(Ben-Daya et. al. 2019).
Artificial intelligence (AI) is becoming more popular in the recent decades and soon it can be widely used by the businesses for managing their global supply chain. If the global firms will focus on using AI,then it would help them in transforming their global supply chain and making it more extraordinary to react as per the different situation and changing market trends. This would help the organisations in decreasing the cost of supply chain management and would increase the revenue of the firms that would lead them towards success and development.
For working effectively in the changing global environment, the management must focus on making better strategies for managing the supply chain in an effective manner. In the future the global supply chain management would become more complex, and technology would play a major role in it. The management must focus on using advanced training to their employees for managing the business supply chain in an effective manner and use the technologies properly so that it will add value in increasing the speed of the supply chain. Along with this the supply chain managers must focus on managing every stage of the supply chain more advanced so that the entire supply chain can become digital and technologically more advanced.
Cooperation and coordination among the different employees working at every stage of the supply chain should be developed. This is important for better management of the supply chain. Along with this the company should focus on having highly skilled employees that can work effectively with the changing technologies in an appropriate manner. It can be said that the management is playing a major role in the supply chain management and they must work effectively for managing efficiency in future as well.
CONCLUSION
In the above-mentionedreport, the researcher had described the different factors associated with the global supply chain management. the report highlighted that the global supply chain is complex to manage, and it is important for the firms to focus on all the different stages of supply chain management in an effective manner. Along with this the researcher had explained the different trends, theories and concepts related to the global supply chain design, distribution, logistics and sustainability. Moreover, the report had highlighted the future trends in the global supply chain management for the retail sector and had provided managerial implications for it. Based on the above-mentionedreport, it can be concluded that the global firms such as Tesco, M&S, ASDA, and Sainsbury needs to focus on having effective strategies, planning, better resources, and great management so that they are manage their supply chain in an effective manner and can attain sustainability as well.
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