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Assignment - Global Supply Chain Management

Successful Supply Chain Management is a vital component when measuring both internal and external success of a business. Achieving and sustaining customer, tiered supplier and company requirements is an essential ingredient for both success and survival in the competitive global market of the twenty first century.


Answer - Supply Chain Management 

Executive summary

Supply chain management is an important process that helps the companies in maintaining the demand and supply of the products in the most efficient and hassle-free manner. However, as per the data collected in this study, it can be analysed that the food industry is experiencing issues of quality, political and economical management associated with their supply chain system. Due to the increase in the demands of the consumers, the companies are experiencing problems in maintaining their supply chain systems as per the international standards. The food industry is adopting a number of policies and practices in order to meet the expectations of their consumers.


The food supply chain is growing at a rapid rate as the expectation of consumers for exotic food; fresh on their plate is increasing. This demand of the consumers has extended the supply chain management on a global level making the supply chain process longer and more complicated. The primary aim of this report is to evaluate the benefits as well as the challenges associated with supply chain management within the food industry. The various strategies and policies adopted by the company in order to overcome the issues of the supply chain management will be explored and highlighted in this study.

i. Critically evaluate the positive and negative attributes associated with the field in relation to the chosen case.

Supply chain management is one of the most important functions of a business. Supply chain refers to the end to end procedure involved in making the products available to its customers. Starting from the warehouse to end users, the entire procedure is part of the supply chain. Supply chain management is an essential and integral part of managing the entire procedure. This refers to the broad range of activities that are involved in planning, controlling and executing product flow. The stages include acquiring raw materials to production to distribution to selling to the consumers through distribution channels.

Effective supply chain management can earn a company greater profit, more influence over the customers and better relationship with stakeholders, on the other hand ineffective management an result to reducing growing of the company, poor performance and so on. Some of the key benefits and negative aspects associated with supply chain management is analysed in bellow section.


The first and foremost benefit that could be achieved with the help of effective supply chain management is the product and material flow. Time to the consumer is considered to be one of the most curial indicators of product flow. However, several other factors are considered as part of the supply chain. The quality of raw materials, the supply and demand flow, the cost of production and such other factors are part of the supply chain. Demand and supply forecasting is a vital part of supply chain management. This enables the company to understand what the requirements of the consumers are and what level of production is required to meet consumer expectation. SCM also allow full visibility as well as traceability of the movement of the raw materials as well as goods, from the supplier to the consumer end. McDonald's use effective inventory and demand forecasting method to understand the demand of consumers. In order to manage the balance between supply and demand and improve the delivery system, McDonald's uses a bespoke ordering system and demand forecasting tools. In its official page, the company, informing about its business, states, "We use forecasting tools to ensure the delivery of products from suppliers to restaurants. Along with this, each restaurant uses a bespoke ordering system to review previous orders and select the products they'll need in their next delivery."

Supply chain management enables time effectiveness and cost efficiency. For example, in McDonald's, the company use such a system for scheduling vehicle routes that help in finding out the most hassle-free and effective routes for its fleets. The system considers severing aspects, like time, roadwork, the speed of the vehicle and roadblocks and type of vehicle, and so on. Thus, effective supply chain management helps to reduce overall time and cost for transportation.

It is also observed that the supply chain improves inventory management. This is beneficial to arrest the bullwhip effect. This consequently reduces the chances of overproduction. The bullwhip theory is a supply chain demand forecasting related theory, which was developed by the students of MIT. Bullwhip effect refers to the method of demand pressure. Here the demand of customers is regarded as the whip of a bull. Consumer demand is one of the most unpredictable factors and therefore, it is considered aa bullwhip. The supply chain management is considered to be beneficial for managing consumer demand.

It is analysed that supply chain management is one of the most significant factors for the success of an organisation. However, there are specific challenges associated with supply chain management that can influence the performance of the supply chain process. It is analysed that SCM. It is observed that changing a supply chain management process requires a lot of time, financial investment and human resources. If the supply chain management is not appropriately implemented there will be wasted labour, missed deadlines and service redundancy that will influence the performance of the company and result in significant cost (Laudon and Laudon, 2016).


It is observed that implementing supply chain system often requires a lot of training that is time-consuming and requires additional investments. For instance, in Wal-Mart and Tesco, the companies are making use of technological innovation such as electronic payment, aiding on inventory management and more. In order to operate these systems efficiently, the employees must be trained adequately so that they can handle the consumers and the system efficiently which, might increase the cost of the company.

SCM is highly dependent upon the supply chain management software, but often the different parts of a supply chain are observed to work on various software programs that help in preventing seamless integration. This software is supposed to forecast parts of distribution required, but if inaccurate information is entered then the forecast is incorrect. The system can also be disrupted if employees bypass the SCM system and manually manage the inventory and order with the help of a fax machine and spreadsheets. If the company do not provide adequate training to make the employees comfortable with the system than the system will give an incomplete picture of the supply chain (Nordin and Adegoke, 2015).

Supply chains are analysed to be lean by design. More extensive inventories are considered more expensive to the house, but they do create a lot of buffer for unexpected events. If any surprise demand for a particular product increases due to certain unpredictable trend than the supplier can run out of stock of a significant part, which will result in production delays and also increase wasted resources as the manufacturer will have to wait for the suppliers. The challenges associated with supply chain management are significant, and the organisations must adopt strategies and policies in order to ensure that the system is, and the employees can deal with the system adequately so that the benefits of the supply chain can be achieved in the most efficient manner.


ii. Explore and critically analyse the gap between evaluation and implementation of supply chain improvement.

Multinational projects in food industry are planned and projected on international scales, including various states and locations with all sites planned to turn out operational across same timelines. The organizational management or the project managers are generally situated in one country and therefore, this becomes critical for project managers to always keep running to different locations and be available to focus on all locations (Matta, 2015). Therefore, to remove challenges, project teams are developed at state and regional level. On the other hand, if the project plans, designs and control lay with one office or a team, the rest of the food supply chain project teams can become enablers and implementers ensuring in the reduction of concentration and energy. The main project team capitals could not widen themselves and leverage out to achieve to all sites thereby the largest or the significant locations.

An international supply chain project includes technology evaluation and application involving structure and software as well as includes various logistical models through warehousing, transportation and others. It has been seen that application of SCP underlines two of three main issues organizations in the food industry should resolve when controlling their supply chains. The application of the SCP underpins the procedures and level of integration an organization uses to control its business and relations. The supply chain designs with the lasting issue of the relation network system (Jonssonand Holmström, 2016). As an outcome, the important benefits and competitive advantages, which could be achieved from supply chain evaluation required to be attained to a substantial level through SCP. If the results of SCP fall petite of expectations, this is not just the process, which is not fulfilling its expectation level to the organization but also the existing SCM process.

The food industry in United Kingdom is complex and highly energetic in nature. The demands on the food processing systems by short-life products and raw resources, more demanding retailers and consumers, and developed levels of rules and laws have resulted in companies needing to reply on various levels and on a series of varied issues to attain financial and environmental sustainability. In most of the cases, these challenges have resulted in the industry becoming highly isolated from the main manufacturing industries as they deal with their individual problems. The continues demands to maintain and often decrease expenses in the food sector suggest that organizations must constantly innovate and increase more effective manufacturing systems along with innovate the products or food items to maintain expense levels. Smart system is likely to be underlined as an important opportunity for organizations to possibly stabilize productivity and develop output both in respect of cost decrease and quality consistency (Thomaset al., 2018). The reliable flexibility provided by Smart systems in supply chain management would ensure a product volume mix to be attained with efficient levels of consistency as well as effectivity.


Supply chain management process could be divided and differentiate as per the small companies and medium to large companies in the food industry. In some of the scenarios, bespoke trade could be attained as well as the capability to rapidly changing into achieves differing consumer demands as an outcome of such tools and systems (Dubey and Gunasekaran, 2016). Thus, small SMEs were more tend to search collaborative efforts with other organizations. Though, it was not the scenario with bigger food manufacturing corporations that wanted to deal with production challenges like new product variations and development, by themselves rather than "de-risk the NPD procedure" with the help of supply chain connection with medium to small but more expert organizations. Thus, one of the challenges to bigger organizations failing to invest in NPD network and, therefore, to enduring manufacturing-only plans was the perceived expense of investments as well as the risks of failure.

The concentration on cost competitiveness in the food and drink industry has outlined an effective shift on lean thinking in current years. Lean management in organizations has frequently focused on expense cutting around the supply chain. The need for agility in supply chain management is focused on demanding volatile market patterns and shortening food life cycles. Market sensitiveness needs a change from forecast-driven planning process to demand-driven planning procedure. The virtual supply chain procedure in organizations aimed at reducing inventory levels with the help of more efficient application of survey results, particularly data regarding consumer demands (Sweeney, 2008). Current developments in ICT have simplified this. The process integration in the agile SCM demands companies upstream and downstream in a macro supply chain. It replaces the divination that is a feature of various fundamental managed supply chains. Recently, network-based processes underline that supply chains tackle with other supply chain processes. An agile process would attempt to simplify the compatibilities of all players in the supply chain process to make sure an efficient level of responsiveness to varied market needs.

Therefore, the changing demands of industry internationally have produced facts in a situation in which the efficient management of food supply chains are becoming increasingly observed as a main source of competitive advantage. To be precise, the important potential remains around the sector to interestingly develop shareholder value by the implementation of SCM thinking.


iii. Analyse multidimensional global supply chain issues and apply techniques that could assist in either resolving or significantly reducing problematic supply chain issues within your chosen sector/industry.

The issues in the supply chain are multidimensional. It is starting from currency instability to the government policies. The food supply chain is undergoing significant challenges in most of the countries. The government policy in the United Kingdom has led to the current situation of low farming within the state. Ever since the United Kingdom joined the European Union, it's farming sector took a significant hit. A country such as Italy and Turkey took advantage of such a policy. As a result, the farming sector of these countries has become very strong. Most of the European country depends mainly upon these countries for most of the food demands.

Every country produces some amount of food for its citizens (Eakin et al., 2017). However, the amount of food, which is being produced are not satisfying the overall demand of the country. It is mostly observed in the developed nations with high currency value. Countries such as United States, China, Japan and many more are importing a large amount of food from developing country such as India, Indonesia, Pakistan, Bangladesh and many more. The resources within the country play a major role in food import. Countries like United States and Australia have the necessary land, water and food-producing climate for most of the food that are consumed within the country. On the other hand, countries like Afghanistan, Iran, Mongolia and many more specialize in one particular type of food.

Even though United States dollar has become one of the major currencies for exchange, the Barter system is still practiced in the food industry (Beattie, 2015). It is an old method of exchanging goods with another mode of commodity. The cash money or the currency stays absolutely absent in these methods of exchange. Every country in the world wants to have a larger presence in terms of GDP and per capita income. However, having United States dollar as a method of exchange is not helping the countries. Nations such as China and Russia want to dump the dollar system and adopt the Gold as mode of exchange. Because after world war when France wanted the gold, which was promised by United States in terms of its Currency, was not paid the value of United States dollar fell significantly.

Even though World Trade Organization was created to boost the trade system of the entire continent, countries such as China and Russia are not following its policy (Atkins and Bowler, 2016). There need to be a stronger and more efficient organization that can monitor and pass down strict policy. The standardization of currency exchange is necessary however; it should not belong to a country. The exchange rate of currency needs to have stability. Having instable currency brings major complication within the system. Proper and fair tax system must be engaged by all the country to protect the local producers of the country. The developing nation must have some amount of flexibility in terms of securing its interest compared to the developed nations. Trade dispute must be resolved and barter system must be removed in order to have a healthy and prospering economy.


Another significant issue that is affecting the supply chain management process is the inability to maintain safety as well as the quality needs of the consumers. The pressure on the manufacturers in order to distribute as well as produce high-quality products that are safe to consume is increasing (Singla et al., 2017). Some of the most general issues that influence the quality of a product or hamper the safety of the food products include poor warehousing and storage issues, delay in appropriate transportation, industrial sabotage ad inclement weather conditions. Due to these reasons, the number of food product recall cases is increasing significantly. It is observed that a product recall is extremely expensive and often generates irreversible damages to the reputation of the brand. Therefore these issues are critical for an organization especially within the food industry where consumers are highly inclined towards reputed brands for security reasons.

In order to overcome this issue, manufacturers are required to select the best raw material for their manufacturing process. After this, they will have to implement the most appropriate production method as provided by the international standards, and they are required to test in order to prove that their process is adequate and in compliance with the international standards. The manufacturer must choose an accredited testing laboratory that makes use of current and latest measuring as well as testing equipment in order to ensure impeccable product quality and reliable quality assurance. In addition, the packaging is an important process the company must select the right packaging material and the correct process so that their product remains fresh and safe. Lastly, the logistic company must be trustworthy that is capable and experienced in handling food products with a reputation and record in the market.


From the above analysis and discussion on the supply chain management process in the food industry, it has been outlined that changing market demands and industry landscapes in other sectors creating pressure for the food industry to change and implement a modified and innovative supply chain process that could stand globally and could enhance competitive advantage simultaneously. This study is effective in addressing current changes, needs and challenges in the food industry around the world. Through the explanation, it has been also underlined that supply chain management process varies in country to country as per the current market and consumer needs. To be precise, it is an important tool for organizations to leverage business development and competitive advantage.


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