Factors Affecting Supply Chain Transparency - An Australian SME Essay.

Topic: Factors affecting Supply Chain Transparency- an Australian SME Case study

SVSR PTY LTD is a Sydney based SME operating two distinct value streams; (1) sewer venting and (2) mini crane hire. The project is predominantly focused on the sewer venting operation. SVSR engineers, manufactures, supplies, installs and repairs sewer venting systems throughout NSW, QLD and VIC. The focus is on reducing odour- generation and corrosive gases from sewer systems. This reduces corrosive damage to wastewater assets, eliminates community odour complaints and keeps asset maintenance cost to a minimum. The customer base is diverse and includes water agencies, regional councils, construction companies as well as private residential property owners and developers.

The objective for research team is to support the company with the investigation for a suitable IT systems capable of driving transparency into internal and external processes.

The report is focused towards understanding the challenges that affect the operations of a Sydney based small and medium sized enterprise named SVSR PTY LTD. The company primarily deals in sewer venting facilities and mini crane hire services. The problem issues that the project will focus towards concerns the sewer venting operations of the company. The sewer venting facilities that are provided by the company focuses towards many essential facilities such as manufacture, supply, installation and repair of sewer pipelines systems. The company handles issues such as odor complaints of communities, reducing damage to sewer pipes due to corrosive gasses that are present. Mainly it is up to the company to safeguard the effective usage of the wastewater management systems to ensure their sustainable usage. The various issues that affect the effective functioning of the operational aspects of the organization are found. The study is focused towards the effective analysis and providing subsequent solutions to the identified problem factors. It is important that the most important issues are evaluated towards gathering effective implications.

Business organizations require to maintain high levels of transparency among their interconnected systems in order to ensure smooth business operations. Roeser and Kern (2015) defines business process transparency as the process of making relevant business data to all the concerned department so as to ensure clarity and dynamic decision making. Today companies extend the process to their stakeholders to gain their contribution and support towards the business initiatives. The literature review would explore the three concepts namely, process transparency, supply chain transparency and role of information technology in maintaining this transparency through the lenses of SVR PTY Ltd which is a sewer venting and mini hire Crane Company.

Process transparency or business process transparency in the process of business operations which ensures transparency in the different departments which enables smooth flow of information between departments. Vom Brocke et al (2014) mention that business organisations are collection of departments and maintaining of transparency in between these departments in order to aid appropriate as well as timely decision making. They in fact mention process transparency as an important component of the business management. Transiency between companies create sense of trust and ethics among the departments. Recker and Mendling (2016) though do not contradict the pervious authors, adds that the importance of process transparency is not limited within the company. The process transparency also comes into play while dealing with the external stakeholders as well. Hosseini et al. (2016) mentions that business organisations require to communicate immense amount of data both within and outside the company. This is where according to the authors, stakeholder management comes into play.

Process transparency plays a very crucial in management of external stakeholders. Schnackenberg and Tomlinson (2016) mention that external stakeholders have very significance on the business since are able to influence the latter by their actions like purchase of goods. The authors further mention that business organisations are dependent on external stakeholders like government, customers, investors and suppliers. The government makes laws which industries have to comply with. The government plays the key role of entering into bilateral relationship with foreign countries and enable companies to expand. The government which collect taxes from the business organisations and provides them with tax concessions which boosts the business of the latter. Azennoud et al. (2017) contribute to these roles of the government as a key stakeholder by mentioning that for some organisations government bodies are one of the most important primary stakeholder or customer.  Sewer venting firms fall into this category and serve sewage management bodies of local governments bodies. Similarly, the investors also contribute towards the growth of the limited firms by investing in their shares. Bull et al. (2017) point out that the analysis of the external stakeholders clearly points out that the former requires accurate business information to take appropriate decisions towards the companies. For example, the since the sewage venting firms are required to maintain their infrastructure to ensure proper treatment of harmful gas and gaseous chemicals which continuous corrode sewage pipes (Teodoro, Zhang and Switzer 2018). It is evident that the firm require continuous capital which they use to acquire and manage their venting plants and pipes. Thus, this requirement acquisition necessitates them to maintain transparency while providing information to the investors so as to enable them to take appropriate investment decisions. Thus, this analysis shows that process transparency plays a very important role to manage and protect the interests of the external stakeholders.

Process transparency and internal stakeholders’ management:

Challenges Faced by SVSR PTY Ltd

 Process transparency plays a very significant role to ensure internal stakeholder management. Buell, Kim and Tsay (2016) mention that the management and the employees are the internal stakeholders of a business organisation. The apex management forms the business strategies while the employees execute them. For example, as far as sewer venting firms are concerned, the lower level are directly in touch with the clients like private housing complexes which use sewer venting systems. The lower level employees communicate the requirement of clients to the departmental heads who ultimately communicate the same to the apex management. The apex management forms strategies to set yup sewer venting systems within these housing projects. It can be pointed out that the apex management need to take into account several criteria like cost and area of the housing projects. Thus, the lower level employees of the sewage companies are required to maintain transparency while communicating customer expectations to the departmental heads. Similarly, the departmental heads are required to maintain transparency while communicating the client information gained from lower level employees to the apex management. The apex management in turn is required to communicate strategies and instructions transparently and clearly to the middle level managers who in turn should communicate the same down the hierarchy. Thus, it can be inferred from the discussion that process transparency is a dual responsibility which has to be met by both management, departmental heads and employees.  SLappe and Spang (2014) in this respect point out that process management can also be related to another important organisational process, strategic human resource management. Albrecht et al. (2015) contributes to the opinion of SLappe and Spang (2014) by mentioning that strategic human resource management enables organisations to manage their employees and align the latter with the organisational goals. A deeper insight into the process of SHRM shows that it stands on transparent communication of employee policies between the organisation and the employees. Al-Jabri and Roztocki (2015) throw light on the importance of process transparency and mention that transparency of outcomes of business operations as well as strategies enable business organisations create a stronger image among stakeholders. Similarly, process transparency enables the management bodies of the business create a clearer image among the employees.

A leaf can be taken out from the work of Schnackenberg and Tomlinson (2016) to mention that supply chain transparency is an important aspect of smooth business management. This is because the supply chains provide companies with their supply of raw materials which the latter uses to make products. Thus, in order words transparency in supply chain have deep implications of business. Touboulic and Walker (2015) in this respect mention that a strong supply chain attributes business organisations with variety of raw materials at economic rates. The steady supply of raw materials attribute business organisations with a uninterrupted production of goods and services. This incessant supply of goods enables the companies meet customer demands, thus generating revenue for the firm. Buell, Kim and Tsay (2016) can again be reiterated here that lower level employees who form points of contact between the company and suppliers. The lower level employees have to communicate accurate information from the suppliers to the company and back to the suppliers. Bernstein (2017) mentions that process transparency in the not only required to be maintained with the suppliers but also with related departments within the same organisation. For example, the if there is a shortage of supply of a certain raw materials which is likely the create temporary shortage of finished goods containing the raw material, the supply chain manager should inform the other departmental heads like production and marketing. Thus, the marketing can inform the distributors of the product about the temporary shortage. The company would be able to create an ethical image among the distributors due to this transparent communication of the temporary shortage of the product. The company can also approach the distribtors to sell more amounts of certain to make the loss the former is likely to incur due to its inability to market a particular product on temporary basis. Thus, the discussion can be closed by mentioning that supply chain transparency encompasses both upstream and downstream of the supply chain (Flyverbom 2016).

Importance of Business Process Transparency

Information technology plays pivotal role in process transparency. Citron and Pasquale (2014) lend a perfect opening to the discussion by mentioning that process transparency stands on IT to a great extent. This is because transparency is largely dependent on maintaining continuous communication with stakeholders. The business organisations are expected to maintain a continuous communication with their stakeholders about the plans and strategies. Schnackenberg and Tomlinson (2016) lend the opinion of the previous authors by using the term ‘organisation-stakeholder relationship. This means that the business organisations are required to maintain transparency with both external and internal stakeholders which is very challenging considering the diverse interests of the stakeholders which the former has to satisfy. Kizilcec (2016) specifically points out that this transparency is a challenge for national and multinational level companies due to their need to satisfy immense numbers of stakeholders. IT enables these companies transmit information between stakeholders and maintain transparency. For example, the companies involved in sewage venting systems hold meetings between the geographically distributed branches on cloud and teleconferencing. Similarly, they can communicate with the government by sending mails while social media platforms like Facebook and Youtube provide base to them to communicate with customers. Kizilcec (2016) points out in support of the previous author that companies can create extensive official websites using IT features to serve and maintain transparency among multiple stakeholders. The customers can gain information about products while the investors can get information about financial performances from respective tabs. Thus, it can be established on the basis of this discussion that IT enables companies to maintain process transparency. Ghosh (2015) opposes this idea that IT always supports process transparency. He points out that issues like poor management, outdated IT systems and poor internet access as well as coverage poses transparency issues. Powles et al. (2016) mentions that some companies lack KPIs to measure their IT systems while others are resistant to changes. These companies do not update their websites and emphasise on centralised operations. Thus, the official websites of these companies lack information which consumers and investors require to take decisions. Fink and Anderson (2015) further point out that some companies tend to resist changes and retain their manual reporting. Thus, information technology does not always ensure process transparency.

The research philosophy that has been used for the research is positivism. This philosophy considers a research subject from a positive and evaluative point of view. The philosophy focuses towards gathering knowledge about a given subject matter that is factual (Lewis 2015). The essential gathering of factual data helps towards the better analysis of a subject. The data in regards to an identified problem is gathered through effective observation. Moving forward the data is interpreted through reliable means in order to understand the deeper implications that can be gathered from the findings. The study has focused towards the same and has used positivism as both an analytical standpoint and a guiding principle towards essentially understanding the subject. The problems that have been identified with the business operations of the company have been analyzed and discussed effectively through proper positive research framework. Positivism have helped towards the proper evaluation of the topic as the problems were effectively analyzed through the positivist approaches. The data collection has been qualitative and a deductive approach has been used in order to effectively compliment the philosophy of positivism that has been used in the work. The research has used a single significant research logic, the various aspects related to the subject have been properly explained and reasoning has been used in order to analyze the various problems related to the functional aspects of the organization. The extensive use of factual evidences such as charts and graphs have been done for the study. The study has been focused towards gathering the most important implications.

Supply Chain Transparency and Role of IT

The research has been focused towards the philosophy of positivism. Thus, a deductive research approach has been used in the research. Deductive approach is based on factual premises and their relevant implications. This kind of research focuses more towards understanding a general topic with regards to its general implications. However, the general identified aspects are tested through a specific topic (Smith 2015). The problems are identified based on the significance of the problem concerning the wider implications that can be generated through the analysis of the topic. The deductive approach does not depend on untested assumptions. Rather strong assumptions are made concerning the subject matter. The generalization of the topic happens and moves towards more specific assumptions. The data collection technique normally associated with deductive research is quantitative data. The research has thus, focused towards gathering effective quantitative data in regards to the problems identified with the demand, supply and control of work flow with regards to the focus organization. The study takes into consideration hypothetical evaluation of situations. The focus is towards the falsification or verification of existing theories (Smith 2015). The major problem being analyzed through the study is that of operational management. Hence, the study has focused towards gathering essential evidences for the validation of effective organizational management theories. The theories have been tested in accordance with their utility towards solving the identified problems of the research. The implications have been generated in accordance with the deductive analysis of the subject. Whether the conclusion is at par with the intended solutions has been discussed.

The research is based on case study analysis and evaluation. A case study concerning the operational problems faced by an organization has been used to understand the significant elements associated with organizational management. The research has considered the usage of descriptive research design. This is mainly because the research is focused towards the effective quantitative analysis of the subject matter. Thus, the research has been made to focus on effectively describing the present situations that are affecting the focused organization. A case study has been considered for the research that has necessitated the usage of descriptive research. It has helped towards the effective presentation of information that is available from the case being considered (Panneerselvam 2014). Moving forward the descriptive research design has been used towards the presentation of the problems in the background of the existing views in regards to the best practices concerning operational management within organizations. Thus, a problem has been presented and analyzed in order to understand the best practices that can be used towards solving it. This research design has been used as it is best suited for the effective qualitative analysis of the given subject matter. The case study being considered necessitated the usage of theoretical elements that can be effectively used towards solving the problems. It is important to understand that the descriptive research design will help towards effectively integrating the various parts of the research and connections between different aspects being considered for the research can be established towards the better presentation of the research (Carnall 2018). Descriptive research approach have contributed greatly towards making the research extensive and efficient at the same time.

Internal and External Stakeholder Management

The data that have been considered for the research are secondary. The research is qualitative and effective data have only been gathered through the secondary sources. Primary data gathering have not been considered for the research. The majority of the data gathered for the research have been provided by the case study being considered for the research. The rest of the data have been considered from other secondary sources. Majority of the secondary sources from which the related data have been gathered consists of journals, books, articles and at times other empirical previous researches. The previous researches if consulted depended on their relevance to the subject. Hence, majority of the researches if consulted were in regards to organizational or operational management essentials. Moreover, the previous researches consulted were empirical in nature. However, majority of the other secondary information sources have been journals, articles or books. The secondary data have been gathered from the most credible information sources. Moreover, essential care have been taken to make sure that the literatures consulted are relevant to the times. Most important present day research or research articles that are not more than a few years old have been primarily considered for effectively bringing forward the research. The qualitative information sources have been used to shed lights on the management principles, theories and practices. Qualitative information have helped towards providing more informative and effectively analyzable data in regards to the subject.

The following are the findings from the above discussion:

Organizations face a number of limitations in regards to their operational management due to various irregularities that are present at the ground level management order. Thus, essential limitation and challenges have to be identified and subsequently tackled effectively in order to facilitate the smooth flow (Pernot and Roodhooft 2014). The problems that SVSR pty limited face while managing various parts of their functionalities have been established. The identified issues are concerning the control of demand and supply, the process flow and control of productivity. These are essential aspects that govern the all-round performance of organizations. Finding solutions to these issues can help other organizations working within the industry to optimize their own productive functions.

The most important challenge elements that affect the functioning of SVSR enterprise have been identified. The challenges are related to the crucial aspects of its business operations. The effective solutions that can be provided through better analysis of the identified issues is the primary focus area of the study. It has been observed that the organization has no control on the demand. Thus, it cannot make effective business forecasts. There is no proper hierarchical structure with the CEO relying on a single general manger for everything. Concerning demand the company does not seem to have optimally effective inventory functions. The company has only a single supplier with no back up staffs. The company has to depend on just-in-time supply management that is inconsistent and can cause future problems. The communication with regards to inventory flow with the suppliers is not effective. The company has not considered investing on innovation due to financial limitations. Various job responsibilities are vested on one person and there is much difficulty in establishing proper control over the functions. Moreover, there is no significant IT frameworks to optimize functional productivity. Although there is good team work the decision making functions are not evidence based.

Significance of Process Transparency in Management of External Stakeholders

The study can be used as a guide towards understanding the achievable solutions regarding similar problems in the future. The organizational perspective towards management of essential functions can be enhanced through the research. The organization being considered can develop better and more effective organizational progress paths in the future by working according to the recommendations that have been made.

Organizations have to maintain effective coordination between their various functions in order to maintain their smooth and effective functioning. However, it has to be remembered that limitations can affect the important business functions and can result in the failure of business for an enterprise. Hence, it becomes important that all the operational aspects are optimally considered towards creating a smooth flow of productive functions (Kim, Asada and Hirai 2016). The study can help to provide essential solutions to some of the major issues concerning operational management that they face on a regular basis.

The various best practices have been assumed for the study. The major limitation has been the unavailability of effective primary information from the organizational staffs.

The process transparency is not a standalone process and is closely related to several other processes and theories. Business organisations require maintaining transparency while operating in the market. They require satisfying interests of several stakeholder groups like governments, customers, investors and suppliers. Hence, it can be pointed out that while maintaining transparency with the external stakeholders, the management has to follow stakeholder theory. Again, while managing transparency among internal stakeholders, strategic human resource management plays a key role. Again while exchanging information with customers the companies has to maintain customer satisfaction theory. It can also be pointed out that the companies also follow knowledge management system while maintain transparency. Thus, it can be inferred that process transparency comes into play several other theories.

The entire study points out that the transparency in the operations are dependent oon several factors like size of companies and financial power. The transparency maintenance in companies is dependent on several factors like financial power of companies and their technological expertise. It must also be pointed out that multinational companies require to maintain higher level of transparency. For example, they have to serve customers, government, investors and suppliers both in the home countries as well as host countries. The multinational companies as a result hold transparency an important component of their market operations. Thus, they install advantage technological infrastructure like cloud computing and teleconferencing systems. This IT expertise enable them to integrate their business information from all their markets to form transparent decision making. Their strong presence on social media website enable maintaining transparency among customers regarding their marketing mixes. However, there are companies with very weak IT maintenance. These companies, usually small firm instead of maintaining transparency, prefer resisting to changes. They do not maintain their IT standards and even their official websites. They do not provide accurate information to stakeholder groups like investors and customers.

The concept of business process transparency is closely linked to ethics and sustainability. Business organisations are required to maintain a transparent image have to operate in ethical ways in the market. They have to reveal crucial data like financial information, product information and even their future business strategies. They are bound to publish their information on public platforms like newspapers and stock exchange websites. This publishing of information enables companies to create a transparent image among the stakeholders. The investors consider this information to make investment decisions. Similarly, Customers customers use the product information to make purchase decisions. The business organisations, especially the listed companies in order to maintain in supply chains maintain separate dedicated tab for suppliers. The suppliers can obtain all the information they need to join the respective supply chains of the companies. Similarly, the suppliers can also get payment updates and invoice status. The official websites of companies also provide information to distributors. It can be pointed out that maintaining transparency before customers and investors generate revenue and capital respectively, thus rendering business organisations financial sustainability. Providing complete information to suppliers and distributors enables companies to acquire raw materials and sell goods in the market respectively. Thus, it can be pointed pointed out that transparency is linked closely with ethics and sustainability.

Significance of Process Transparency in Management of Internal Stakeholders

The study on business process transparency is very biased because it presents business process transparency in a bright light but hardly visits the darker side of transparency. It is generally accepted that companies boost their stakeholder support and sustainability by being transparent. However, it is not always true and in fact companies have to pay heavy prices for their transparency and its benefits. The study does not reveal the challenges and issues which transparency bears for the companies. The companies in order build their transparent images are required to publish confidential data like future business strategies online. This gives opportunities to hackers and other unethical groups steal the data of the data of the companies. The money laundering groups can utilise the data of the company to extort money to satisfy their won unethical ends. There have been reports of duping company documents to gain undeserved disadvantages. Moreover, hackers can gain access to financial information about companies and take steps to extort money from the financially strong companies. Moreover, publishing confidential information on the official websites like future business strategies give scopes to competitors to make similar products. If competitors succeed in launching the copied version of the product before the pioneering company, the latter has to scrape all its previous new product development plan. Often these incidences leads to heavy losses and the company concerned lose shareholders’ supports. Thus, excessive transparency results in losing of business information to competitors which ends up costing the company highly. Moreover, the need to maintain well updated and technologically advanced official website is very expensive. This is because websites of companies also play the roles of ecommerce portals. They are connected to the product strategy on one side and third party companies owning the payment gateways on the other. Moreover, the companies in order to cut costs have already started outsourcing their website maintenance. Thus, in reality. in order to maintain transparency using advanced official websites, companies considerable control over their own websites. The company often have to share confidential data with the firms owning the gateways and the firms maintaining the websites. This sharing of data places the companies before considerable risk of losing data. Thus, process transparency places companies before considerable business risks which should be considered.

The discussion above reveals the following facts:

The companies find it difficult to drive their process transparency since it is expensive. Maintaining of process transparency lead the companies to direct immense capital towards technological up gradation without deriving any direct benefit. The multinational companies can amass huge wealth to beef up their technology to communicate with their geaographically dispersed operational units. However, the medium and small scale industries have difficulties in acquiring the immense capital that acquisition of advanced technology calls for. It can also be pointed out that the management bodies of small and medium sized companies are less concerned about stakeholders’ interests. They do not interact with stakeholders like customers and suppliers on regular basis. This creates a transparency gap between the stakeholders and the companies. These companies also do not embrace changes like installation of automatic communication system and prefer to use manual systems. This gradually creates a gap between the market trends like new customer trends and the companies. This gap of transparency have detrimental effects on the small and medium scale businesses as they lose their customers to their multinational counterparts. The former start incurring low profits or losses which ultimately makes them unsustainable. The ultimate outcome of this lack of transparency is either dissolution of business or acquisition by multinational companies.

Companies should outsource their website maintaining services to third party firms. This would enable the SME’s to curb their huge website marinating costs. The small and medium scale companies lack the capital required to beef up their information and communication structures. They can first concentrate on creating a transparent line of communication with their existing customers to push up their sales in short run and generate revenue. They can then redirect a part of the revenue to strengthen their technology. They should hold meetings with the shareholders and financers. This would enhance their transparent image and enable them to more support from the latter.

Conclusion:

In conclusion it can be said that the organization is in need of significant improvement concerning its functional activities. It is important for the long time productive operation of the company that the operational standards are improved. The findings suggest that there is a definite need for making effective changes in leadership. This can serve to make the operations easily manageable.

As discussed earlier, there is a great need for the effective management of demand and supply functions. Moreover, the management needs to consider the deployment of more than one levels of managers. The hiring or more people can solve the greater part of the problem concerning the operating environment. The discussion has helped to understand the importance of effective inventory management through strong consideration of the demand and supply oriented aspects of an organization. The study has essentially identified the most important factor that has contributed to the problems. The hiring of dedicated professional managers are necessary to enhance the flow of work throughout the various operational levels of the SVSR pty Limited. It becomes much important for the effective functioning of the enterprise that the essential roles of the various managers and workers are communicated to them thoroughly. The division of responsibilities have to be complemented through effective coordination. It has to be remembered that effective organizational management can help towards establishing strong flow of work throughout the organization. The company should also consider having dedicated teams of analysts to ensure better future demand and supply forecasts. The findings have pointed towards good opportunities for the company to evolve and improve its productivity greatly.

The research limitations of unavailability of quantitative data like surveys and interviews can be considered for improving similar researches in the future. The case that has been considered can be effective towards similar researches in the future. If the essential opinions of the workforces and the management can be considered in the future researches, wholesome and extensive researches can be undertaken. The results can be used to effectively enhance organizational performances across the corporate spheres.

The study from some limitations which could be covered in future studies. First, the entire research throws light on the advantages of the process transparency but hardly delves into the challenges it poses before SMEs. It is clear that the entire paper is applicable for multinational companies since they have to resources required to acquire a powerful ICT set up to maintain transparency between themselves and their stakeholders. Secondly, the paper makes it appear that transparency always ensure stakeholders’ support. However, in reality total transparency is an unrealistic concept. The business organisations in fact, protect their business secrets fiercely. Any sort of breach of this secrecy can attract strong legal actions from the side of the respective MNCs.

The above conclusion and at length discussions give rise to the following recommendations which SMEs should take into account while forming their business strategies:

Business process transparency suffers from several limitations like requirement of continuous investments towards the advancement of technology. SMSs should give priority of creating satisfaction among their present customer base to generate the revenue they would allocate towards setting up a ICT to enhance transparency.

The SMEs should ensure that their data bases are safe from hackers and share information very selective. They must protect the ownership of the shared information using IPRs and take strict actions against any breach of their data secrecy.

The SMEs should seek help from multinational companies or consult external bodies to beef up their technology. They should use public relations to promote awareness about their future business plans and products. They should proactively communicate with stakeholders to maintain a transparent relationship with them. They should also train their employees to maintain transparency while dealing with clients and customers.

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