Discuss about the Case Study for Leading Organisation for Purchasing and Logistics Operation.
The aim of the report is to identify the current changes in the area of purchasing and logistics. I have been working for Vesuvius Malaysia Sdn Bhd and my responsibility included managing the Purchasing and Logistics for Thailand, Vietnam and Malaysia. It is a UK owned Company and is one of the World’s leading suppliers of refractory products in the Iron and Steel Industry (Fernie and Sparks 2014). The Company works as an importer of TUBOS REFRACTARIOS and other related products in the market of Malaysia. It has been thoroughly observed that as the companies are increasingly using the supply chain in order to compete with the other existing companies in the same industry and to increase the market share, companies are reforming their logistic and supply chain management (Fernie and Sparks 2014). Logistic and supply chain management include the activities of the internal and the external stakeholders as well. Therefore, keeping a vision for change that include the stakeholders of the organisation is equally important in order to make better business approach towards a particular activity. Change management is inevitable in all organisations to match with the dynamic situation of the market and the level of competition that the organisations have to face in their regular business activities.
In order to evaluate the changes in the recent perspective in the area of purchasing and logistic, a detailed analysis will be conducted on the recent changes in the area of supply chain. Based on the findings, a number of models will be proposed that shall be implemented to improve the logistic and supply chain management of the particular Company. In addition to this, the vision and mission of the Company will be analysed that will help the organisation to compete with the changes and fill the gap to compensate the changes in the field of logistic and supply chain management. It is only after the detail analysis is made, a number of recommendations will be made that shall help the organisation to improve their business operation and to meet the changes and challenges that they face in the recent time.
Current changes in the area of Purchasing & Logistics
As stated by Sussams 2013, supply chain and logistic is a lengthy process and has many links. It has encompasses many contribution towards a business. Supply chain and logistics include distribution of materials, managing the same, inventory control as well as freight procurement that adds up to be the overall function of the supply management. In the recent time, there have been a number of evidences where the marketers are found to fight with the changing situation of the Supply Chain Management and fulfilling the needs of the business and related market process (Winters et al. 2014). A number of current changes can be highlighted in this respect:
Pazirandeh and Jafari (2013) stated that technology has driven new waves in the productivity. It is by the means of digitizing the major financial and other business processes that collaboration of organisations across the globe has been made possible. However, in 2016, the shipping practices have changed drastically as it was practiced in 1980s or 1990s. Use of unmanned aerial vehicles and robotics has changed the landscape of logistic operation (Aljohani and Thompson 2016). In addition to this, the automatic identification and data capture technology has provided the opportunity to control the shipping process and the supply chain activities. It has also been evident that there are a number of Bluetooth enable technological devices have been put into use that helped in driving accuracy and timeliness in all kinds of logistic operations.
Strategic procurement requires building of an active approach towards market building with respect to the acquisition of goods and services that are vital to an organisation’s viability. With the advent of globalisation, leadership in business is getting influenced dramatically (Dashkovskiy et al. 2013). A good leadership is thus, required for carrying out the supply chain activities and inbound and outbound logistic operations. Facing challenges regarding leadership is common in many organisation and same kinds of issues are evident in Vesuvius Malaysia. It has to be understood that logistic and supply chain covers a wider area and this calls for a leader who will be able to drive these challenges and gain competitive advantage in the market scenario (Seo 2015). Since the logistic operation requires covering a large area of operation many organisations undertake the transitional leadership in order to cope up with the situation and carry out the business activities without any hindrance.
In the recent time there has been the introduction of many online retailers like Amazon, Ebay. These companies have been coming up with new and innovative techniques to successfully carry out their business activities and fight against the increasing competition in the market (Notteboom et al. 2015). This innovation has given rise to change management within the organisation and the complete supply chain process as well. These innovative techniques have portrait significant savings on the storage of raw materials, its intermediates and the final finished products (Richards and Grinsted 2016). The innovative techniques help to gain reliability to meet the demand of the consumers and at the same time help to manage time and fairness of the presentation.
Effective communication system is the most crucial element that helps to make the logistic operation smooth. With the development of information and communication technology, the determinant factors of consideration for the logistic operation have helped to fight the intense competition of the logistic operation (De Martino et al. 2013). Logistic activities require effective communication with all the stakeholders of the company including co-workers, clients and customers as well. With effective communication, the morale of the complete business process is improved and it shows that the management of the particular workplace has higher morale to deal with the business activities (Gupta 2013). Carrying out the communication by the means of forming a team helps to achieve the goals of the organisation.
Creating a successful vision provides a sense of being in the corporate situation that will assist the particular organisation in shaping their future. With a sensible vision set by the management, any kind of confusing project is dissolved and stops the organisation to move into a wrong direction. Høgevold et al. (2014) pointed out that this vision is important to communicate with publics that shall create better ways for the leaders as well to operate in the dynamic and challenging business environment. The vision for logistic operation is important for the following reasons:
Nicolian et al. (2015) stated that a vision is created by an organisation to improve business activities that shall bring more profit to the organisation. Therefore, it is expected that the vision set for the organisation should be effective enough to target more consumers. This can be achieved by the means of designing better corporate strategies or improving the communication process with the internal and external stakeholders of the organisation (Winters et al. 2014). Therefore, it is expected that the management of the organisation should focus on designing better strategies by analysing the opportunities in the market and then coming up with better approaches to target more consumers.
It is evident that the necessary changes should be designed in the organisation to create right alertness in the business operation activities. It has been observed that there are a number of challenges that are inevitable, but the organisation must be alert to face these situations (Al-Sebie 2014). In order to keep pace with these activities, it is important to create a business strategy that will meet the demand of the dynamic market.
It has been evident that the competitors in the market are increasing. In order to keep pace with these competitors in the market, keeping a trace of these external competitors is important. Major competitors of Vesuvius Malaysia Sdn Bhd include Armada Groups of companies, Avis Pioneer Logistics, J & V Logistics and Trading and others (Fernie and Sparks 2014). Conducting market research and keeping a trace of the activities of the competitors and other rivals will help the organisation to carry out their business activity more effectively.
The vision of change should also take into consideration the basic plans to manage and execute the complete process of business operation. It is expected that the plans set by the organisation will be effective enough to fight against the dynamic situation of the logistic operation in the recent market situation (Senge 2014). The business strategies have to be framed in a way that shall cover different aspects of the business operation.
The vision and the objective of the Company should also include the leadership strategy. There should be a complete vision of change management and organisational strategy that shall be helpful for the organisation to tackle the changes that the logistic and the supply chain companies have been suffering (Vasconcelos 2015). The leader should be committed to the changing pattern and the requirement to execute various operations of the logistic activities. It has been already mentioned that undertaking a transitional form of leadership will be the best possible leadership approach that the company could undertake to keep acquainted with the recent form of business strategy (Richards and Grinsted 2016).
Adner (2016) stated that the main thing that matters is the availability of the product at the retail stores that would be easily available to the consumers. It falls under the responsibility of the logistic and supply management company to supply the same product to the respected retail stores that the consumers could get the supply of the product easily (Page and Page 2016). However, there is no doubt that there are a number of challenges that the logistic companies have to face because there lays a gap between the future and the present modes of business activity. These gaps can be identified as under:
The main disrupting agent that has resulted in the creation of major gaps in the business activity is the advancement of digital technology. As pointed out by Harris and Gimbel (2014), businesses cannot unlock its full potential if the organisation is not able to incline its business activities unless the Company has the full potential of utilising the digital technology to carry out their business activities. It is expected that the digital technology will be developing in the recent future (Colbert et al. 2016). This gap could become the most crucial gap in the operational activity of supply chain management.
In the view point of Canas and Sondak (2013), the online retailers and logistic suppliers have been found to come up with many innovative ideas to support their business activities. When these innovative approaches come under consideration of the physical logistic companies, these companies at times fail to recognise the importance of innovation. Therefore, the ability to accept changes and innovation happen to be the biggest gap between the present and the future scenario of the logistic operation.
There have been lots of developments in the storage and the inventory facility. The warehouses or the distribution centres or the stock rooms have gone under lots of changes in the recent perspective (Huth and Lohre 2014). There have been huge improvements in the storage facilities of different products and the warehouses where the products are kept. However, for some logistic companies undermining these storage facilities becomes challenging. In addition to this, the packaging of the products is another important thing that has been changed in the recent perspective (Richards and Grinsted 2016). This is another major challenge or the gap between the present and the future logistic operation.
Recent business activity requires prompt response from the stakeholders. Adoption of the quick response might prove to be challenging for the people in the business related to logistic and supply chain (Hedman and Valo 2015). Business activity has to be really fast and prompt to match the competitive approach of the other companies in the market. It has to be understood that the complete logistic operation follows a long chain of people into the business activity and communicating with each individual might not be possible for detailed business activity (Harris and Gimbel 2014).
Almost all business activity is based on e-commerce activities. People are becoming reliable on the e-commerce because this is an easier way to carry out the marketing activity. Therefore, it is expected that businesses will face major challenges in near future if they do not mould their business activities in the form to support e-commerce activities. It is expected that the organisation will also adapt certain forms of e-commerce approach to overcome the gap between the present and the future business operations (Høgevold et al. 2014).
The above mentioned situations are the major things that have created a generative gap between the present and the earlier situation of logistic operation. There is no doubt that the technological advancement has changed the way business used to run earlier. There has been inclusion of robotic and better communication technologies that has improved the situation of the business by many folds. Therefore, it falls under the responsibility of the organisation to change their business strategies as well to cope up with the recent changes and fill the gap that has been created in recent time. Considering the role of the stakeholders certain strategies should be formulated to meet the expectations of the market.
A major concern that arises at the fundamental level of the supply chain management is regarding the identification of the stakeholders. As pointed out by Al-Sebie (2014), it is one of the responsibilities of the project management to consider the role of the Stakeholders significantly. Project managers are likely to deliver the products at the right time without considering any kind of failure. At the time of mapping and implementing a project, it is important to consider a direct relationship with the stakeholders
Challenges to accept innovations
As stated by Canas and Sondak (2013), stakeholders are usually the investors of the company and they have a major role to play in determining the major business decisions and outcomes. The role of stakeholders differs from organisations to organisations but the major operation remains the same. However, in order to avoid any kind of mismanagement in the organisation it is expected that the organisation will always consider the role of the stakeholders as one of the major priority of the business operation. It is for the same reason important to keep the perspective of both internal and external stakeholders into perspective at the time of carrying out any change management.
It is necessary to consider the relationship with the internal stakeholders of the Company. Internal stakeholders include the employees, staffs and other important persons at the higher authority that include Board Members, CEO and others (Northouse 2015). Traditionally, it was regarded that managing the internal stakeholders is easy but in the recent context, there has been considerable challenges that the leaders have to face due to internal stakeholders. Although they are not the one who directly contributes to the business of the organisation, but by the means of these internal stakeholders, the business activities becomes successful.
Role of the important stakeholders can be mentioned here:
Employees: Changes related to communication method or the digital technology has to be addressed by the employees of the organisation (Vasconcelos 2015). In case, if the employees are not able to cope up with the changes, it is expected that they will be given proper and adequate training regarding the particular issue that they can adapt the changes easily.
Board members: It has to be understood that the board members and the management is responsible for formulating any kind of change in the policies of the organisation (Canas and Sondak 2013). Therefore, in case of adapting any policy for the sake of organisational change or any other inputs, the board members have to put input in shaping the change.
Other staffs: The involvement of other staffs of the organisation is equally important to give a proper shape to the strategies formulated by the organisation. Changes related to the leadership approach or the technical alteration should be informed to the internal staffs of the organisation that they remain aware of the changes (Richards and Grinsted 2016). In case of any operational hindrance, the staff members should be active enough to resonate against these changes and cope up with the business activities.
The consumers also impact the logistics and the supply chain. An active approach with respect to the acquisition of goods and services has to be made by the organisation. Although purchasing is a separate entity of business, but it fall under the logistic and supply chain activities as well.
Consumers: For the change activities that have to be undertaken in the organisation, consumers might not play an important role in shaping the organisational activity but consumers are the most important stakeholder of an organisation. In case of other logistic companies and online retailers, the consumers hold great importance but the same cannot hold much importance in case of this particular organisation (Høgevold et al. 2014). However, their importance cannot be denied and the business strategies must be shaped according to the needs of the consumers as well.
Suppliers: In order to expand the business activities, the suppliers also play a crucial role in any kind of change management. Inclusion of digital technology or better communication in order to achieve better result in the entire business activities, it is important to include the suppliers in the change process (Canas and Sondak 2013). Changes in the technical and the digital means of business activity has to be implemented in the process of business operation.
Competitors: The competitors of the organisation cannot play a significant role in shaping the business activities but understanding the business activities of the competitors is important. The innovative and e-commerce activities of other organisations should be traced on a regular basis and on the basis of findings, certain changes might be made.
In order to incorporate the changes in the organisation, it is expected that both the internal and the external stakeholders will be included in formulating the basic changes in the operational activities of the organisation. If the internal stakeholders have to be identified who holds the greatest importance in formulating any kind of change in the organisation, it can be said that the employees and the members at the higher authority plays the most significant role. However, in addition to this, the external stakeholders are rationally important for the organisation at the time of reviewing their business strategies and policies.
Recommendations and Conclusion:
With detailed analysis, it has been observed that there have been dramatic changes in the recent logistic and supply chain management. It has been found that the capacity of the major logistic companies has increased by many folds due to the impact of communication and digital technology in the contemporary time. It is for the same reason, important for the organisation under discussion that it should consider certain strategies to improve their logistic operations and compete with the other organisations in the market. A number of factors have been highlighted in the paper that included the involvement of digital technology or changes in the communication process of the organisation. It has also been observed that if the leadership strategy of the organisation is considered, it has to be said that considerable changes can be easily made on the leadership strategies. Since, the logistic operation involves a long chain of people, transactional leadership can be the best possible leadership approach that the organisation could undertake.
It has also been found that the internal and the external stakeholders of an organisation hold equal importance at the time of coming up with any kind of changes in the business activities of the organisation. It has to be understood that the demand of products and the needs of the consumers have changed drastically. In order to match the demand of the market, an organisation has to come up with certain policies that could help them to keep pace with the changes. In this respect, understanding the view point of the internal and the external stakeholders is important. In addition to this, it has been found that the role of the internal stakeholders is more important at the time of framing any organisational changes. With the increase of capacity and demand driven models, changes are inevitable. It falls under the responsibility of the management of the organisation to think of better ways to formulate their business strategies to improve their business.
Vision for change and its outcome
With the detailed evaluation, a number of things have been identified that requires changes and thus, it is recommended that the organisation shall undertake to improve their business operation. In order to match with the increasing competition of the market, it is indeed needed to come up with better strategies to fight against the intense competition. These recommendations can be formulate here:
Supply chain includes both the retailers as well as the consumers. It is for the same reason, important to frame the supply chain strategy keeping the perspective of these stakeholders in mind. In order to undertake any kind of reinventing strategy, change management is inevitable. It is expected that the organisation will come up with basic strategies that will be initiated at the organisation and will benefit from the change. Many companies are coming up with better formulation in their business activities to improve their service and create better opportunity for the internal and external stakeholders to deal with the business operations. Therefore, it is highly recommended that the supply chain strategy should be reinvented.
There are many situations when the leaders have to face complex and ambiguous situations. It is advisable that in order to get over such situations and conflicting views, the leader should seek and reflect counselling of the situation and try to get the best outcome. In addition to this, it is very important to carry out a transitional leadership practice, when the leadership role can be easily transferred to any other person who can be eligible enough to handle the situation. There is no doubt that a better leadership approach will benefit the organisation in many ways. The business operation should be flexible enough to give priority to the employees and other people at the management level to provide flexibility in the business operation. If this instance is acceptable by the organisation, it will be very fruitful for the organisation because in that respect, the chances of prompt response increase by many folds and the business activity will prosper.
In order to let the work go on smoothly, proper communication and involvement of people in the complete business process is indeed important. Therefore, it is also recommended at the same time that the communication strategy used by the organisation should be appropriate enough that people get involved easily. This will reduce any kind of dilemma that might occur at the time of logistic operation. The main aim is to complete the supply chain activity with the less possible mishandling as possible. In order to support the communication activity, it is recommended to use advanced technology and other techniques that will facilitate the communication activity of the organisation.
It is expected that with the above stated recommendations, the company will prosper in their business activity.
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