1. Discuss the purpose of the Supply Chain and explain the impact of Supply Chain decisions on the success of the Organisation.
2. Illustrate innovation in online business models and communications approaches.
3. Explore and analyse Best Practice in Logistics and Supply Chain Management.
1. For a company of your own choice:
A) Analyse the relationship between Supply chain management and logistics management.
B) As an entrepreneur or a logistics manager, assess the significance of an effective logistics management function in achieving customer satisfaction.
2. What do you understand by an ERP, analyse how an ERP can help the chosen organisation to improve its customer satisfaction, while reducing its cost, with a focus on e-commerce. Provide detailed analysis and support your answer with examples in relevance to your chosen organisation.
3. The chosen organisation wants to reduce its logistics cost, suggest and analyse different best practices, which could help the chosen organisation to achieve its objective of cost reduction.
Concept of Supply Chain and Logistics Operation
Supply chain and the logistics operation are essential parts of the business operation. However, organizations face utmost complexity while managing the supply chain operations. There are various dependable factors that make it difficult to manage. Those dependable factors are like logistics operation, relationship with the suppliers, market forecast, and others. Every single dependable factor is challenging for its different level of complexity (Govindan, Soleimani and Kannan 2015). This assignment also takes into account the enterprise resource planning (ERP) system which is another very important aspect of business operation. ERP can be highly advantageous especially to remain competitive in a highly volatile market (Leon 2014). To understand the concept of supply chain and logistics operation, White Stuff has been selected. White Stuff is a UK based retail company that started its operation in the 1980s. Since then, the company has progressed much and had done notable business (Whitestuff.com 2018). The assignment is purposefully aimed at understanding the concept of logistics and supply chain with the help of few practical examples.
Supply chain management and the logistics management are related to each other yet carrying different meanings altogether. Logistics management is a part of supply chain operation where companies hire or approach to a third party company which is specialized in offering the various kinds of transport means. An effective management of logistics requires a good track of goods movement. The tracking, on the other hand, is indeed complicated. Supply chain operation is a much bigger concept than this. It facilitates the management of supply and demand. Moreover, it involves not only the flow of goods but also keeps a track of market forecast, relationship with suppliers, service providers, and distributors (Brandenburg et al. 2014).
Logistics are hired for receiving raw materials from suppliers. It is also being hired to outflow the manufactured goods to the distribution center and then to the market (Alftan et al. 2015). An effective supply chain operation can help to improve the market forecasting capability which is necessary to avoid material wastage. This may also help organizations to become cost-effective. Supply chain operation is also responsible to build up a good relationship with suppliers which are necessary to reduce the bargaining power of suppliers and also to enhance the reception of quality materials (Alftan et al. 2015).
The main concept of the supply chain is to maintain a healthy flow of goods from manufacturers to end-users. A healthy flow of goods means a lot like timely delivery of goods in market, effective relationship with suppliers, good control on logistics operation. When these things are combined with few technologies, it produces an effective movement of goods in the supply chain. Those few technologies may include but are not limited to like Just in Time (JIT), Efficient Customer Response (ECR), and Electronic Data Interchange (EDI) (Chin, Tat and Sulaiman 2015).
Challenges Faced by Organizations in Managing Supply Chain Operations
The logistics operation is responsible for receiving materials and to deliver it to the customer-end. The process looks much simpler; however, the operation is much more critical. It is critical as in most cases organizations especially the small and medium size (SMEs) companies depend on third party service providers for the operation. An effective logistics operation can help to attain customer satisfaction as they will be able to receive goods on time (Seethamraju 2015). In addition to this, logistics operation is also responsible for receiving materials from suppliers. A delayed reception will mean a delay in the manufacturing process. Moreover, this will also affect products reaching to end-user. The significance of effective logistics management can be understood from the harmfulness that a late delivery to end-users will cause to the brand. Such harmfulness is as follows (Altamony et al. 2016):
- Customers will lose trust as their requirements have not been fulfilled. They had expected a timely delivery of their required goods; however, things did not happen as expected.
- It affects the market values and will also allow sufficient time for others to utilize the opportunities. Moreover, there will be a loss of specific customer base as a result of other brands offering the same products but within the expected time span.
- It may also affect the business profitability as few other brands may utilize the time gap produced due to the failure in delivery.
Enterprise resource planning (ERP) is a software platform that provides a one-stop solution to many tasks. Such tasks include but are not limited to like human resource, manufacturing, finance, services, supply chain, procurement and others. Basically, it integrates several functionalities at just one platform (Chofreh et al. 2014). This is beneficial from several aspects like data on different functions can be attained at one single database. This helps to enhance the visibility, efficiency, and analytics across the various operating domains of a company. This may help to access the real-time information across all the departments. Moreover, it enables a data-driven business which will be more effective and productive as well. A data-driven business enhances the analytical capability which is necessary to enhance the competency level (Chofreh et al. 2014).
Enterprise resource planning (ERP) may prove to be an effective option for White Stuff. The company is being able to maintain its successful streak ever since its inception in the 1980s. They have continually focused on offering a diverse range of clothes to customers. With exceptionally good performance even in tough times, the company has proved its potentials. However, the growing business may also bring a number of challenges which may produce complexity to handle the business effectively. White Stuff needs to avoid any such circumstances to happen. Nevertheless, database management will be an effective move in this regard which itself can efficiently be managed through enterprise resource planning (ERP). Enterprise resource planning (ERP) can play significant roles in improving the business efficiency of White Stuff in following ways (Leon 2014):
Benefits of Enterprise Resource Planning (ERP) System
- Enterprise resource planning (ERP) may help to integrate different working domains like design, manufacture, financial, customer service, distribution, and sales. The integration will reduce the pressure of seeking several departments differently instead it will provide an effective data management on just one platform. Moreover, different functions can be tallied and that also with relatively easier efforts.
- ERP may also be fruitful for White Stuff in regards to meeting the different requirements like lower prices of products, better quality of goods and real-time delivery of goods.
- ERP helps to access the actual database enabling one to get the correct set of data without any flaw. Moreover, data management will improve and hence, the decision-making of the case company will also get better.
- It is secured and also provides a quick & reliable access to a set of data. ERP can prove to be a real time-saving factor for White Stuff.
- ERP will also help to standardize the process of manufacturing. Moreover, the case organization will be able to get a standardized version of manufacturing for different techniques. Hence, this will improve the service quality.
- ERP also helps to improve the business process flow which is good for improving the fulfillment process. This may also effectively reduce the inventory loads and hence, will reduce the overall operational cost.
- By providing real-time tracking of inventories, it allows users to have a widened view of forecasts. Moreover, White Stuff will be able to have an enhanced view on forecasts. The accuracy will be attained through real-time information and facts. This is much more advanced and useful as well than just creating educated guesses.
- Importantly, it also provides education on seasonal demand shifts. Additionally, it also provides information on order patterns, lost sales, stock-out dates, others pattern and excess orders. These all can be analyzed in real-time and provide an enhanced control to the management of case study organization.
The usefulness of ERP in regards to White Stuff can be understood from an example. ERP has produced effective results when being implemented to the US-based ‘Custom Profile'. They were able to improve the inventory control. They were also able to have an improved forecasting capability which also simplified the capacity planning and budgeting. It also resulted in an enhanced warehouse management with improved capabilities of tracking. It had also helped to streamline shipping. It then had eliminated the manual format of record keeping activities in ‘Custom Profile’ (Miranda et al. 2016).
Potential Impact of ERP on White Stuff’s Business Processes
ERP on being integrated with e-commerce in context of ‘White Stuff’ will bring the following benefits (Seethamraju 2015):
- A better control over the business like an easy administration of financial data
- A global expansion will also become possible as the integration will allow a convenient access to taxation, documentation, and labeling
- An efficient elimination of data discrepancies and human error
- It will cut down the inventory and the operational costs which is very important keeping in mind that it is vital to understand the consumer behavior and accordingly manage the inventories, so that, no failure happens in regards to real-time delivery
- Customers will be able to get transparent information on their searched items. Moreover, customer experience will get better.
The case study organization can reduce the logistics cost through various methods like the one by giving preference to FCL (full container loads) over LCL (partially loaded container). This is both cost-effective and time-saving as well. This will help to get a specified space and hence, will attract fewer customs delays (Miranda et al. 2016). Cargo insurance will be another key suggestion for ‘White Stuff’. Outsourcing the logistics operation is another important strategy that enhances the cost-effectiveness and increases the business efficiency. Moreover, case organization will be able to access to skilled professionals by outsourcing the logistics operation (Miranda et al. 2016).
To conclude, it can be said that enterprise resource planning (ERP) can be a good move for case organization ‘White Stuff'. They have been delivering good service since the 1980s. They have been rock solid even during the recession times in the retail industry. However, the growing business may significantly bring complexity to business handling like the data management of various working domains. Such complexity can be managed if ERP is implemented as a centralized system. This will improve the existing business and also enhance the chances for an improved e-commerce service. Moreover, business will become cost-effective and will be much in control of ‘White Stuff’.
Alftan, A., Kaipia, R., Loikkanen, L. and Spens, K., 2015. Centralised grocery supply chain planning: improved exception management. International Journal of Physical Distribution & Logistics Management, 45(3), pp.237-259.
Altamony, H., Al-Salti, Z., Gharaibeh, A. and Elyas, T., 2016. The relationship between change management strategy and successful enterprise resource planning (ERP) implementations: A theoretical perspective. International Journal of Business Management and Economic Research, 7(4), pp.690-703.
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), pp.299-312.
Chin, T.A., Tat, H.H. and Sulaiman, Z., 2015. Green supply chain management, environmental collaboration and sustainability performance. Procedia CIRP, 26, pp.695-699.
Chofreh, A.G., Goni, F.A., Shaharoun, A.M., Ismail, S. and Klemeš, J.J., 2014. Sustainable enterprise resource planning: imperatives and research directions. Journal of Cleaner Production, 71, pp.139-147.
Govindan, K., Soleimani, H. and Kannan, D., 2015. Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future. European Journal of Operational Research, 240(3), pp.603-626.
Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.
Miranda, M.Q., Farias, J.S., de Araújo Schwartz, C. and de Almeida, J.P.L., 2016. Technology adoption in diffusion of innovations perspective: introduction of an ERP system in a non-profit organization. RAI Revista de Administração e Inovação, 13(1), pp.48-57.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning (ERP) systems in small and medium sized enterprises (SMEs). Information systems frontiers, 17(3), pp.475-492.
Silvestre, B.S., 2015. Sustainable supply chain management in emerging economies: Environmental turbulence, institutional voids and sustainability trajectories. International Journal of Production Economics, 167, pp.156-169.
Whitestuff.com. 2018. White Stuff | Clothing, Accessories, Gifts & Homeware. [online] Available at: https://www.whitestuff.com/ [Accessed 4 Mar. 2018].
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