Table of Contents

Introduction:-. 1

The key drivers of supply chain performance in a complex environment:-. 1

Barriers which companies face during the implementation of new supply chain strategies. 5

Potential unexpected disruptions to complex supply chains and the resilience required to overcome these disruptions:-  7

Conclusion:-. 11

References. 12

              Business Report on Supply Chain Management

Introduction:-

At present much interest has been generated by the supply chain management for various reasons. According to the managers of the firms if the action is taken by one individual firm in the supply chain, then it will influence the profitability of the other supplier business partners under the chain. With the introduction of supply chain, the firms have now started to think to compete with the other supply chain rather than compete with other individual firms. At present, many companies have successfully implemented the supply chain concepts. These firms can compete better with each other by using an efficient supply chain (Adabi and Omrani, 2015).

The key drivers of supply chain performance in a complex environment:-

In a complex environment there are five key drivers of supply chain. These are:-

(i)                 Regularity and Compliance:-

The regulations and emerging standards have a significant impact in the business economy, as now-a-days supply chains become more global and complex. To comply with the evolving standards of the production process, a constant change is necessary in the area of labelling especially, in the area where labelling and detecting the parts and packages have a significant effect on consumers’ safety. There are different types of industries in the world which follow this key issue of regulatory and compliance. For example, Unique Device Identification (UDI), Globally Harmonized System of Classification (GHS), Drug supply Chain Security Act (DSCSA), Use of Hazardous Substances (RoHS), General Specifications or GS₁ Standards etc. Enterprises are labelling for achieving the regulatory standards (An, 2008).

Regulation of enterprises means adopting the different types of strategies like product development, marketing strategy, shipping and disposing etc. Implementation of these kinds of strategies is needed to enter in the new market and stay in the same business, to retain the customers and avoid fines etc. To meet these evolving standards labelling continuously play an important role in this case. The necessary information about the product which is transported through the supply chain is represented by the label. It contains the information about how and when it was made, how it can be handled and disposed, what should be it contained etc.  To achieve the regulatory standards, changes are made efficiently and quickly by the customers through the Enterprise Labelling solution. By this way the consumers can easily avoid the costly fines and finally incur the loss in the business (C2es.org, 2015).

(ii)               Supply Chain efficiency:-

Since, at present the supply chain of many enterprises have globally expanded and act as more complex instrument; to ensure responsiveness and efficiency throughout the supply curve, the supply chain is becoming increasingly challenging day by day. While considering a business that can distribute the products from the suppliers to the customers quickly and seamlessly, labelling act as a critical factor. To deal with the strategy of effective supply chain; companies must focus the intersection process between labelling and the evolving demands.  Safety and quality of products, lean business environments, shorter lead-times, changing market demands and the globalization of manufacturing are the examples of the evolving demand. For maximizing the supply chain efficiencies, enterprises are labelling.  If there is any error in the labelling, then it results major threat to any business.  And, if there is any disruption in the supply chain, then it can be devastating to company’s bottom line. At present, in the supply chain, there is bar-code level in every product and shipment under the modern supply chain. These bar-code levels provide the information which helps to ensure that all the products move to the intended destination at the intended speed throughout the supply chain. The labelling act as a critical component of supply chain where there exists some disruption in the areas. In this case, inventory, manufacturing, receiving and shipping act as a threat in the production and distribution process. These kinds of threats result loss of customers, fines and a loss in revenue. Business flexibility can be offered by an implementation of enterprising solutions. This also offers the variability, scalability and ac high throughput to meet the need of the customers. This helps to minimize the issues related tote supply chain. The companies can be enabling to support improved responsiveness through the solutions of enterprise labelling.  This will help to efficiently navigate the products through the supply chain (Cheng, Wen and Sun, 2015).

(iii)             Enterprise collaboration:-  

Through the supply chain, global business can contract the manufactures and the logistic providers, add value for the business partners and reduce the production costs. There is an importance of sharing the information among the companies and collectively generation of aligning process. Hence to develop the business with efficiency communication and refining information is essential. This leads to an increase in productivity and will act as a quick response to any business issues. To realize the cost-cutting strategies of the companies, revenue generating opportunities and recommendations for the productivity; the companies which share the common approach and language effectively communicate with their business partners. Labelling will be considered as the part of this business framework, when the entrepreneurs want to facilitate the collaboration across the supply chain, through developing the structure of the enterprise (Cheng, Wen and Sun, 2015).  The companies, who never try to communicate among the business partners across the global supply chain, cannot fulfil its customers’ demand. As a result it cannot take the advantage of expansion of market size and the competition. To improve the efficiency and meet the customers’ demands and to improve the efficiency of the business, labelling system plays a crucial role in generating the value from the network of supply chain. There is a tendency to create the redundancy when an individual approach to labelling is taken by the partners of supply chain (Christou, 2012).

(iv)             Business continuity:-

The man-made and natural disasters like flood, storm, fire or geopolitical unrest have an important effect on the companies supply chain and significantly affect the financial consequences of the economy. The continuous flow of goods and services to the customers is necessary without interruption in the global market through the manufacturing and distribution of the facilities. In case of business continuation, companies concentrate on the manufacturing and shipping, but overlook the labelling procedure.  Continuity of business will break if the products are not labelling properly. Due to the disruption in the continuity of the business will result a critical stoppage in the business operation, which will decrease the customers satisfaction and will increase the risk for the business in future. At a regional level global companies frequently manage the labelling. When there occurs a break in business continuity, labelling represents a significant challenge as it is difficult to shi9ft the production from the regional specific labels to another location. But to avoid the disruption and continue the business procedure the production should be labelling from one location to another (Davis, 2013).

(v)               Customer Responsiveness:-

The ability of the business to recognize and respond immediately with the changing needs of the customers is known as the customer responsiveness.  Now-a-days the customer labelling requirements are variable and more demanding. The companies should closely work with their customers to provide them the value-added tailored offerings in time to compete with current fast paced global environment. With the improvements of customers’ responsiveness, there occurs a change in customer-specific requirements. As a result, there is a change in enterprise labelling. If business fail to meet the requirements of the customers in time, then the customers will dissatisfied and will turn to other competitors. So, labelling in the business is the key factor of customer responsiveness as it drives the revenues and finds the increased level of opportuni0ties to serve their clients. These solutions of enterprise labelling under the supply chain management help the customers to provide the improved responsiveness of the customers. It also helps them to meet any labelling requirements, fulfil the customers’ satisfaction, quick response to any changes and achieve the desired revenue level (Deloitte University Press, 2015).

Barriers which companies face during the implementation of new supply chain strategies

There are different types of obstacles in the process of integrating the supply chain and in its long-run profitability and competitiveness. In the view of Chopra and Mendhl (2001) there is a number of factors which deal with the external process of integration of supply chain, lead to longer cycle time, information distortion, stock-outs, reduction in customer service capabilities and higher level of cost (Khodayar Yeganeh and Yokhaneh Alghyani, 2015). The barriers which a company faced during the implementation of new supply chain strategy can be explained as follows:-

1. 1.      Lack of visibility of supply chain:-

There is a problem related to the visibility of supply chain due to the lack of information in the market. The trading partners have to collect the data from their enterprise resource planning in the absence of the supply chain visibility. After collecting the data, it sends the data to another source where under another system; the data is shared and evaluated. In this case there is a loss in time which results the loss in customers and a higher co0st arises through the supply chain membership (Golińska and Andrés Romano, 2012).

1. 2.      Silo Mentality:-

Sometimes the impact of the firms’ actions on the supply chain and on the long-term profitability and competitiveness are not considered by the firms. According to Wisner et al (2006), the cheaper suppliers focus less on the consumers’ needs and provide insufficient resources to the new products and services. As a result, the firm will create some problems related to the delivery timing, cost, quality and the other customer services problems which act as hindrance to the supply chain. According to Cachon (2005), the silo mentality is an important barrier in supply chain management of several companies. Among different internal departments, there also exists some silo effects. The firm must strive to align the supply chain goals and to provide incentives to the firm to overcome the silo mentality effect. While considering the impact on the entire firms’ profit and on the supply chain functional decisions should be made by the entrepreneurs. To meet the overall supply chain goals and integrate the process internally and externally the performance reviews of the managers must include their abilities (Gurnani, Mehrotra and Ray, 2012).

1. 3.      Lack of trust:-

With the silo mentality and lack of information visibility the successful process of integration requires trust among the business partners. Trust can be treated as the major stumbling block in the supply chain management. When each participant builds reputations among the other business, it earns trust. If there exist trust among the relationship of different employees, then there is a possibility of occurring the win-win situation. If there is lack of trust, then a problem will arise to the supply chain management system. For example, there is collaboration between Wal-Mart and Spalding in the retailing business which results a win-win situation for both the companies as there is a better understanding between the Wal-Mart and Splendid regarding their capacity and cost. But, since it is the human nature to not to trust each other, there will be a problem related to the supply chain. It is the own best interest of the firm to trust on each other and share the information to achieve the success in the supply chain management system. For example, in case of Boeing, there is a trust barrier among the suppliers of the company which results the obstacles to the supply chain management system (Hodges, 2012).

1. 4.      Lack of knowledge:-

In case of integration of extended supply chain, technology plays a crucial role at present as the companies are now moving towards the collaboration and the integration process for the years. According to the survey on 122 executing practicing supply chain management, 43 percent said that the lack of knowledge create the obstacles in the supply chain within the own organization among them 54 percent agree with this opinion for their trading partners. If the firms want to work together successfully, then the managers of the firms and their trading partners should acquire the full knowledge about the business activities of the firms. The firms are differ in their culture, trust and process of knowledge in such a manner that it can successfully manage their supply chain and can increase the capabilities of themselves and their business partners (Ittmann, 2015).

1. 5.      The bullwhip effect:-

In case of integrating the supply chain, there are some activities which cause the bull-whip effect to the business. The bull-whip effect is the variability increase in moving up the supply chain from the consumers to the grocery stores to distribution centre to the central warehouse to factory. According to Lee et al (1997) there are four major causes behind the bullwhip effect which act as the great obstacles to the integration process of supply chain. This four major causes are demanding updating, order batching, price fluctuations and rationing and shortage gaming (Kashmanian, 2015).

Several theoretical models have established to overcome these obstacles in the supply chain management. The Rational exchange theory is one of the famous theories among them which indicate the nature of the exchange relationship between the entities (Khodayar Yeganeh and Yokhaneh Alghyani, 2015).

Potential unexpected disruptions to complex supply chains and the resilience required to overcome these disruptions:-

Potential unexpected disruption to complex supply chains:-

In the present era of globalization several new risks have been brought through the outsourcing of the firms. For example, possibilities of opportunistic behaviour for the parties with different goals, dependency on the quality of services and materials from the vendors etc. The “intellectual property risk” is another factor which act as a key concern in the business environment by shifting towards the knowledge based economies (Literature, 2015). So there arises disruption in the particular part of the global supply chain. This kind of disruption is related to the risks associated with the cost-efficiency trends. The lack of buffers and extra resource across the network results the disruption in the economy. There were different segments in the traditional supply chain. These traditional supply chains lead inefficiencies as in normal use they are remained unused. Now-a-days many companies have adopted the policies like JIT and lean to eliminate or reduce these buffers. As a result there is a significant decline in the operating cost. Companies can also be benefited from the value of money saving. This situation occurs in case of the storage facilities (Mazzola, Bruccoleri and Perrone, 2015). During disruption, the adverse effect of any event can spread faster through the supply chain and it does not leave a little buffer time for the companies that they can look for the alternative solutions to handle the problems related to the supply chain management. Moreover, the decision making process for handling the disruptions problems may be significantly slower due to the outsourcing and fragmentation of management in the chain. In the present era, many companies are facing the challenging situation with the increase in risk factors in the supply chain as they now have to operate under more risky business environment. On the other hand, there is a limited supply of the resources which are needed to manage this risky situation (Mckinsey.com, 2015). There are mainly two types of problem related:-

1. A.    Implementation of lean philosophy:-

There are very few types of resources in the economy including the finished goods work-in-process and there are limited amount of raw materials and inventories are available to monitor the impact of the disruptive events (Mejía and Velasco, 2012).

1. Outsourcing: –

Many countries have lost the control over their resources and visibility their supply chain by outsourcing. The companies supply chains are greatly affected by the loss of control and the visibility. These help the companies to detect the level of disruption and limit the degree of freedom of the supply chain. In case of more risky business supply chain, the amount of available essential resources is very small to monitor the disruptive events (Olson, 2012).

There is growing vulnerability in the supply chains due to the explicit outcome of the paradoxical situation. This growing vulnerability has a great impact on the companies’ performance.

The resilience required to overcome these disruptions:-

There are different resiliencies which are used to overcome the disruption in the supply chain management. There are different types of supply chain in the business procedure. Each supply chain is of different forms and performs different types of activities. The activities of the supply chain can be classified into two major forms i.e. one is the “Pre-disruption” activity and the other is the “Post-disruption” activity. To minimize the effect of the potential disruption, some activities and measures are taken by the companies beforehand (Olson, 2012). Despite all the efforts, the disruption can happen and its influence on the supply chain should be controlled to bring the normal situation. To manage this supply chain risks there are two views. They are:-

                   I.            Proactive view or predictive view: – The Proactive risk management used to take the precautionary measures to control the disruption.

                II.            Reactive view: – The reactive risk management react once an event materializes (Qi, Shen and Dou, 2013).

Despite of the several classifications in the risk management, the supply chain disruption should be controlled in a systematic way. Such as:-

Identification should be made to recognize the potential disruption and invest the resources which are essential to manage the supply chains.

When disruption happen; use of available resources is essential to manage this disruption.

Both of these perspectives are important and must be addressed for the effective managing disruption. Many problems and disruptions can be avoided by investing in the risk prevention measurements. Disruption management process will be very slow if there is no plan and investment in the necessary resources in the advance stage of the production process. Since, some disruptions cannot be known before hand, the firms don’t want to invest in the advanced stage of the production process. Therefore more attention should be paid to the advance level of the production process to handle the disruption effect (Special Topic Forum on Power in Supply Chain Management, 2015).

In case of the well-designed plan, sometimes disruption occurs on the basis of separate issues and as a result, it requires different sets of capabilities. That is having available resources and well-designed plan is not enough for the companies to avoid the disruption problems, as the companies must have the knowledge about the proper and timely use of these resources. This capability of the company is known as the predictive intelligence and real-time supply-chain configuration or the smart supply chain. This kind of supply chain help0 the companies to better utilize the available resources to handle the disruption. There are some limitations related to the managing disruption while applying the static plans. Therefore the plans should be developed on the basis of seldom review (Tachizawa and Wong, 2015).

Hence, whether the steps to manage the disruption are taken by the firm before or after the production process, both have the same importance in the supply chain management issue. These two processes should not be considered as mutually exclusive, rather there should be coordination between these two processes to achieve the best performance in supply chain management (Wong and Shi, 2015).

There are mainly six types of risk treatment methods in this regard, such as:-

1. Flexibility: – It is the ability to rapidly adopt the significant changes in the supply chain and take different positions to better respond to the abnormal situation. There should be multiple interchangeable resources for the flexibility in supply-chain management. To handle the risks different types of flexibility approaches should be adopted, such as supply base flexibility, flexible product configuration, flexible manufacturing process, flexible transportation etc (Yeo et al., 2012).
2. Redundancy: – It is treated as the expensive method to control the disruption as it is used in case of occurrence of some unanticipated events. There are different types of redundancies in case of supply chain management, such as extra inventory or redundant stock, backup supplier and overcapacity.
3. Incentives/Controls: – In the supply chain management, the potential disruption should be reduced by the higher level of supervision or control. There are also some incentives which are generally created to involve the different actors in managing the disruptive event in the supply chain management system. The controls may be of different types in the supply chain management system, such as security improvement, demand management, suppliers’ qualification screening, performance based contracting and organizational aspects (Yeon-Duk Kim, 2015).

1. Cooperation: – The joint agreements or actions by the several actors in the supply chain are known as Cooperation which is opposite to the unilateral control actions. There are two possible cooperative strategies, such as information sharing and collective response planning.

1. Risk avoidance: – For some disruptions the risk level is so high that despite of the pre-planning and arrangement of resources, risk cannot be avoided. In this case the products should be moved into the safe location to avoid the risks.

1. Risk transfer: – It is used to shift the negative consequences of a risky factor to another entity outside or inside the supply chain. For example, insurance (Wang et al., 2012).

Conclusion:-

The firms can compete effectively and efficiently with each other in both the domestic and the international market through the emergence of supply chain management. To mechanize the supply chain process, information has played a major role through coordination and collaboration process among the supply chain partners. This has resulted a competitive pressure for the manufacturers and also for the distributors to become more responsive to the consumers’ needs and retailers. This pressure leads to reduction in cost in the manufacturing firms. It also helps to minimize the time and improve the overall operating competence. In this case the manufacturers are forced to manage the supply chain in a better way to bring the improvement in the manufacturing efficiency and in the logistic operations. The remaining reactive is related to the change in the customers’ demands and the market condition. These pressures are handled by the increasing global relationship among the suppliers, manufacturers, retailers, distributors and also by the consumers.

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