Globalization and Supply Chain Optimization: A Contemporary Perspective

Introduction

Supply chain management is the flow of the goods and services including all the organisational process that transform the raw materials into final products. The supply chain management is effective to improve the active streamlining process and manage the supply side of the organisations to maximise the customer’s values and gain high competitive advantage over other competitive firms in the market (Zokaee et al., 2017). The aim of the study is to identify the concept and strategies of managing the organisational supply chain network and acknowledge the practice of developing supplier’s relationship so that the organisations in the recent era of globalisation can maximise the values of the organisation through managing the distribution of the goods and services across the country.

Concepts of supply chain management and network

Supply chain and supply chain networks:

The supply chain process of the organisation is playing a crucial role in managing the distribution of the products and services to run the operational activities strategically. previously, there was manual process where for example, in 1960, the activities such as demand forecasting, requirement planning, sourcing of raw materials and purchasing, product planning, warehousing, goods inventory management, distribution planning, order processing and transportation are the major activities to manage an efficient supply chain (Sundara, 2017). In 1980s, the supply chain management system was upgraded and the suppliers are efficient to conduct material management, warehousing and packaging as well as physical distribution of the products. In the recent era of globalisation, the management practice to maintain supply chain is technologically advanced where Information Technology (IT) as well as other technical up-gradation such as using GPS system and ERP are effective to manage the efficient supply chain of the companies through automation, where the information technology, marketing and sales, finance and strategic planning are there to manage the global supply chain.

In addition to this, the supply chain network system is the process of building and modelling the supply chain and distribution network for better understanding of the costs and time associated with bringing raw materials and producing the final outputs in the market. In order to develop effective supply chain network, the organisations conduct market research for understanding the product and process of distributing and manufacturing the quality products in the market, assessing the market trend and demand of the customers, external environmental factors and other business process which in turn helps the firm to strengthen their supply chain network for managing the distribution of the goods and services of the companies in the market.

Supply chain network is a complex process which includes procurement, manufacturing and finished goods where the manufacturers try to procure the raw materials and components and manage the suppliers in the market. Apart from that, the organisations aim at establishing the factories for producing the final outputs as well as for finished good management system, it is effective to maintain warehouse and inventory and stocks in the company and manage the distribution of the products successfully within effective time, so that it would be possible for the organisations to satisfy the customers (Govindan, Fattahi and Keyvanshokooh, 2017). For example, Tesco, as a famous retail firm focuses on developing supply chain and distribution network to handle the global distribution process and in this regard the automation process of the managing the warehouse and inventory as well as distribution of the products will provide a scope to the firm to strengthen their positive in the market by delivering quality products to the customers within right time (Evans and Mason, 2018).

Importance of supply chain management:

Appropriate supply chain management is beneficial for the organisations to deliver high quality goods and services to the customers by managing the network system. The supply chain is also effective to lower the inventory and improve flexibility in managing the operational activities (Varsei and Polyakovskiy, 2017). Moreover, the supply chain management system is advantageous to improve customer service and delivers high quality services to all the consumers around the globe where the organisations become efficient to maximise their revenues by improving the organisational performance and the profitability. The supply chain network provides a scope to the companies to handle the suppliers and distributors and develop proper strategy for successful distribution of the organisational products and services. The inventory control mechanism and the automation process through technological advancement further provides a scope to the companies to strengthen their supply chain network to operate across the international markets. For example, Tesco is efficient to manage their suppliers and distributors by creating values for them through delivering high return on investment and this further gives the chance to the organisation to expand their business internationally and operate in the global retail market.

Factors for designing supply chain network:

It is necessary for the organisations to consider the factors which influence the manufacturers to design the appropriate supply chain process. The market structure and market segmentation are mandatory for designing the supply chain network, where the organisations can identify he potential buyers in the market and manage the stock so that the suppliers can deliver the final products to the customers within effective time. In addition to this, the demand forecast and over heads are also necessary where the organisations can estimate the customer’s demand and maintain appropriate stock to fulfil the customer’s expectations. Apart from that, the cost estimation and convenience cost are also other factors which need to be considered in designing the supply chain network so that it is possible to develop suitable planning to strengthen their supply chain and distribution network by managing the cost of the organisation (Zhalechian et al., 2016).

On the other hand, the government policies and political climate are also playing crucial role in developing supply chain network, where government support is mandatory to run the operational activities and distribution of the organisational products. For example, the Government of the UK is cooperative and there is political stability which further expands the scope for the retail firms like Tesco, Walmart and Sainsbury’s to expand their business by strengthening their distribution network. In addition to this, technology transfer is also another crucial factor which influences the organisations to strengthen their distribution network by utilising the latest Information technology. In the recent era of globalisation, the supply chain network is managed properly through the automation process and Information and Communication Technology (ICT) which further enhance communication among the suppliers and the distributors which in turn helps to strengthen the network and distribute the organisational products and services efficiently (Pham, Darabi and Wilmot, 2020).

Examining the supplier relationship management practice

Supplier relationship management process:

Supplier’s relationship management (SRM) is mandatory in the recent era of globalisation to retain the efficient suppliers and improve contacts with the productive distributors who are able to handle the organisational operational activities successfully. In this regard, it is a systematic approach of assessing the supplier’s contribution and influence on success, determine the tactics to maximise the performance and developing strategic approach for executing the determinations of the organisational to maximise the organisational aims and objectives (Sparks, 2019).

Key activities and challenges in the supplier relationship management process:

The organisational leader tries to develop strong relationship with the suppliers for improving trust and loyalty among them so that they can rely on the organisational leader. In this regard, the leaders try to restructure the salary and performance related pay as well as give them other rewards such as yearly bonus, incentives, and health and safety measures at workplace which further motivate the suppliers to perform better and build strong relationship in the organisational context (Debnath and Islam, 2017). On the other hand, the leader aims at empowering all the suppliers in the strategic decision making practice so that it is possible to encourage their creativity and influence them to contribute positively for making efficient solution to run the business operational activities. Proper recognition at the workplace, open communication and collaborative practice are further influencing factors which improve relationship between the suppliers and the organisational leader. There are some challenges for developing supplier’s relationship which are lack of communication and non-cooperation, internal conflicts and cultural diversity. In this regard, the organisational culture is also another key activity to develop relationship and in this regard it is essential to fulfil the economic responsibility of the firm by providing high return on investment, managing transparency and accountability, implementing organisational policies for equal treatment and no discrimination which further help to maximise the supplier’s values (Girma, 2018). The organisational leader must be supportive and directive in this context and provide training and development program to encourage the suppliers and fulfil the commitment in the organisational context.

Impacts of supply relationship management:

The strategic planning of developing supplier’s relationship management (SRM) is effective for the organisations to reduce the cost of the operations, developing appropriate strategic planning to handle the supply chain operations, where the suppliers can develop effective teamwork and distributive the organisational goods and services efficiently. The tactic of SRM is also beneficial to maximise efficiency of the distributors and the suppliers and minimise the price volatility and this further helps the companies to maximise the profit volume, where the suppliers can conduct continuous improvement of the operations and maximise the responsibility of the supplier and distributors successfully. For example, the organisation Tesco is efficient to manage the relationship with the suppliers and the leader of Tesco convey the vision tot h suppliers which is to maximise corporate social responsibility by developing green supply chain (Matriadi et al., 2019). The suppliers are also committed with the workplace and they try to develop the strategic planning of utilising the electric cars in the society for transaction of goods. This strategic decision is collaborative where the organisational leader and the suppliers try to maximise the aim and objective of green supply chain management. Hereby, SRM is appropriate for successful achievement of the organisational success, where the companies can handle the global supply chain and the distribution network and build strong bonding and corporate relationship with the suppliers so that they can be motivated and perform efficiently.

Conclusion

Supply chain management is mandatory to run the business operational activities and in the recent of globalisation, all the firms across the globe aim to develop digital supply chain network to manage the distributors and improve efficiency by online communication, tracking process and automation warehouse management. In this regard, the firms are also concentrating on developing strong relationship with all the suppliers to handle the global business operations and retain the experienced distributors for long run so that it would be possible for the companies to secure future sustainable development by managing the global business activities.

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Reference List

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