Today for large multinational corporations (MNC) to build or retain their competitive advantage requires effective methods in managing the global supply chain in order to assess their raw resources, inventory supplies and factory productivity. MNC look to global sourcing for several reasons including: scarcity or high cost of local raw materials, low cost of labor in developing countries, and to increase market share into new geographical areas. Effectively managing the global supply chain is quite literally the lifeblood of an MNC that produces goods to be sold around the world.
Building an effective global supply chain involves integrating and coordinating common materials, processes, designs, technologies and suppliers across worldwide buying, design and operating locations (Trent, 2005). Managing global supply chain poses many challenges which will be examined including cultural differences, language, regional and governmental laws and regulations, and design and integration of global information infrastructure (GII). Additionally, risk assessment of possible disruptions in the supply chain will also be reviewed.
Dealing with Differences in Culture and Language
Every large MNC has within itself a defined culture, which was developed by top-level leadership (Schein, 1985). It is the responsibility of top level leadership to manage and at times modify cultural values within the organization to better adapt to changing environment, for instance moving into a different geographical area with differing cultural values (Schein, 1985). Leadership must effectively manage both language and culture in order to maintain efficient flow of raw materials, assembly, and product shipments throughout the supply chain. Managing is...
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Just as there are cultures in larger human society, there seem to be cultures within organizations. These cultures are similar to societal cultures. They are shared, communicated through symbols, and passed down from generation to generation of employees. Many definitions of organizational culture have been proposed. Most of them agree that there are several levels of culture and that these levels differ in terms of their visibility and their ability to be changed.
In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. The objectives of these organizational divisions are always different and conflict with each other’s objectives. . Marketing puts a higher emphasis on high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization---there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such an integration can be achieved.
As the world is changing at an incredible pace (Kotter & Cohen, 2002b), the way leaders approach change varies widely (Black & Gregersen, 2008). No organization is immune from the impact of globalization. Organizations must increasingly cope with diverse cross-cultural employees, customers, suppliers, competitors, and creditors. In its infancy, a business culture reflects the characteristics of the organization’s most dominant personality, the leader (Bohl, 2015). The leader’s vision of what the business culture should be is often a cultural paradigm in their heads, based on their experiences in the culture in which they have grown up in (Schein, 1983). Culture is an abstraction, yet the forces that are created in social
The organization has had to ensure that it has retail stores in many countries globally and website options in more than 100 countries. The company further enhances access of online stores in more than 37 countries which is accessible all the time and people are able to access the services regardless of their location. Globalization further affects the organization in the sense of international market management which requires it to engage in strictly global decision making. The organization’s production networks have been geared to enhancing global competition (Lüsted, 2012) .The Company is further good when it comes to seizing the opportunities available in global market. For the organization to find efficient as well as cheap means of production, it has to bargain hard so as to allow its contractors to have low profits. This mostly is consequential to the suppliers cutting corners with the use of cheap
Rao, K., and Young, R. R. (1994) Global supply chains: Factors influencing outsourcing of logistics functions. International journal of physical distribution and logistics management. Vol. 24. No. 6.
It is suggested for any organization to review, reassess any existing supply chain management or any delivery techniques, before developing a new supply chain method so that any exposure to high risk of failure is reduced. Somerset as a company taken advantage of outsourcing and transferred it product manufacturing to China leveraging low cost labor and raw material. The labor cost and other cheap material reduce Somerset overhead cost, but there is always the risk of not delivering product on time due to the foreign country political climate, change in tax and tariff and local
This report has clearly in detail described the meaning, benefits as well as the need and challenges of the RFID in the supply chain system. While RFID comes with a larger magnitude of benefits than the bar code, it’s an expensive medium and comes at a price that may be prohibitive to many businesses. On the one hand, RFID is advantageous in different areas of the supply chain and does not require line-of-sight scanning; it helps in labor reduction, enhances visibility of products and processes , and helps in inventory management. On the other hand, RFID is an expensive solution, lacking benchmarks or standards, suffers from some adverse deployment issues, and suffers from major privacy concerns. However with the ultimate aim to see the establishment of item-level tracking which should act to revolutionize SCM practices, RFID is here to stay.
Culture is “a system of shared beliefs and values that develops within an organisation and guides the behaviour of its members” (Schermerhorn et al. 2011). It plays an important role in any organisation. For instance, in Woolworths we can se...
Leaders have influence the organizational climate and can change the command culture. However to accomplish that they have to first understand the existing organizational culture within which they are operating. Culture is the behavior characteristic of a particular group. In an organizational setting, leaders have to be mindful of this cultural factors in the context that is sensitive to the different backgrounds of team members to best leverage their talent. There are three levels of culture. First level is the Artifacts. This is the surface level. It includes all phenomena that one sees, hears, and feels when one encounters a new group with unfamiliar culture. Second level is the espoused values. These reflect the original values. Third level is the basic underlying assumptions. These are what were once hypothesis, supported only by a hunch or a value, come gradually to be treated as reality. Climate, in the other hand, is a prevailing trend of public opinion or attitude in a given organization at a given time.
Lean manufacturing and just-in-time processing are great business strategies that can severely stress a supply chain. The supply chain and supply chain management is a critical operations management element for any major company to succeed and remain competitive in the global market. The supply chain is one of many pieces critical to maximizing value to the end customer and requires close management to minimize external impacts. If a company is relying on another company to supply the raw materials needed for their production line, then impacts to this other company could impact their supply chain. Careful risk management is needed to optimize performance. As a company expands into global markets and global suppliers, this risk and management challenge is multiplied. The global nature of the company could impact important activities such as transportation, funds transfers, suppliers, distributors, accounting and information sharing. Disruption to the supply chain can significantly reduce revenue, cut market share, inflate costs and threaten production. A major disruption would have obvious impacts to profit, but could have additional intangible impacts to the credibility of the company if products are not delivered on time.
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
Simply speaking, a company’s structure and design can be viewed as its body, and its culture as its soul. Because industries and situations vary significantly, it would be difficult and risky to propose there is a “one size fits all” culture template that meets the needs of all organizations” (Nov 30, 2012). Those organizations who have shared beliefs and values and have organized methods on chain of command going to have positive outcomes. This will help shaping their employees views and performances. The growth and profit of the business relays on their employees and their performances. Culture is the core which will help and encourage all different level workers. If the core itself is weak, it will weaken the atmosphere of the business. Many companies announce that they have great culture but fail to implement to the lower level of workers. The basic issue is when organization has one set of culture and thinks one culture will meet the needs of all the workers. Each business is different and each individual is unique and have different beliefs and behaviors. The culture that is right for one individual might not work the same for the others. The ideal approach in this case would be, looking at the bigger picture of diverse working environment and give importance and respect to what are the ranges of business firms to achieve the perfect culture for organization. Sometimes one size fits all will not going to fit anybody, so the organization have to keep their ideas open and value everyone’s presence respecting all of their culture for the betterment and
Organisational culture is one of the most valuable assets of an organization. Many studies states that the culture is one of the key elements that benefits the performance and affects the success of the company (Kerr & Slocum 2005). This can be measured by income of the company, and market share. Also, an appropriate culture within the society can bring advantages to the company which helps to perform with the de...
Shaping a culture is a difficult task, because many of the valuable qualities a leader might have are never taught in a classroom. These qualities can be learned through out a life of experiences. Emotional development, genuineness, and a strong character are all essential qualities if leadership in a culture-driven company is to be effective. This analysis will discuss the relationship between a successful leader and the organization cultural change in today’s business.