TABLE OF CONTENTS Page 2 Executive summary Page 3 Introduction Page 4 Main supply chain issues within the Hewlett Packard-UPS case study Page 6 Strategies for the future Page 8 Conclusion 1 EXECUTIVE SUMMARY The concept of supply chain is tightly linked to the concept of collaboration. A supply chain by nature involves the interaction of two or more firms, sharing resources, risks and capabilities and jointly working to achieve higher business performance. Therefore, companies involved in a supply chain structure must ensure collaboration among their partners by applying the following interventions : - Appropriate performance measures: provides information regarding the results of the system efforts to supply chain members - Intervention of integrated policies: replace local policies that prevent the supply chain members from attaining overall profitability - Information sharing environment: to provide adequate visibility to all members - Incentive alignment: so all members' behaviour is aligned with the overall chain goal The required levels of collaboration increase as the context in which businesses are embodied become more and more complex. Most companies are going or have already gone through a process of transformation in the way they do business: from integrated companies to fragmentation of their supply chains, which leads to the need of reliance on third party specialists Both characteristics of reliance and collaboration among supply chain members involve the concept of trust. When a company trust its partner it means that the company has positive expectations about its partner's motives . If one of the members has reasons to believe that its partner is motivated only by individual success and self-interest objectives, it is most likely that reliance and collaboration will not happen and the relationship will probably end. Another trend of today's markets is the expansion of the company's activities to different countries, either because they start buying products from suppliers located in another country or because they start selling their products to customers around the world. Operating in a global context may bring many benefits to the company such as access to better quality raw materials or increase of sales; but many challenges must be overcome to enjoy these advantages because of the complexity implied in a global supply chain. And the more the complexity of the conditions that surround the relationship between partners, the more the risk they are exposed to. And more risk implies increasing needs for collaboration, cooperation, alignment and trust. The complexity of the global market is not only in the fact that many different factors affect the business, but also that these factors are most likely to change over time and space.
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart. “Wal-Mart will take responsibility for breaking down larger loads and delivering the product to other Wal-Mart stores” (Ehring 1).
Optimal supply chain performance requires the execution of a precise set of actions that are not always in the interest of the individual supply chain members, who are most often interested in only optimizing their own objectives (Cachon et al. (2003)). Optimal supply chain performance can be achieved if firms coordinate by contracting on a set of transfer payments that are design to align each firm's objective to the supply chain objective. This mechanism is termed decentralized supply chain co-ordination using contracts.
UPS’ core competency is efficient and reliable package delivery. However, over the last two decades, UPS invested heavily in Information Technology to develop its capabilities. With this new technology driven approach UPS managed to integrate UPS and client’s info systems. This business process integration benefitted both by exponentially increasing the business value, also these collaborative Info systems unlocked tremendous potential making UPS the world’s most admired company in the year 2000.
Although there are intrinsic and extrinsic risks that any organization faces. The supply center should begin focusing on the intrinsic factors to improve the SC within their organization because they are a unique organization regarding logistical efforts and the customers they serve. Improving collaboration depends greatly on providing incentives to employees for collaboration efforts, information sharing through both data and information technologies, and fostering business relationships in each
Globalization can not only affect a company opening an office in another country but it can affect a small local business as well. As the internet brings the world closer together it becomes far more likely that a business that opened with no intention of selling internationally will have customers form different parts of the world asking for their product. For instance a steel company located in Pennsylvania may suddenly find orders coming in from South American factories. How the steel plant chooses to handle this new international customer could mean ...
A SWOT analysis is a measure tool to summarize a company’s internal and external aspects. By measuring the company’s strengths, weaknesses, opportunities and threats and looking for improving solutions by using the strengths and opportunities to improve on the weaknesses and take the necessary actions concerning any threats a company can survive in today’s world market.
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
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
The Competitive Forces are: The biggest competitor is Fed Ex, and they cannot compare. UPS did 2.5 times the volume through its sophisticated delivery machine.
The paper focuses on the increased complexity of globalized organizations and methods of altering the process within the structure. Business and environment change constantly to sustain development in emerging markets and increase efficiency. Integration of relationships and processes of the world systems, help to manage local, regional and planetary balance to manage duplication of success become conceivable. The retail giant Wal-Mart exhibits its ability to transform the organization asynchronously with the increase integration of globalization.’ Wal-Mart unveils the type of integration possible between globalization, and business services as it adapts, eliminating redundancies and repetitive movement. It observes the effect and influence, propagated on business through it use of supply chains, and influence.
In all, supply chain operation management has helped many global companies in handling and distributing their products as it is a one-stop solution provider from one warehouse direct to end user. By building trust among the trading partners with effective communications would improve performance metrics both the company and the solutions provider.
• Globalization is making worldwide supply chains and subsequently physical separation is expanding between an organization and its suppliers and an organization and its clients.
The global economy has enabled customers to enjoy a buyer’s market where the company with the most competitive price possible for a product or service receives orders from customers around the world. The burgeoning world ...
International logistics requires many different options and requirements to be met in order for a company to operate internationally. It’s like a big puzzle that must be put together, in order for all the goals to be met. As described above, there are many options to consider, and sometimes what appears to be an option really isn’t. It is not difficult to hit a road block, and you must start over with a new plan. Once the logistics plan is in place, you must constantly look for improvements in order to maximize profits and goals.
Integrative strategy development is essential to successful integration of a supply chain. There are many components of an integrative strategy first a company must determine its objectives and strategic goals. These named objectives must be a focused few, with associated metrics. After a company has established its objectives, cross-functional business objectives must be established. With the establishment of cross-functional objectives, the associated team must be brought ...