Category: Supply Chain Management

Abstract

It is the 21st century and business is booming. Over the past 10 years, there have been quite a few revelations and introduction of a number of concepts in the field of business and its functioning. One major concept is of Supply Chain Management. For the longest of time, the concept was just in theory and barely in practice. However, the previously unnoticed concept has now found its way into majority of the existing businesses in the world and is ever growing and being innovated for the best of its interests.

In this paper, we intend to find out the scope of supply chain management in the current business market, focusing more on its effects on e-businesses. For e-businesses we are trying to understand how supply chain management has benefited them to grow and the various aspects required for the smooth working of the system. We also try to understand how industries perceive the globalization and integration of supply chain management. To understand the extent of the concept of supply chain management being implemented in e-businesses. Also to understand if the growth of supply chain management has helped the further growth of the business. As this paper will be based on secondary data the conclusions of this paper will be based on studies made by other theorist.

Introduction

As globalization blooms in the ever-changing business environment, it is essential for businesses to adapt to the changes, to survive in a competitive market. It also gives a greater opportunity for businesses to bring out their innovative side into the field. With the help of globalization, it is getting more and more attractive for businesses to generate innovative ideas in order to run business both national and international. Supply chain management was an overlooked concept by many and many more were ignorant of its deep impact on one’s business. Supply chain management has created considerable interest in the past few years, for a variety of reasons. Managers in many businesses are now mindful that actions made by one chain leader will impact the productivity of all those in the chain. Rivalry has gone beyond company-to-company competition, to supply chain to supply chain. Supply chain management (SCM) refers to the administration of products, knowledge and funds across the whole supply chain, from distributors to the end customer by production and delivery. It also covers after-sales support, which reverses flows such as consumer return handling which box recycling and recycled items.

E-business has made its way right through all the big companies with such ease due to the wide access of customers and huge cost savings. It is so much easier for them to keep track of the happenings within.

While before it was just the transfer of good from the manufacture to the customers. Companies gave more attention to the customers and left the rest out, ignoring the long way it came from and defect or benefits that can be altered or benefited from. Now companies work together with manufactures help in product developments and distributions. Now, even supply chains are quite competitive, making it very important for companies to maintain loyalty to their manufactures at every step of the way or someone else might just swoop in and take it away.

In this paper we try to understand the increasing growth and demand of supply chain management in e-businesses. Also to understand the benefits companies has made by utilizing the concept of globalization and integration

Significance of supply chain management

One of the major advancements that have come into the picture apart from the business strategies would be the mass shift of production externally. It has grown in such an extent that business rely on external resources more that the external recourses. Revolving around merely the company’s core competencies is not good enough as for the growing demands of customers. The supplier market plays a huge role in running most businesses nowadays. As having a good chain of suppliers provides you with a better hold on better resources, making your products more desirable to the customers. Many centric operating business operations-product creation and growth, administration of resources and equipment, distribution and production were taken over by suppliers. As a result, a growing emphasis has been put on handling the external supply ties and regulating the flow of recourse from suppliers to consumers. Such activities were represented by the term ‘supply chain management’

The supply chain focuses not only on particular roles of organizations such as sourcing, manufacturing and distribution, but also on enhancing network efficiency in both the internal and external environments. In the dynamic world of the 21st century, supply chain companies have to maintain productivity, a consistent standard of operation, rapid response and good services and products quality. Supply chain management focuses on the systematic and pragmatic strategies to demand, production, acquisition, and distribution processes.

Control is not only focused on the direct monitoring of particular companies ‘business operations, but rather on the management of all operations as part of the supply chain between interconnected organizations. Cooperation among supply chain organizations is essential for successful execution of a business. Organizations need to be conscious of their position and actions in the supply chain, and the fact that their success influences the success of the other supply chain participants. That means companies need to control the efficiency of the supply chain to maintain a competitive edge.

Growth and development of supply chain management

The growth of theorist focusing more on the concept of supply chain management can be noticed from the 1990’s. Riggs and Robbins (1998), ‘Supply Management strategies – Building supply chain thinking into all business process‘ , which puts out new ideas of the concept of supply chain management, emphasizing on efficiency of time and networking.

Logistics Product group

The concept simply means that the difference in logistically significant characteristics (e.g., product size, weight, rate of sale and supply source) requires differential treatment in the supply chain. This concept was first written about in the fore mentioned book ‘supply management strategies- Building supply chain thinking into all business process (Riggs and Robbins (1998))

This was further modified by Tyndall et al. (1998) which states To position the development of the subject, a supply chain development path is planned, beginning with isolated businesses, progressing through integrated processes (i.e. process-oriented operations) to a streamlined and transparent consumer-focused supply chain. A concept also introduced by the same authors that incorporates a high level of organizational fluidity in the resources of external agents. (Darren Hall, Alan Braithwaite, 2017).

Information Sharing

In recent year, there has been and increasing emphasis on the importance of information sharing (e.g. Barratt, 2004; Lambert and Cooper, 2000; Lau and Lee, 2000; Stank et al., 1999; Mason-Jones and Towill, 1997). In a supply chain it is very essential that everybody involved in the network is aware of all details from head to toe, as misinformation can come in the way a decision made not in favor of the business. Information should be readily available for all the companies within the chain.

Business Process Orientation ( BPO )

The definition signifies a company that, in all its thinking, emphasizes processes as compared to hierarchies with a special focus on results and consumer service (McCormack and Johnson, 2001). An inquiry by (McCormack and Johnson, 2001) was undertaken to research and analyze the connection between BPO and improved market efficiency. The findings of the study have shown that BPO is crucial in mitigating conflict and promoting greater collaboration within the enterprise, while enhancing market efficiency.

Conclusions

Among the most common issues with the supply chain is the so-called bullwhip effect. Even the minor variations in production or inventories of the final organization in the process are propagated and spread across the chain. Although each company in the chain has inadequate awareness of the needs of others, it will respond with a disproportional rise in inventory levels and, as a result, a much greater difference in demand relative to others in the chain (Forrester, 1958, 1961). Several scholars (Forrester, 1961; Holweg and Bicheno, 2002) have demonstrated that the peak of production can be greatly decreased by moving knowledge directly from the customer to the manufacturer. Another concern is that businesses still prefer to maximize their own efficiency, while missing the advantages of supply chain as a whole (local rather than global optimization). However, the ultimate productivity for each chain does not automatically contribute to global optimization (Gunasekaran et al., 2004). In addition, individual variables can be taken into account: decision-makers do not generally make flawless choices at different points in the supply chain (due to lack of knowledge or their personal obstacles) and their choices are often affected by workplace compensation programs (McGuffog and Wadsley, 1999).

What is Globalization

Globalization is the word used to describe the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information. Countries have built economic partnerships to facilitate these movements over many centuries. But the term gained popularity after the Cold War in the early 1990s, as these cooperative arrangements shaped modern everyday life.

What is Supply Chain Management

Supply chain management is the management of the flow of tangible goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.

Basic Views

Globalization has been a popular term in the business world within the last few decades. A word that started to pick up around the 1980s, globalization is the process in which businesses and/or organizations operate on an international scale and develop influence based on this.

With technology developing at an increasing rate, it is becoming easier and easier for businesses to expand their reach. But what does that mean for your supply chain? Here we discuss some pros and cons of globalization on supply chain management.

PROS of Globalization on Supply Chain Management

More than ever before, the sky is the limit when it comes to connections. With the rise of the digital age and the Internet of Things, connecting with others has become so accessible. It is easy to form and maintain relationships across the globe. Globalization has simplified the communication between business owners and clients, allowing for better transparency throughout the supply chain process.

Growth of Business

Globalization has created more opportunities for businesses to grow in all aspects. With communication being so effortless, companies can sell more, produce more and offer more choice. But growth is not limited solely to business owners. Globalization has also allowed for markets to expand and diversify. More competition stems within this growth, which promotes companies to continually think outside of the box. This benefits consumers greatly, since this boosts standards. It acts as a sort of quality control for businesses to continue to outdo themselves and strive for excellence.

With the community-like feel globalization can offer, it has allowed people all over the world to collaborate. An example of this is co-branding. Especially in fashion and design, we regularly see brands working together to release special, limited edition designs. This act of sharing and joint effort not only boost sales for each brand respectively, it also attracts a lot of media attention and promotes creative and innovative thinking.

But as we all know that every coin has two side. Same like that globalization has also its disadvantage. So here we have also discussed some cons of globalization.

Cons of Globalization on Supply Chain Management.

Possibility of Risk

When companies operate on a global scale, there’s a higher risk of supply chain being affected by external factors. Things like political uprisings, natural disasters and economic recession can have a big impact on your business. For example, political uprisings in the Middle East have made it harder for gas companies to access petrol and oil. As a result, gas prices went up as supply dropped. Business owners who operate outside of their home country need to keep that in mind and have strategies to implement when problems do occur.

Less Predictability

A growing market means more demand, which leads to a greater need for supply. This may be good for businesses in a lot of ways, but something that is often overlooked is that it also makes trends less predictable. One of the biggest contributors to this is data collection. As the amount of data increases every day, it becomes harder to analyse all of it. As a result, it becomes more challenging to keep track of trends.

Channels and problems

As the number of supply channels increases, so does the chance of errors. With more steps and destinations added in the supply chain timeline, without proper management and organization, it is easy to lose track of where everything is going. Supply chain management is more complex than ever before, therefore having a strategic ecosystem is key. One small mistake can be disastrous.

A company that had a bad experience in the past was Toys R Us. By accepting more orders than they could fill, they were unable to deliver toys for customers in time for Christmas, therefore ruining their reputation and public image. On a lighter note, a company that demonstrates good inventory management is Amazon. With so many products and delivery destinations to manage, they are leaders when it comes to supply chain.

Overall, globalization has changed the world and continues to help society move forward. Like many things, it does have its pros and cons, but there is no denying that globalization has not just changed the supply chain, but business as a whole.

As commerce and trade have become truly global over the past half-decade or so, keeping your supply chain contained within the country where you’re located has become less and less common.

Since it’s become easier to source products more economically from other countries, more companies – small businesses, mid-size companies, and mega corporations – have embraced global sourcing.

While this can result in cost savings and greater choice of materials, it also requires more intensive logistical management – and this is often where a company can run into limitations.

Thesis

Today’s supply chains have to be leaner, more efficient and more flexible than ever before. Ensuring the right materials and goods arrive at the right point at the right time. Supply chains are becoming much longer and more complex, increasing the risk of failure or disruption at any point. However, by understanding global supply chain management and outsourcing where necessary, you can help increase your product’s chances of success.

Coordinating all the moving parts of the supply chain becomes more challenging when parts of the supply chain are handled internationally. Outsourcing supply chain management to a firm experienced with dealing in other countries can be a huge help. The success of your product depends on the quality, demand, and price of your product. Here’s how a global supply chain affects all three.

Product quality can be at risk when you have a global supply chain because you can’t always monitor what’s happening in other countries. Here’s where outsourcing your supply chain management can be a huge benefit. Pivot International provides full support at all stages of the supply chain including product manufacturing through our Manufacturing Resource Planning system so you’re guaranteed a resulting product that’s top quality.

A global supply chain allows you to meet product demand in emerging markets. Once you’ve done the market research and know where the highest demand is for your product, sourcing materials globally can help you deliver it efficiently and economically. Partnering with a foreign vendor, or sometimes multiple foreign vendors, will help make selling your product in a new country much easier.

References

1. http://cmuscm.blogspot.com/2014/02/impact-of-globalization-on-supply-chain.html
2. https://www.industryweek.com/logistics/globalization-brings-new-risks-supply-chain
3. http://www.supplychain247.com/article/globalization_the_supply_chain/global_trade
4. https://www.ukessays.com/essays/business/effects-of-globalization-on-supply-chain-management.php

Logistics

Logistic initiates the overall process of managing how the resources are obtained, stored and transported towards their final destination. Logistic management involves various aspects in which they identify the various perspectives of their distributors and suppliers and moreover determining their effective and accessibility. The term logistic was initially used by the military and it is referred to as the military personnel obtained, stored, and moved their equipment and supplies. Nowadays the terms are used in every business sector, particularly in businesses that are more involved towards the manufacturing sectors. As mentioned above, business logistics basically means how the resources are handled and provided forward towards their supply chain.

Supply chain consists of producing the products and delivering the goods to their customers or considers. in-order to have an efficient and quick means of supply chain management, business must consider producing their goods in an efficient manner moreover delivering their goods as quickly as possible for their customers satisfaction and demands. hence, the methods of aviation transportation are relied upon to deliver their goods to their customers, this is due to the fact that the customers satisfactory level will increase and moreover will keep a good relationship with the business. another factor that can be considered, is the competition market where if one business’s fail to deliver on time, the customer will lose their loyalty and jump to another. therefore, choosing a delivering method that is related to aviation transportation seem to be an effective choice.

Once a business obtains effective supply chain management, it can be considered that the business is benefited with competitive advantage in their industry. This is due to the fact that effective and efficient management will create a window where it allows the operation to decrease their inherited risks when purchasing raw materials and components and forwarding their operations towards the finished goods and services. many benefits can be encountered by the business, such as;

• higher efficiency rates as the business will be able to incorporate their supply chain with their integrated logistics, innovative strategies will occur as the business will be able to predict the number of demand and moreover act accordingly. hence, the business can act in a dynamic manner towards their fluctuating economies and market, and yet know what amount of resources must be utilized to keep them in a beneficial state.
• such moves, will definitely decrease the amount of expenses required to be injected into the operation and moreover, the management will be benefited in reduced cost in terms of inventory, storage space, elimination of damaged resources, improvement of customer’s requirements and responsiveness and relation towards both distributors and vendors.
• by knowing the demand input through communication. the operations can be coordinated in relation to the increased output and efficiency, and moreover collaborating themselves with shipping and transport companies, vendors and suppliers. the efficiency rate of productivity will be increased.
• since output is increased through sophisticated management, it will also increase the business profit as they are able to produce customer demand and reduce their invalid expenses.

Boost Cooperation Level

When we’re talking about the most successful businesses right now, one of the things they all have in common is communication. In fact, when there is a lack of communication, your vendors and distributors have no idea about what’s going on. So, this is definitely one of the main advantages of supply chain management. Plus, when you also open your doors and embrace technology, you can also take advantage of the fact that people don’t even need to share the same space in order to be a true communication. The communication among the different areas of your business will allow you to have faster access to forecasts, reporting, quotation, statuses, among many other plans in real time.

The most successful businesses in today’s world have one common thing that is communication. When there is effective or continuous communication among the business stakeholders, they stay at track. If there is a lack of communication vendors, distributors, suppliers have no idea about what’s happening. Communication is definitely one of the main advantages of supply chain management.

No More Delays in Processes

One of the main benefits of supply chain management is the fact that through communication, you can actually lower any delays in processes. Since everyone is aware of what they’re doing as well as what others are doing, this will mitigate any late shipments from vendors, logistical errors in distribution channels, and hold-ups on production lines.

Enhanced Supply Chain Network

It’s not easy to maintain a sustainable supply chain management system. According to some of its advocates, one of the best ways to do it is by using a combination of lean practices (like waste removal, for example) with agile. By combining all the information gathered on the different sectors of your business will allow you to have an enhanced supply chain network.

Supply Chain Management 6 components

1. Planning – in order for enterprises to have an efficient supply chain management, they must plan and manage all the resources required to meet the customers demand in terms of product and services. moreover, the business must also determine what methods are beneficial for their operation in where they can ensure that their supply chain will be effective and efficient, additionally delivering value to customers and meet their enterprise goals.
2. Sourcing – Companies must choose their suppliers to provide their demanded goods and services in-order to manufacture their products. hence, the two parties are in a contract, in where the managers of the supply chain use variety of methods and processes to track, monitor and manage their supplier’s relationships. key indication includes the process of ordering, receiving, managing their inventory and authorizing the payments to their suppliers.
3. Making – in this aspect, the managers of the supply chain co-ordinate the different activities such as the requirement of raw materials, manifesting of the goods, quality control and testing, packaging for the shipment and scheduling it for delivery. enterprises measure their good’s quality, production output and their workers productivity to ensures that the goods that are delivered are of the required standards.
4. Delivering – this aspect is also considered and known as Logistics, in where the process involves customer’s orders co-ordination, scheduling a delivery date, dispatching loads, customers Performa invoice as well as receiving the payments. the process relies on a fleet of vehicles to ship products or goods to their customers. in-order to a meet consistency, business may outsource large parts of the levier process of specialist organization in where the products can be handled and be delivered toward their consumers.
5. Returning – if a produced goods is known and considered to be defective, the supplier must have the flexibility and responsiveness to receive their unwanted goods. additionally, the supplier must rework their defective goods or rework them to meet their customer’s demand.
6. Enabling – in-order to operate efficient, the supply chain requires a number of supports to enable themselves with the ability to monitor their information throughout the supply chain process and procedure, this will moreover assist them in regards to assurance and compliance with all the regulations. the enabling process must include finance, HR, IT, Facilities, Portfolio management, product design, sales and quality assurance.

The benefits of intelligent supply chain

intelligent supply chain management helps in reducing costs, overhead, improve profitability and add opportunities of competitive advantage for the organization.

According to the Blockchain in Trucking Alliance also known as BiTA, intelligent supply chain management is basically changing the game for traditional warehousing, retailers, consumers and employees alike.

Artificial intelligence is considered to be more mainstream as machine aided purchases, such as voice ordering and assistance like Alexa in Amazon are beginning to mature in our everyday household. Due to technology it can be considered that the era of AI assistance will likely grant businesses with benefits hence investment towards this aspect are being considered by the companies, although some elements must be analyzed before stepping towards a change.

• Fear and Poor Change Management prevent successful implementation of intelligent supply chain management.
• a typical issue in obtaining truly intelligent supply chain reflects the issue present when making any investment decision, as supply chain executives would express their concerns towards the costs, disruption to productivity, time delays and impact on data. However, the newer system has inherited capabilities in which these sorts of concerns are considered to be irrelevant.
• the technologies that are powering this intelligent system demands various connections throughout the whole system, which in hand is integral to the omni channel supply chain. the nature of this technology is intimidation as Dr, Ravi Prakash Mathur stated in Digitalis Magazine. machines are able to learn, moreover they can also disrupt the overall operations. henceforth advanced algorithm enables the continuous improvement through embedded intelligence without the disruption of operations.

How Can Supply Chain Leaders Implement Intelligent Practices?

• by utilizing big data and algorithms, the operation will improve where data such as descriptive, predictive, and prescriptive analytics data must be used in order to reduce disruptions and keep facilities operating at peak efficiency.
• Initiating the machine to learn and take hold. as the learning allows equipment to continuously self-optimize and become more efficient.
• Automate process and procedure whenever necessary or possible, as automation would reduce the amount of time needed, including labor hours, to complete a process, enhancing the supply chain.
• IoT-based systems implementation would be beneficial as they are essential to managing complex, omnichannel supply chains due to the worldwide nature of potential customers and shipments.
• utilizing RFIDto improve visibility as this method can be used to trace and track data. Through better tracking, companies can reduce costs and stay competitive with Amazon.
• refining and updating the system continuously would be a great aim to enhance the effectiveness and efficiency of their operations.

Conclusion

To conclude, it can be considered that in-order to have an effective and relying business operation, companies must include and understand the different variants mentioned in the report. this will assist them to become more effective and efficient that will provide various benefits, in terms profitability, efficiency and customer loyalty.

References

1. AIMS. 2020. Key 7 Advantages And Benefits Of Supply Chain Management | AIMS UK. [online] Available at: [Accessed 18 March 2020].
2. Hollingsworth. 2020. Best Supply Chains From Companies Around The World – Hollingsworth. [online] Available at: [Accessed 18 March 2020].
3. Investopedia. 2020. How Logistics Work. [online] Available at: [Accessed 18 March 2020].
4. Perkins, B. and Wailgum, T., 2020. What Is Supply Chain Management (SCM)? Mastering Logistics End To End. [online] CIO. Available at: [Accessed 18 March 2020].
5. Rosing, J., 2020. What Is Intelligent Supply Chain Management?. [online] Transportation Management Company | Cerasis. Available at: [Accessed 18 March 2020].
6. SearchERP. 2020. What Is Supply Chain Management (SCM) And Why Is It Important?. [online] Available at: [Accessed 18 March 2020].

Introduction

Background

Nestle is a company that was founded in 1867 by Henri Nestle in Switzerland. In 1905, Nestlé & Anglo-Swiss have more than 20 factories and have started using overseas subsidiaries to establish a sales network that spans towards Africa, Asia, Latin America, and Australia (Nestle, n.d.). In today’s modern society, Nestle is known as the world’s largest food processing company with a total sales of 88,785 million Swiss F in 2015 with a total of 435 production factories operating in 35 countries with more than 15,000 products that are sold across 189 countries. Nescafe is owned by Nestle which manages the suitable supply chain which source raw materials all over the world. The supply chain of Nescafe consists of distribution centers, wholesalers and retailers. Nestle sources the basic raw materials for instance, coffee, milk and palm oil from farmers all across the world. The supply chain of Nescafe is sustainable and environmental friendly which contributes to the development of farmers across Brazil and many other regions. Today more than 5,500 cups of Nescafe instant coffee are consumed every second with different varieties that caters to different tastes and preferences around the globe (Nestle professional, 2018). The purpose of this report is to analyze and provide an explanation about the Nescafe supply chain and to investigate the opportunities and challenges of supply chain management, furthermore this report will also provide recommendations for them.

Description of supply chain

Nescafe utilizes a system known SAP (system application and products) and its own inventory control software to regulate and control its inventories. The software allows management and control of the inventories by the managers responsible for that are, while sales officers and all the other employees are holding responsible posts. The company controls its inventories and warehouses by using its highly advanced warehouse management monitors by storing of Nescafe in warehouses that are situated all round the world. This ensures timely supply of Nescafe to the markets at affordable prices (Fichtinger, Grosse & Baker, 2015). This efficient management of warehousing and inventory has led to operational sustainably and reduction of wastage. Furthermore, this also ensures timely supply of Nescafe products of various product variants in cafes, shop and other sales centers which allow the company to cater to a huge customer base.

The efficient network of warehouses allows Nestle to effectively manage the supply chain planning and efficient performance within reduced timeframe. The company manages the orders electronically which allows it to exercise total control of the inventories and orders. The company responds to its orders within a very short time and ensures timely supply of Nescafe products to the retailers and wholesalers. The orders for Nescafe are met mostly in bulks and are packaged in the required size of packaging like boxes, jars and other methods. Nescafe is owned by Nestle and comes under the purview of Nestle environmental management system (NEMS) which aims to achieve sustainable operations (Essay, 2018). The company has made it mandatory for the suppliers to follow its NEMS policies by complying with it while working. The company is setting up new factories in places like Italy and Brazil which are capable of waste management and reducing energy consumption.

Opportunities and challenges

The supply chain issue

Even though Nestle seems to be doing a decent job in the supply chain management. There is still a potential problem that is unforeseen which poses risks that can affect the supply chain or the force majeure issues. According to the news IE Food & Beverage, (2020) reports that the CEO of global food and beverage giant Nestlé, Mark Schneider, has admitted the company has not been able to hit its ‘normal’ levels of production during the coronavirus pandemic. Mark has also indicated the logistics limitations now kicking in and also a lower employee presence as a result of illness or precautionary measures, which has introduced an enhanced safety protocol that we need to run at our plants. Therefore, we’re not always able to give it 100% of the capacity that you would have under normal circumstance (iE Food & Beverage, 2020). In addition, while a coffee’s lifespan and popularity with roasters will depend on its quality and how it’s stored, processed, dried, and handled, it can also be hard to sell green coffee that’s been in storage for 4-5 months. What this means is that the importers who’d usually supply these roasters could be stuck with an excess in product stock that they cannot sell. This will put their coffee exporters under financial pressure, due to importers and roasters will be reducing or delaying their purchasing commitments by purchasing and reserving less coffee altogether (Kanniah, 2020).

Opportunity

One of the most typical themes in the supply chain management is the notion of sustainability and traceability. The company provides the sustainability through means of more than just turning off the lights and saving water, it also means examining the long-term viability of a given supply chain. There are a number of challenges that commodity producers face, which includes, but not limited to; a lack of control over the market price or production costs of their key commodity, changes in the climate patterns, management of pests and disease, deforestation, forced labor and limited consumer knowledge of the value chain. There is a crucial link between these factors and the ongoing sustainable livelihood of the farmer. For instance, the different intersections of the economic, environmental, and social impacts of these challenges and how they are managed in a manner that provides for an equal share of the value chain, is vital to the viability of the supply chain (Fairtrade Australia New Zealand, 2016).

Recommendation

Resilient Supply Chain Practices (RSCP)

Resilient supply chain practice refers to the set of activities undertaken in a firm to promote effective management of its supply chain risk to ensure risk mitigation and a swift return to normal operations. In the next section, this study details and categorizes resilient supply chain practice into resistance and recovery approach (Park, 2011).

As it can be clearly seen in Figure 2 it displays an alternate view of supply chain resilience. For instance, in the graph below it categorizes resilience into specific different categories and areas for resistance and recovery. The graph also provides an indication for the differential respective phases for each category which are: avoidance, containment, stabilization, and return. By categorizing each area into its specific category this would allow firms you choose and select a higher capacity rather than a low capacity for both resistance and recovery, however it is also more likely that the firms will have a mixed selection of these qualities. However, in particular, with the given resource constraints and competitive factors, firms may need to choose other alternative areas that is best for them to invest limited resources (Melnyk, Closs, Griffis, Zobel & Macdonald, 2015).

An example of a hardy supply chain would be General Motors (GM). According to reports, GM frequently monitors its supply chain in order to minimize the effects of disruptions and, and allows them, to facilitate for recovery. An example of this case would be the Thailand floods that occured 2011. Despite having plants and suppliers in the area, GM experienced limited disruptions to the flow of materials because it was able to resist the onset of problems better than its competitors. When disruptions became unavoidable, GM was robust enough to quickly work through them and make a swift recovery (Melnyk, Closs, Griffis, Zobel & Macdonald, 2015).

Sustainable Supply Chain Management (SSCM)

Sustainability is defined and known as the capability to meet current demands without the need for compromising the abilities of future generations to meet their needs. This is done by linking sustainability and the supply chain through the means of management which allows the management to handle and manage a complete supply chain lifecycle. For instance, the cycle can usually begin from product design and consumption than return and disposal, with the explicit considerations of sustainable development factors such as economic, environmental, and social elements. Certified coffees are usually defined as where one of the aspects of that are considered which includes sustainability, and farming in a good-quality environment, while providing economically viable for farmers, and promoting social equity among farmers and workers. Furthermore, the Sustainable Supply Chain Management can help stakeholders within coffee supply chain network to preserve the environment, which also appreciates human and social rights, and offer customers traceable and high-quality products (Nguyen, Tinh, Sarker & Tapan, 2017).

Professional knowledge

It can be seen that Nestle controls the supply chain and inventories of Nescafe efficiently and sustainably. For instance, the strong-handed and sustainable control of the company over all the areas spanning from manufacturing to selling has allowed Nescafe to acquire its high market position. However, with the unforeseen problem it is still bothering Nestlé’s supply chain operation. Therefore, the recommendation for Nescafe is to utilize resilient supply chain practices to cope with any uncontrollable issues. In today’s modern society with the development of technology, the resilient strategy can be reinforced by The Internet of things (IoT). The IoT is integrated through RFID technology, video recognition technology, infrared sensing, global positioning system, laser scanners, and other information sensing equipment. Furthermore, in order to achieve the interconnection of the network there must be connection of items interconnection, information exchange, and communication to achieve intelligent identification, an artificial intelligence network system for positioning, tracking, and monitoring (Byrne, 2018).

Conclusion

In conclusion, Nescafe is a decent global brand to served instant coffee under Nestlé’s mature supply chain management. However, there is not a perfect supply chain system that can operate all the time since any disaster occurs would disrupt everything in the supply chain. Therefore, the alternative plan such as a resilient supply chain strategy needs to be set up to cope with any emergencies that happen at any time.

Reference

1. Byrne R.O. (2018) Supply Chain and the Internet of Things – Towards New Paradigms, Logistics Bureau, Retrieved from https://www.logisticsbureau.com/supply-chain-the-internet-of-things- towards-new-paradigms/
2. Essays, UK. (2018). Supply Chain Management Of Nescafe Marketing Essay. Retrieved from https://www.ukessays.com/essays/marketing/supply- chain-management-of-nescafe-marketing-essay.php?vref=1
3. Fichtinger, J., Ries, J. M., Grosse, E. H., & Baker, P. (2015). Assessing the environmental impact of integrated inventory and warehouse management. International Journal of Production Economics, 170, 717-729.
4. Fairtrade Australia New Zealand (2016) SUSTAINABLE SUPPLY CHAIN, Fairtrade Australia New Zealand, Retrieved from https://www.fairtrade.com.au/en-au/for-business/sustainability-in-your- supply-chain
5. Kanniah, j.C. (2020) COVID-19: What Coffee Farmers Want You to Know. Perfect Daily Grind. Retrieved from https://perfectdailygrind.com/2020/04/covid-19-what-coffee-farmers-want- you-to-know/
6. Melnyk S.A, Closs D.J, Griffis S.E, Zobel C.W, & Macdonald J.R. (2015) Understanding Supply Chain Resilience, Supply Chain 247, Retrieved from http://www.supplychain247.com/article/understanding_supply_chain_resilience/
7. Nguyen, Tinh G.N., Sarker & Tapan (2017) Sustainable Coffee Supply Chain Management: A Case Study In Buon Me Thuot City, Daklak, Vietnam, Griffith University, Retrieved from https://research- repository.griffith.edu.au/handle/10072/354927
8. iE Food & Beverage (2020). Nestlé Boss Admits Covid-19 Is Creating Production Problems. iE Food & Beverage. Retrieved from https://industryeurope.com/sectors/food-beverage/nestle-boss-admits- covid-19-is-creating-production-problems/
9. Park, K. (2011). Flexible and redundant supply chain practices to build strategic supply chain resilience: contingent and resource-based perspectives, University of Toledo.
10. Tchibo (2017). For future-proof coffee farming: Continued support for the trans­for­mation process, Tchibo. Retrieved from http://www.tchibo- sustainability.com/servlet/content/1252792/-/home/coffee-vc/strategy- management.html
11. Nestle (n.d.). The Nestlé company history. Nestle Good Food, Good Life. https://www.nestle.com/aboutus/history/nestle-company-history
12. Nestle professional (2018) A Brief History of NESCAFÉ coffee. Nestle professional Making more possible. https://www.nestleprofessional.com.au/training/brief-history-nescafe- coffee

Review

SCM utilizes a synchronized system that controls purchasing, inventory and shipping goods and services of businesses. SCM incorporates control of processes required that manages control with a centralized approach. This allows for the attaining of a robust and efficient system that manages not only the distribution of the goods and services, but also does so in a more economical manner. (Kokemuller, 2019) Supply chain management (SCM) processes are controlled and monitored in such a way that the products and services are in the proper amount, location in a timely manner. In addition, in order for the company to be successful, this attention to detail and quality control must be attained and maintained in a consistent manner. (Bowersox et al, 2013, pg. 8)

In this essay, integration of the supply chain management concepts will be demonstrated. The necessity of integration of supply chain management in regard to company viability will also be explained. Finally, how a properly configured SCM can keep the company afloat in the global environment by taking care of the client’s needs and maintaining good relationships with vendors for transportation, inventory or supply.

Discussion

Internal issues arise due to lack of cooperation within a company, from leadership to office politics to lack of technical capability, to enable such a managed structure of processing orders. External issues occur with a lack of trust with vendors on how to manage proprietary and confidential data. (Kokemuller, 2019) Additional external concerns occur when working with multiple vendors across the supply chain. “Extending collaboration across organizational boundaries is a challenging and complex endeavor. “(Florescu et al, 2019). Supply chain visibility, trust, a common vision, effective chain management processes with ongoing relationship management are all important factors to consider. “(Florescu et al, 2019).

Communication is key to internal and external process members and facilitators. Communication is improved by information sharing and regular updates between the channels and vendors. Internal relationship management have been shown to reduce waste and pollution as some of their benefits. External relationship management has worked to mitigate issues and is instrumental in use with governments (regulations), NGOs (legal demands) or customers (shape public opinion). (Florescu et al, 2019).

Three approaches to SCM

In the study of integrated supply chain management, the execution of proper SCM can be approached in a myriad of ways three of the most effective will be explored here. One of the approaches to an efficient SCM system can be derived from an effective Customer Relationship Management (CRM) system being put into place. The software or processes need to focus mainly on how to retain and increase customer relations, improve logistics of shipping and inventory so a high level of support can be attained and maintained. Finally, it needs to be a process always under review and evolving to allow the cost savings and increased availability of supply due to globalization to be effectively managed and controlled.

Below is a scale to show how CRM can be effectively implemented and how much impact can be expected. The metrics used within the scale include the following (also shown in figure 1) under various categories:

• Operational benefits- sales management, campaign management, customer service management, analysis of customer’s database.
• Benefits in customer life cycle- customer loyalty, customer satisfaction, customer share of wallet, customer recovery. (These can always be improved as some clients have left due to lack of satisfaction on the way their account was handled)
• Effectiveness- market share, sales from the target market.
• Benefits in performance adaptability- adaptation of products and services, launch of products and services.
• Efficiency- performance of applied resources. (Downtime between projects needs to be filled better. Technology resources (new CRM, better time management system) and people resources (training, multitasking) need to be of focus.) (Venturini & Benito 2015) Slide 1 (Venturini & Benito 2015)

Another approach is that of a real time and dynamic logistical approach. An improvement of the level of service that brought to the customer can be brought through e-SCM. (Salgado et al, 2011). e-SCM, makes consumption information available in real time, ends up being more dynamic and efficient than the traditional demand forecasting models, and aims to analyze how e-SCM can collaborate in maintaining adequate levels of inventory and interruptions in the supply chains. In general, traditional statistical forecasting models, based on time series and are isolated, are no longer adequate to adjust to the demand, as the tools based on these models do not update the demand in real time. This is fundamental in current business dynamics. This can help to alleviate how functions of SCM, executed successfully to the highest standards, does not approach and perform effectively in cost or execution. (Bowersox et al, 2013, pg. 10)

One e-SCM inclusive case study used a research method that involved the study of multiple cases in a segment of a chain involving a large retailer, its distribution center and a supplier of home appliances. (Salgado et al, 2011)

From the above example, the results showed that after the integration of the chain segment by the e-SCM, there was a reduction in the level of the inventory (36.8% in retail and 18% in the industry) and in inventory turnover (from 18.3 to 5.1 days in retail and from 19.6 to 3.2 days in the distribution center), aside from the variation in the interruption (from 17.3% to 2.6% in retail and from 3% to 0.1% in the case of the distribution center). Therefore, the study highly indicates that the integration of the chain through the e-SCM may contribute to the SCM’s competitiveness. (Salgado et al., 2011)

The e-SCM may assist the players in the supply chain in solving problems related to the logistics, the sales or in the study of the customers’ habits, as is the case of the CRM as shown above (Salama et al., 2009). A concept that will be given emphasis and dealt with in this research is the relationship of the e-SCM with the adjustment of the demand forecast. Today, this partnership is essential for the synchronization between supply and demand, that is, between the links of the supply chain and, consequently, for the adequate levels of inventory (Salgado et al., 2011). This is due to the fact there is a need for an adequate pace of purchases, production, distribution and provision of the supply chains which has to adjust to the speed of the final consumption. This avoids the lack or excess of merchandise, not only in retail, but in the entire supply chain. These adjustments in the chain are only possible if the information flows in real time. This is only possible through the e-SCM, for the demand forecast is done in longer periods like weeks, by-weekly or months (Lo et al, 2008). It is worth remembering that e-SCM and forecast are not excluders, but in fact, they complement each other. (Salgado et al., 2011)

The final approach, that will be demonstrated, is how the SCM methodology is advancing using shared storage and processing functionality. The future of supply chain management will be shown as it is now starting to be incorporated into the cloud (c-SCM). The concept of staging the SCM resources in the cloud are mainly for resiliency and responsiveness (SCR). The main three dimensions of SCR are the ability to deliver demand (order fulfillment time), rapid detection and reaction to supply chain risks, and flexibility to adapt to demand uncertainty (Giannakis et al, 2019).

SCR denotes the speed of the supply chain to deliver demand and it can be measured in terms of order fulfillment cycle time. If customer demand can be perceived without distortions and latencies, then companies have more chances to fulfil the orders successfully. (Giannakis et al, 2019). The visibility of information across the supply chain is, therefore, a principal dimension of SCR, as it increases demand sensibility by allowing every organization along the supply chain to access the required information with transparency. (Giannakis et al, 2019).

The inherent uncertainty of supply and demand and associated supply chain risks show the need to be able to rapidly change the product mix, volume, delivery sequence and supply capacity. The rapid detection of supply chain risks and swift decisions to mitigate them can, therefore, enhance SCR. SCR incorporates the rapid detection and reaction to supply chain risks. (Giannakis et al, 2019).

Finally, SCR shows the capability of a supply chain to demonstrate significant flexibility to adapt to demand uncertainty by restructuring its operations, reconfiguring its capabilities, or realigning its strategic objectives (Giannakis et al, 2019). Information integration amongst supply chain partners can enhance supply chain process integration and flexibility through joint planning, decision making and execution in a standard system. An IT system that can reconfigure dynamically supply chain processes according to the changing requirements can enhance supply chain flexibility. A modularized and service-oriented architecture can enhance the overall system flexibility by enabling rapid system integration and process configuration (Giannakis et al, 2019).

With the utilization of a c-SCM, a supply chain-wide knowledge learning, decision making, reaction and optimization can be achieved. There are a multitude of advantages of proposed c-SCM over conventional SCM approaches. Real-time end-to-end supply chain visibility is the most promising one, which provides a basis for demand sensibility and various other capabilities. The proposed c-SCM can improve collaboration between organizations. The flexibility at infrastructure level, application level, process level, partner relationship level and cost structure level are improved. Various exceptions, disruption risks as well as business trends can be captured in real time. The knowledge learning capability can achieve a real-time reaction. C-SCM can be beneficial for several business processes, especially for those processes that are widely dispersed or require intensive partners’ collaboration, such as logistics management, purchase management, collaborative planning forecast and replenishment. (Giannakis et al, 2019).

Conclusions

In this essay, integration of the supply chain management concepts has been demonstrated. The necessity of integration of supply chain management in regard to company viability showed us there are many ways to incorporate best practices to a business of any kind and if tailored selectively, purposefully and consistently, results in efficiency, savings and customer satisfaction should be achieved. Finally, a properly configured SCM can keep the company afloat in the global environment by taking care of the client’s needs and maintaining good relationships with vendors for transportation, inventory or supply.

References

1. Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply chain logistics management. Boston: McGraw-Hill.
2. Florescu, M. S., Ceptureanu, E. G., Cruceru, A. F., & Ceptureanu, S. I. (2019). Sustainable supply chain management strategy influence on supply chain management functions in the oil and gas distribution industry. Energies, 12(9), 1632.
3. Giannakis, M., Spanaki, K., & Dubey, R. (2019). A cloud-based supply chain management system: Effects on supply chain responsiveness. Journal of Enterprise Information Management, 32(4), 585-607.
4. Kokemuller, N. (2019, August 2). What Is Integrated Supply Chain Management?. bizfluent.com. Retrieved from https://bizfluent.com/about-6690370-integrated-supply-chain-management-.html
5. Lo, W.; Hong, T.; Jeng, R. A framework of E-SCM multi-agent systems in the fashion industry. International Journal of Production Economics, v. 114, p. 594-614, Aug 2008.
6. Salama, K. F.; Luzzatto, D.; Sianesi, A.; Towill, D. R. The value of auditing supply chains. International Journal of Production Economics, v. 128, Jan., 2009.
7. Salgado, A. P., Junior, Novi, J. C., Pacagnella, A. C., Junior, & de Oliveira, M.,Mattos Borges. (2011). E-SCM AND INVENTORY MANAGEMENT: A STUDY OF MULTIPLE CASES IN A SEGMENT OF THE DEPARTMENT STORE CHAIN/O E-SCM E A GESTÃO DOS ESTOQUES: UM ESTUDO DE MÚLTIPLOS CASOS EM UM SEGMENTO DE CADEIA DE LOJAS DE DEPARTAMENTO. Journal of Information Systems and Technology Management: JISTEM, 8(2), 367-388.
8. Venturini, W. T., & Benito, Ó. G. (2015). CRM software success: A proposed performance measurement scale. Journal of Knowledge Management, 19(4), 856-875.

Supply chain management & Logistics have direct impact at satisfactory of merchandise which impacts profit of organization. So first-class manage is vital in giving clients desire to pick out proper products than competitors. If first-class manage is not carried out nicely then wastage of products piled up leading to excessive price in production.

Faulty products

The fine of raw materials is a important issue as it can lead to defective products. If uncooked substances getting used are of low standards it is able to cause more secondary operations time & expanded labor hours. So it is important to do auditing of exceptional standards of uncooked substances & merchandise for an efficient supply chain management. via excellent manipulate supply chain managers hold excessive standards for employer.

External factors

If fine manipulate isn’t performed on organisation products can ruin & put on out throughout storage or delivery in deliver chain control. relying upon character of products price of wear & breaking of merchandise range in supply chain leading to loses. If customers are returning faulty merchandise it may harm recognition of business enterprise. best when pleasant control is executed nicely products will perform better without hazards.

Inspection of merchandise

For manufacturing organizations in which defective products influences income it’s miles necessary to look into products in fine manipulate. For clean functioning of products preservation of best manipulate is important. it’s also necessary to lessen time of inspection without loosing first-class of product by means of deliver Chain Managers.

Method for enhancing efficiency of deliver Chain first-class control in client-provider Dyads: suppliers’ attitude

This observe analyzes performance of deliver chain pleasant control (SCQM) by using grouping buyers & providers & undertaking an empirical analysis of components affecting SCQM performance from dealer’s attitude. degrees of statistics analysis had been performed: () classify purchaser & provider efficiency by way of facts envelopment evaluation (DEA) & type records consequences into a matrix & () conduct a statistical analysis to verify influential components. outcomes depict common value of group I to be higher than of organization II, even as common cost of organization IV changed into located to be lots lower than of institution III. similarly, specific elements have a substantial impact on certain organizations: agencies I & II are suffering from infrastructure, shipping of fine, skills improvement, & threat control so as; corporations II & III are likewise inspired by way of hazard control, expertise improvement, & transport of best, whereas groups III & IV are encouraged by skills improvement, delivery of great, & danger management in order.

SCQM

For SCQM compete, all supply chain members need to be progressed; as a consequence, collaboration among corporations is required . In early research, term “SCQM” was no longer used, despite fact that idea of integrating total exceptional control (TQM) & supply chain control (SCM) turned into recognized with aid of scholars. TQM emphasizes company’s internal competency, consisting of continuous high-quality improvement & worker participation, while SCM specializes in outside partnerships to make sure, as an instance, well timed delivery of associated services or products . for that reason, integration of TQM & SCM is inevitable to improve competitiveness & purchaser delight. Foster defined SCQM as a systems-primarily based approach to performance development leverages possibilities created by means of upstream & downstream linkages with providers & clients.

several scholars have advanced & empirically proven SCQM aspects to assess SCQM performance. Sharma et al. investigated product don’t forget events over 20 years thru literature & found nine essential reasons for recalls. Do’s Reis et al. in comparison performance b/w traditional QM & SCQM on meals deliver chains. thru a compilation of existing research, Hu et al. advanced six important aspects of SCQM thinking about internal & outside have an effect on components. Zhao et al. furnished a conceptual version of SCQM by means of theoretical studies & insisted corporations need to constantly decorate SCQM to satisfy customer & market demands for brilliant products. In sum, research on SCQM have regularly prolonged scope in their research from exploration of idea of SCQM to concrete elucidation of important thing components of SCQM.

Key Aspects of SCQM

Support insisted to explore important thing elements & their outcomes on company’s overall performance to complement research fields on SCQM. when you consider that educational word “SCQM” arose with 2000s by using integrating “TQM” & “SCM,” preceding literature on SCQM is confined. therefore, we extend literature review region to TQM & SCM to derive key elements of SCQM. important thing aspects referring to SCQM we focus on in this examine are infrastructure & procedure together with delivery of quality, skills improvement, & hazard management.

Right infrastructure is foundation for executing supply chain quality control. management & organizational shape were highlighted as key factors for SCQM by means of latest researches. Dubeey et al. examined influences of provider dating control & overall nice control on environmental overall performance underneath leadership & showed management positively impacts TQM implementation & supply chain companions. Yinann et al. confirmed flat shape of corporation affects supply chain making plans & corporate coordination, which, in turn, without delay enhance production capability. Kumar et al. explored critical fulfilment factors for implementation of delivery chain management, verifying organizational behavior’s, which includes lifestyle, vision, & shape, extensively effect deliver chain high-quality control.

Technique is some other key thing of SCQM. It comprises diverse elements, however we assessment 3 key elements presently under academic scrutiny: shipping of high-quality, skills development, & risk control. several recent studies have emphasized significance of first-rate control to cater to clients’ diversified needs. transport of pleasant is sequentially organized so as of product development, approval of manufacturing, purchasing, production & exam, storage, & delivery. Wang et al. studied significance of delivery chain quality control in product design, logistic process, & issuer & mass production in service supply chain management operations. moreover, Halldorrsson et al. advocated a success deliver chains are reliant on non-stop improvement of client-friendly merchandise & management first-class.

A few studies highlighted importance of person degrees of delivery of nice, including product development, shopping, & storage & transport. Oh et al. insisted assisting complex new product development procedures is critical for total production manner & maintaining product nice & Tracey & Neuhhaus argued importance of purchasing in collaborative new product-technique improvement. This position of buying illustrates complex community of relationships embedded in challenge. Dayhimm et al. asserted managing garage & delivery are crucial for managing call for uncertainty & delivery of excellent, demonstrating optimized garage control can lower overall value & boom exceptional.

The meaning of sustainability differs drastically depending on which perspective you look at it from. It could mean lower carbon emissions, green and eco-friendly or it could mean a self-sufficient system, or even could be about creating a healthy environment that is based on ecological principles. Putting sustainability within the context of a Supply Chain Management (SCM) process, more accurately a construction supply chain management process, would require immense care. To claim truly sustainable construction would mean that every aspect of the construction process would have to be accountable for it. the two main parts of sustainable and construction are the materials that are used and the methods that are utilized in the construction process. This paper aims to look into ways in which sustainability can be achieved within the construction supply chain.

The construction industry is one of the largest contributor to global waste. The world is slowly turning its focus towards sustainability, and achieving precisely that should be the focus of the industry. This would entail managing the materials that usually contribute to the growing waste, be eco-friendlier, reusable and impactful in a positive way to the environment.

This can be achieved with the use of the right materials. Materials that over the past few years have been modified by evolving technologies or materials that were naturally obtained during the times of our forefathers, i.e., old school construction materials. In order for a company to have a healthy maximization of its customer value and a gain in competitive advantage in the marketplace it requires to have a handle over its Supply Chain management. When aiming for a sustainable construction process Supply Chain management plays a large role. Nowadays Supply Chain management is built into a company’s structure as it reduces cost and time for sourcing and reducing liability risks in the process.

In order for sustainability to be part of the SCM additional developments are being introduced to the existing set of rules.

Along with performance measures like “ time quality and cost” additional factors like environmental and social measures should also be added.

When selecting vendors / suppliers, sustainable performances should become one of the key aspects, thus forcing them to change along with the times in the process.

In order to achieve this companies should organize themselves together to form an industry standard. accelerating the adoption of this process. This can further be accelerated if these changes are pushed by the government through its legislation and spending power. This is not easily done as a said all this comes with its own set of problems.

Keeping in mind all these important points in regards to the importance of sustainability in the construction industry and especially within the SCM, this paper will look at critically appraising the paper by Adetunji, Price & Fleming (2008) titled Sustainability in the Construction Supply Chain. This paper will loosely take the help of the critical appraisal tool by Joanna Briggs Institute (JBI) for Systemic Review and Research Synthesis. Some of the points in the checklist will be taken as a guide to systematically analyze the paper.

Critical Appraisal

The review question as a clear and coherent is missing in the paper. But it had a clear and well-communicated intention that was consistently followed through in the course of the research paper. The paper was well researched with no loss of focus of the intention.

The paper looked at several areas of inclusion, starting with holistic considerations of how health and well-being plays a huge role in the topic of sustainability even within SCM. It elaborates on the key differences between various kinds of sustainable practices. In Bove and Swartz article in Mckinsey and company article, titled Starting at the source: Sustainability in supply chains (2016), the quote goes on to say Sustainability factors could alter the growth projections for consumer packaged goods companies, seriously affecting their total returns to their shareholders. This quote is well illustrated throughout the paper as it describes elaborately the various facets of involvement that can bring about a multi sectorial change that is beneficial to the companies, the vendors, the customers amongst other stakeholders.

The methodology employed by the research, was a combination of extensive literature survey along with interviews of employees in certain selected companies shortlisted by the researchers, and then later analysis of the collected information. They also employed an interesting cross industry examination wherein instead of construction data, road construction data was collected and then later applied into the construction industry. Nevertheless, the data remained relevant in terms of sustainable SCM practices within both. Due to the lack of relevant research areas and other hindrances, these techniques seemed adequate given the circumstances.

The research done was based on interviews of clients, suppliers, contractors, subcontractors within the road maintenance sector and the data collected were based on their actual human experiences. Therefore, the sample is not large enough for the data to be generalized. Nevertheless, a hybrid of qualitative and quantitative methodology was used – the questions of the interview derived from literature survey. The gap for error is limited here as it is an experience based survey but the data collected was less comprehensive.

The term Sustainable supply chain management (SSCM), from the research done, has not received as much traction, especially considering this research was conducted around a decade ago, but globally the importance of sustainability in every aspect of human functioning has become of high relevance in today’s time . the point that the paper was trying to put forward and create awareness of a holistic approach towards sustainability in one of the least sustainable industry has clearly paved a path for deeper investigative studies into understanding the workings of the industry process.

Mckinsey and company has formulated a framework that allows the evaluation of processes for their sustainability in supply chains which are as follows:

Locate critical issues across the whole supply chain. This allows the companies to look at products and its supply chain individually and address the various issues that the supply chain has with regard to sustainability.

Link supply-chain sustainability goals to the global sustainability agenda. Some supply chain managers have already started to push forth a sustainable agenda to get ahead of the impending regulations.

Assist suppliers with managing impact – and make sure they follow through. This falls on the organizations.

Currently, COVID has brought about an interesting turn of events- it has ripped a gaping hole to expose the vulnerabilities faced by the companies in their supply chains (Kilpatrick, 2020). With China being the “world factory” and the trade liberalization and world in general coming to a stand-still due to the virus, companies are having to come up with urgent interventions to address their supply chain management issue, especially the ones that serve China as their primary market or ones that source their products from China. This has brought about another tectonic shift with several countries focusing on sourcing from the local vendors. The effects of this change economically is yet to be understood but companies have embraced this new shift by adapting to the times.

Conclusion

To conclude, this paper critically analyzed the research paper titled Sustainability in the Construction Supply Chain by Adetunji, Price & Fleming (2008), using the JBI Critical Appraisal Checklist as guidance. It looked at various aspects of when the paper was written to the journey it has taken throughout, to the time until the pandemic struck that brought about a paradigm shift in the processes in supply chain management.

Abstract:

The main objective of this report is to provide a holistic view of the implication of Goods and Service Tax (GST) on Supply Chain Management. It describes how the GST has impacted various Supply chain activities.

The report effectively contrasts the practices that used to exist in the pre-GST regime and the changes to which the current Supply Chain Management is moving after the introduction of GST in India. It also highlights the impacts on The Procurement, Transportation, Logistics, Warehousing, Inventory Management, Manufacturing and Retail activities of Supply chain.

Introduction

Goods and Services Tax (GST)

The Goods and Service Tax Act got passed in the Indian Parliament on March 29th, 2017 and this Act came into effect on July 1st, 2017 in India. GST is defined as an Indirect Tax which has replaced many Indirect Taxes that existed in India for long. Goods & Services Tax Law in India is also termed as a comprehensive one, multi-staged and destination-based tax that is imposed on each and every value addition. Multi-stage means that there are multiple levels an item goes through along its supply chain i.e. from manufacturer to retailer to the consumer and since GST is levied on each of these stages, this fact makes it a multi-stage tax. GST is levied on value additions i.e. the monetary value is added at each stage to achieve the final sale to the end customer. Since it is Destination based, GST is levied at the point of consumption. GST comprises of three taxes that are applicable under its umbrella:

• CGST: This is collected by the Central Government on an intra-state sale.
• SGST: This is collected by the State Government on an intra-state sale.
• IGST: This is collected by the Central Government for inter-state sale.

GST has primarily removed the Cascading effect that existed on the sale of goods and services. Eradication of cascading effect which is also termed as tax on tax, cost of goods has significant impact after the GST. Additionally as compared to earlier tax system, GST is technologically driven as all the activities like registration, return filing, application for refund, response to notice etc. needs to be done on online platform on the GST Portal, this in turn speeds up the processes making it faster and more efficient. There are certain Non-GST goods such as:

• Petroleum crude
• High-speed diesel
• Motor spirit/ Petrol;
• Natural gas
• Aviation turbine fuel
• Alcoholic liquor for human consumption.

CGST, SGST, and IGST has replaced all the taxes that existed in pre-GST era like Central Excise Duty, Duties of Excise, Additional Duties of Excise, Additional Duties of Customs, Special Additional Duty of Customs, State VAT, Purchase Tax, Central Sales Tax, Cess, Luxury Tax, Entry Tax, Entertainment Tax, Taxes on advertisements, Taxes on lotteries, betting and gambling.

Supply Chain Management (SCM)

A supply chain is an interlinked network of individuals, organizations, resources, processes, activities, and technologies that are involved in the manufacture and sale of a product or service. A supply chain starts with the procurement process and the delivery of raw materials from a supplier to a manufacturer and ends with the delivery of the finished product or service to the end consumer. Supply chain management is the management of the flow of goods and services and considers all processes that transform raw materials into final products that meet consumer expectations and needs.

Literature Review

The GST Era promises to make Indian products competitive in domestic as well as International markets and eventually leading to give a boost in economic growth of the country. The publication by Girish Gang in 2014, titled “Basic concepts and features of GST in India” published in International Journal of Scientific Research and Management explains the features of GST. An Article published in Journal of Production Research and Management by Amit Chandak titled ‘How “Goods and Service Tax” will Impact Logistics and supply chain Industry in India’, highlights that GST is a comprehensive tax and its impact is a comprehensive one too, it highlights the impacts on various supply chain activities like procurement, transportation etc. and discusses major changes after GST implementation as well as the bookkeeping activities. The article “Supply Chain in India: On the Brink of a Revolution” written by Roshini Singh at India Briefing highlights the changes in supply chain after the GST clearly stating that its growing regional integration and investor’s confidence. An Article by Jasjit Sethi at CIO Review highlights the 5 forces of GST model on Supply chain and proposes the changes that will be imminent and matches the changes with the requirements in terms of infrastructure, process, people and technology. Moreover more thoughtful insights have been gained from The Economic Survey 2017, 2018. Overall all these publications and articles along with other articles as well have assisted to be foundations of this report.

Research Methodology

This report is based on research from secondary data sources like Journals, Articles, Publications, Reports, News Journals, and Media Reports. All the data from the secondary sources is based on credible sources and is the review and overview of all the sources. This also included a thorough background research about GST and features of GST and getting an insight of the Supply chain management dependency on taxation structure of country and using content analysis techniques to come to a conclusion of how the two things link on the basis of research from above sources.

Analysis And Findings

Effect Of GSTt On Whole Supply Chain

The practices before the GST used to give less weightage to operational efficiencies because the main focus used to be how to reduce the state level taxes for sourcing and distribution in Supply chain. Their options would always revolve around the trade-off between Interstate or Intrastate procurement of goods, In-house manufacturing and contractual manufacturing, direct sales vs stock transfers etc. Adding on to that they also had to bear a variety of taxes like VAT, Entry tax, Service tax, Central Sales Tax etc. which added on to a lot of problems. Primary advantages that India possesses as a low cost manufacturing base used to get nullified due to the taxation structure.

The introduction of a unified system of GST is beginning to simplify the whole regime to a very great extent. By removing state taxes that had a cascading effect, the logistics companies are being encouraged to aggregate their warehouses instead of the old practice of opening one in each state to avoid Central Tax. This brings the full cost of the product down because the inventory and inventory carrying cost gets reduced which in turn affects the final cost of the product bringing the selling price down. The saved cost can be used by companies to further improve serviceability.

After the implementation of GST, the design of the supply chain is now based on the customer service and logistics cost. Smaller warehouses earlier being used can now be merged with bigger warehouses eventually solving the space problem by optimal utilization. Moreover with this the demand forecasting process can be made much robust, accurate and flexible.

Further benefits enjoyed by the companies are:

• Hassle-free sourcing of raw materials from different states.
• Better price options.
• Improved forecasting process and Inventory Management.
• Capacity Expansion and space optimization.
• Flexibility in manufacturing.

[bookmark: _Toc6750859]EFFECT OF GST ON PROCUREMENT PROCESS

The cost of Raw materials constitute a major part of the cost of the product and most of the companies try to minimize the procurement cost because it can have a significant impact. Earlier there was no policy of tax credit for inter-state procurement in the tax form but with introduction of GST, cross utilization of Input Tax Credit (ITC) is allowed in Interstate supply of goods, moreover the additional amount given as customs duty in the import of goods is brought to end by GST. As a result inter-state sales transactions become tax neutral making the processes easier. As a result many decision making questions like Inter vs Intra procurement of goods, consolidation of suppliers, choice of Import vs Local raw material vendor does not require much emphasis.

With this the procurement strategy has moved from taxation focus to focus on time and quality with a shift from producer state tax focus to consumer state tax focus along with the redesigning of specific processes.

Effect Of GST On Freight And Transportation

In the pre-GST era most companies being highly cost conscious tended to trade off future efficiency for current cost which reduced the scope of the usage of professionally managed fleets. With the advent of GST there are new range of possibilities for them:

• There will be a greater role for professional 3rd Party Logistics Professionals which can bring about much needed consolidation and expertise into the freight and transportation segment.
• GST can also reduce the time wastage at the interstate borders which in turn will be helpful in reducing transit and lead time.
• Since the interstate transactions are tax free in post-GST era, Replenishments can be made quickly from other states and hence reducing the average Inventory.
• Scope of Cross docking techniques is definitely increasing.

In the Pre-GST era, the transportation was based on the Central Sales Tax and varied state value added taxes. But in the post-GST era, the tax is levied at the central level and the state value added taxes does not have any impact. The tax rates are uniform across all the borders and state boundaries are no longer the parameter for deciding the routes.

In post GST era, the location of warehouses and their transportation networks is eventually turning out to be critical because the infrastructure for rail, road or multimodal strategy needs to be strong which requires well in advance planning to build an agile, efficient and futuristic and sustainable supply chain model. GST is enabling the warehouses to be larger in terms of capacity, with this the transportation lot sizes automatically increase, resulting in the usage of larger and more efficient trucks.

Effect Of GST In 3PL And 4PL Logistics

With the effect of GST, there is a bigger chance for Third Party logistics service providers to enter the market. Third Party logistics service providers can manage these bigger routes as in India covering north to South and make delivery process accurate and efficient. The 3PL logistics firms are constantly transforming from traditional service delivery systems to sophistically integrated and hi-tech service providers competing to meet the service demands. The focus of supply chain management is shifting from avoiding tax to reducing overall supply chain costs and asset returns, while developing the core competencies and creating customer centric network structures. The share of 3PL, 4PL providers rise further. The most important thing is that with GST, logistics sector has got infrastructure status which will create tremendous growth.

Opportunities in various supply chains is as below:

• The infrastructure of logistics is gaining importance over the location of the plant under GST regime. New opportunities for outsourcing are being created in services like carrier services and forwarder services.
• In the post GST regime, the sales and distribution models of the firms is undergoing change which is opening new opportunities in warehouse management and distribution operations leading to increase in outsourcing.
• In the aftermarket, customer service will shortly drive outsourcing in claims management as a value added service.

Effect Of GST On Inventory Management And Warehouse

In the GST regime, logistics companies can have one central warehouse or can go for warehouses at specific locations or can even adopt the unique and efficient hub and spoke model. With one country one tax, companies will have the ability to achieve cost reduction in their operations and in turn can transfer this cost benefit to the end consumer in the supply chain. Moreover, Companies can now consolidate the stock at their warehouses and demand fluctuations at a particular warehouse is also reduced to an extent. This in turn improves demand planning and results in an improved inventory management.

GST can help the Decision Makers or the top management in making the decision process much easier regarding the Warehouse and Inventory management policies. Some of these decisions may include:

• Decisions regarding planning of Warehouse Locations and Depot Locations considering the existing Plants and the markets locations and subsequent demands.
• Choice of the Warehouse Capacity and Depot Capacity which will make the planning of Safety level Stock and Reorder points much clearly visible.
• Decision Making related to decision of Replenishment cycle, Safety Stock, Milk Runs which are considered the inventory etc.
• No. of Distribution centres can be reduced and service level can be improved due to flexibility in interstate goods movement.

Big Scale regional logistics park can be constructed now to revamp the logistics infrastructure with latest technology. It increases the possible to combine with other players in stocking the products. Hence the holding costs will reduce to a greater extent. Larger warehouses would make investments into ERP and automation systems used for racking goods making it more meaningful and financially prudent.

Effect Of GST On Manufacturing Sector

GST is helping create numerous possibilities for the manufacturing sector in the following ways:

• There will be extended flexibility in vendor selection process, as the location of vendor will no longer be a constraint as it used to be before.
• Discontinuation of all area based excise exemptions and SEZ related exemptions.
• Auto component manufacturers setting up production units close to OEM plants for VAT credit chain can now be avoided after GST.
• Tax incentives will be provided equally in all states, as result new plants can be opened in any of the states which will boost up employment and decrease polarization.
• Stocking of Pharma goods at Union territories can now be avoided after GST. Initially, due to Tax exemptions, Pharma companies were stocking their products in Union territories and in SEZs.

Effect Of GST On Retail / FMCG Sectors

Over the years FMCG companies have tackled the old tax regime by developing a chain of Clearing & Forwarding agencies (C&FA agents) in each state. Goods were transferred to the C&FA without a title transfer thereby avoiding the incidence of Central Sales Tax. But as a fact it is also true that stock movement to smaller distributors is also difficult from long distances. For instance if we consider UP, considering the large size of the State, most FMCG companies would need to develop 3 or 4 C&FA’s to cover the state effectively especially if they are trying to covering smaller markets.

• Larger warehouses would make investments into automation, racking systems and ERP systems will prove to be a prudent choice. For larger warehouses, transportation will also become more efficient and cost effective with the use of larger vehicles for stock replenishment.
• This will help ensure visibility over the levels and make it easier to integrate processes for sharing data such as demand changes, current inventories, optimal transportation routes, etc.
• After GST C&FAs can now become bona fide third-party logistics providers. Moreover, customers’ demands for more value added services will boost the adoption rate of technology solutions such as warehouse management systems and track-and-trace offerings.
• There will be flexibility of differential pricing policy making it possible that the numbers of C&FA’s may come down to certain level. For example if interstate servicing of distributors has not got tax implications, a C&FA at Ghaziabad may be strategically be used to service both Delhi and Uttarakhand locations in addition to UP West circle.

Effect Of Exclusion Of Products From GST

With the introduction of GST, the State’s authority for levying State taxes and exercise duties has ended and has caused an impact on state revenues. To avoid the situation of State revenues getting severely impacted, some products like Tobacco, Alcohol for human consumption and Petroleum products etc. have been kept out of GST bracket. The effect of keeping petroleum products out of GST can be seen clearly that it is not benefitting the transportation costs of companies, instead of reducing it, it is adding up to the costs and moreover it is defeating the sole purpose of implementation of GST.

Conclusion

There is definitely a big impact that the GST is leaving on the Supply chain Management. Including Tax reforms and imparting infrastructure status to Logistics, the next level of logistics are evolving in India and the corresponding regulatory policies has to be taken to have a positive and expected impact. Furthermore, GST opens a plethora of opportunities for the growing Supply Chains to have a greater impact.

The following are the critical business implications post GST implementation:

People Front

The skill set requirement and training of the existing workforce to comply with the new services will pose a challenge. Workforce will now be able to become more customer centric improving the service level of the company and its operations to optimally meet the customer demands.

Process Front

• Consolidation and Outsourcing: Presence of organized, planned and efficient players may increase the possibility of consolidation and also improve the scope for 3PL and 4PL logistic operations enabling the companies to focus on core competencies rather than diversifying in unrelated business.
• Re-engineering of Supply Chain: Many of the companies and service providers have started or are in process of redesigning their supply chains along with realigning their warehouses and logistics network which opens a host of opportunities for 3PL and 4PL logistics partner and providers.
• Transportation: Primary freight and transportation costs are definitely bound to come down due to removal of state limits but the secondary costs may increase due to aggregation of warehouses to bigger warehouses.

Technology Front

Aggregation of warehouses will lead to bigger warehouses which will be served better by automation all around using state of the art technologies to reap long term benefits. Investing in automation and Warehouse Management Systems (WMS), along with SCMS (Supply Chain Management System) will prove to be more meaningful due to increase in scale.

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