Global Logistics And Supply Chain Management: Themes And Real-world Examples

Number

Theme

1

Use of Information Technology across the supply chain as IT is a key enabler for businesses (Giannakis & Louis, 2016). With IT, business can make continuous improvement.

Giannakis & Papadopoulos (2016) argued that Information Technology is not only a support function for organization but a key enabler. With the use of Information Technology, organizations can actually bring efficiency in the supply chain. The use of IT enables the supply chain functions like real time inventory management, Just in Time inventory system etc. The use of Information Technology also provides an opportunity to organizations to integrate their supply chain through forward integration and backward integration (Durach, Wieland & Machuca, 205).

Zara is one such company that heavily uses Information Technology across its supply chain. This is the reason that Zara has very limited inventory handling cost (Giannakis & Louis, 2016). Zara is known to replenish the inventory across its stores within a month and with the use of Information Technology, Zara can actuall do this.

2

Use of Just in Time system. It is an inventory strategy companies employ to increase efficiency and decrease waste in the supply chain and overall system (Giannakis & Papadopoulos, 2016)

In the JIT methods, the supply chain functions by receiving goods only as they are needed in the production process, thereby reducing inventory costs (Kamalahmadi & Parast, 2016). This method requires producers to forecast demand accurately. With this system, organizations can actually minimize the cost of holding inventory. This technique is primarily used by the organizations for which inventory holding cost is very high (Stevens & Johnson, 2016). Organizations have started to focus a lot on JIT methods so that they can increase their profit margins.

The pharmaceutical companies like Ranbaxy would use JIT technique as the cost of holding inventory is high due to the environmental conditions to store some of the drugs. This strategy has helped pharmaceutical companies to save a lot on their inventory cost (Ellram, Kirchoff & Tate, 2016). With the JIT method, the companies are able to reduce the cost of operation.

3

Another theme is the use of six-sigma methods to monitor and remove the defects in the system. With six-sigma organizations can actually aim an optimized supply chain with minimal defects (Gunasekaran, Subramanian & Rahman, 2015).

Today, organizations have realized that the productivity of the system can be improved only when the defects are minimized in the system (Meixell & Luoma, 2015). Therefore, objective of the organizations is to use techniques to minimize the defects in the supply chain. Six-Sigma is a powerful tool that can help organizations to minimize the defects. It takes time to practice six-sigma. However, with time, organizations can master the art (Dubey & Gunasekaran, 2016). The benefits with six-sigma is that it directly results in profit improvement for organizations. It is important that six-sigma should be established as a culture in the organization.

The prime example of six-sigma methodology is Toyota (Rozar, Mahmood, Ibrahim & Razik, 2015). The Japanese car manufacturer, Toyota is known across the globe for its focus on lean management and six-sigma. In fact, Toyota is a pioneer and master of six-sigma technique and it is being used as benchmark by various other organizations across the globe (Beckwith, 2018). With Six-Sigma, Toyota has been able to establish a name around the globe.

4

Use of ERP system has increased to integrate supply chain with other functions in the organization (Esmaeilikia et al., 2016).

In the current time, supply chain management is not seen as a stand-alone function in the organization. For maximum efficiency and effectiveness, it is important that supply chain management function should be linked with the other functions in the organization (Garcia & You, 2015). This integration is possible with the use of ERP system. The use of Employee Resource Planning provides an opportunity to organizations to link together all the functions and with this integration, supply chain management can be established as a horizontal function that cut across different vertical functions like marketing, sales, human resources, etc. (Munoz-Torres et al., 2018)

The companies in retail segment like Walmart are master of this approach. With the use of ERP system, Walmart has been able to establish a strong supply chain network that cut across all the key functions. Walmart has a supply chain that takes care of inventory, orders, and sales across its stores (Genovese, Acquaye, Figueroa & Koh, 2017).

5

Total Quality Management as a considerable function of supply chain management (Rajeev, Pati, Padhi & Govindan, 2017). Organizations want that the final output of an effective supply chain management should be Total Quality Management (Garcia & You, 2015).

With Total Quality Management, organizations can actually take the complete benefits of supply chain management. The TQM approach states that the organizations should not be narrow with its focus on supply chain management (Snyder, et al., 2016). The TQM approach enables organization to have a wider or a broader focus towards quality management approaches that can be taken as a part of supply chain management (Christopher, Harrison & Van Hoek, 2016). With TQM, organizations can actually manage the quality of product and services that are controlled by its partners like suppliers, sellers, etc.

The pioneer in the field of Total Quality Management is Toyota. The company has been using the practices of Total Quality Management for a long time. With the focus on TQM, Toyota is able to control the quality principles and standards for its vendors and suppliers (Closs, 2016). This has strengthened the position of Toyota in the ecosystem. With the focus on TQM, Toyota is able to manufacture the car with unmatched quality.