Discuss About The Responsibility And Environmental Management?
Supply chain and logistics management are very important process in the life of an organization. In this process, the organizations manage its products and services and it consists of the flow and storage of raw materials from Work-in-process (WIP) to final goods or products. Supply chain management is processed to enhance the customer value and achieve the goals and objectives of organization. The activities of supply chain include every process form product development, sourcing, production and manufacturing of products, logistics and management of information system, which are needed to convey these related actions.
Apart from its benefits, the company may face various issues related to its supply chain and logistics management process. The organization, which is taken onto consideration here, is Alibaba.com, which is working as an e-commerce retailer all over the world. According to Bryan, 2015, Alibaba.com is an e-commerce organization that is founded in China (Bryan, 2015). The company was established in the year 1999. The organization facilitates the transactions between two nations. It provides different types of services, like; business to business, business to consumer and consumer to consumer through its website. Apart from these services, it offers some additional services, like; cloud computing services, online payment services and search engine for shopping online.
As a well-established e-commerce retailer, Alibaba group is adopting an effective supply chain and logistics management process, which assists it in delivering the products and services to the respective customers. This report includes different aspects related to the supply chain and logistics in retail industry. It describes its internal and external perspectives in context of Alibaba.com. Furthermore, it includes three stages, which can create value for the organization. Currently, Alibaba.com is facing the issues related to supply chain management. The company lacks the effective supply chain in its business operations. It lacks in supply chain and logistics, so it is not able to compete with its biggest competitor, i.e. Amazon.com.
In an effective supply chain system, it is essential to manage the related operations and measure its performance by implementing different phases or elements of supply chain. Alibaba.com includes various elements or stages in its supply chain system to analyze the performance and find out the related issues. These are the factors, which drives the performance of supply chain process. These five phases are stated below;
Transportation is the process, in which inventory moves from one place to another place in the process of supply chain and logistics. At Alibaba, the products move between different stages of supply chain, like; manufacturer to distributor, distributor to wholesaler, wholesaler to retailer and then retailer to final customer. Transportation plays an important role in enhancing performance of supply chain. If Alibaba uses efficient and faster transportation process, it can gain more responsiveness from the customers. It may have a large impact on inventory. At this step, Alibaba makes the decisions regarding location, distribution channels and network, modes and routes (Basnet, 2013). It can be measured by considering the customer satisfaction towards order delivery.
Inventory is one of the most important phases of supply chain at Alibaba. It plays an important role in driving the performance of supply chain. An effective management at organization enhances the availability of products and decreases the costs. With internationalization and growth in the product variance to fulfill the demands of global customers, demand volatility for Alibaba.com has enhanced, so it is very difficult to create demand and manage the inventory. It is a big challenge for Alibaba.com in today’s competitive business environment. Alibaba is implementing the safety inventory in its supply chain. The organizations in retail industry require routine and real time forecast to perform the operations at market. The firm can implement advanced analytics to these areas to correctly forecast the demand and to monitor the supply and replacement terms and policies and manage inventory flow of products (Brandenburg, Govindan, Sarkis and Seuring, 2014).
As Alibaba.com is a customer focused web-based organization, so it is important to plan the inventory flow of goods and services. It allows the firm to influence data source and enhance the performance of suppliers and effective quality controls. The organization can measure the performance of inventory by looking at the availability of products.
The organization is increasing the customer responsiveness by enhancing the facilities and capacity by making them flexible. At this stage of supply chain, Alibaba makes the decisions regarding the location of facilities and look at different factors, like; costs and quality of staff, impact of legal and political factors and infrastructure. At this stage, Alibaba can measure the performance and operations by looking at the capacity of facility to work on its functions. If the facilities are of excessive capacity, then it is costly and approachable and facility with little capacity will be less approachable and more effective and efficient (Christopher, 2016).
At Alibaba, information is a significant driver, which can be utilized to enhance the responsiveness and decrease the costs by enhancing the efficiency and effectiveness of supply chain practices. As an e-commerce retailer, the organization is implementing various technologies, like; internet, electronic data interchange etc. (Forslund, 2015). Financial measures can be used by the organization to measure the performance of supply chain in this context.
Sourcing includes the business processes and activities, which are used by the organization to buy products and services. At Alibaba, sourcing plays an important role because it is an e-commerce retailer. The company is engaged in outsourcing the products from third party manufacturers. It increases total surplus that is shared across the supply chain process. This element can be measured by considering the quality of services, lead time, reliability, on-time delivery etc. (Hill & Fredendail, 2016).
Supply chain integration is the process, how each and every person in organization and its partners work in coordination to attain the business objectives through sharing the information and integrated business process. Supply chain process at Alibaba.com includes both internal and external integrations. There are various examples of both integrations, which are stated below;
Internal integration includes a process of interaction between internal departments and collaboration, which drives all the departments together in the organization. Alibaba.com is using internal integration to attain great customer satisfaction. It is characterized by the system visibility in the company from purchase to distribution. Alibaba has more focus on interaction and collaboration between significant functional divisions, like; marketing, sales, logistics, production, procurement etc. The organization has to be considered to process the high level of integration, when the information systems utilized by different divisions are connected with each other with all the departments (Jacobs and Chase, 2013). It enables the organization to access the correct and real-time information from other functional areas. There are some effective and useful sources of communication across the departments. The company has established links between departments in terms of business processes and activities and strong relationships that assist collaboration and communication across these functions. The major examples of internal integration are like; different departments of the organization, like; distribution, sales and production. The performance of company is improving by integrating these functions.
External integration includes the process of integrating external factors of an organization (Kamarulzaman, 2016). There may be two instances of external integration at Alibaba.com, i.e. supplier integration and customer integration, which are stated below;
Supplier integration includes the interaction between a company and its suppliers to ensure the efficient flow of materials. At Alibaba, it is on the high level, as the company has linked the information systems with its suppliers. Both of the parties have access on real time and accurate information. It has established effective modes of communication between all the parties. In addition, Nassar (2011) stated that the company has the links between the parties in terms of business processes and effective customer and supplier relationships that assist collaboration and communication. It has positive impact on quality and innovation of products (Nassar, 2011).
Customer integration includes the collaboration and communication between customers and organization. At Alibaba, the major objective of customer integration is to improve the demand planning and reflectiveness in supply chain and logistics process. Without sharing the information, there may be chances of inefficiency in the customer services. The company always makes the efforts to manage its relations with customers, which enhances its business processes and operations (Wittstruck & Teuteberg, 2012). To attain the high level of this integration, it is important to alter the product orientation to customer orientation. It needs very close collaboration and interaction between customers and suppliers.
Supply chain value is known as supply chain surplus that is linked with the profitability of supply chain. According to the Pearl (2017), this is the difference between product sales and costs in supply chain process. If the company needs stabilized cash flow, then it requires growth in positive cash flow from its customers. To generate the value from supply chain and logistics process, Alibaba needs to make the effective decision on managing these flows (Pearl, 2017). Management of all the flows, like; information, material, cash and return and designing of supply chain process are important components for successful supply chain and logistics management. The company has to make decisions by emphasizing on the value creation, profitability and supply chain surplus. The value stream map shows the value creation stages at Alibaba.com.
Value Streaming Map
This process can be divided into three stages, which are described below;
Information flow includes the information regarding an order, like; invoices, purchase order, product description, quotation, change or return requests, complaints and feedback from customers on suppliers’ performance. One of the major parts of Alibaba’s supply chain is flow of its information. The process of information inflow begins when it provides products, prices and other information to customers. When the customers receive the products from Alibaba.com, they transfer the funds to stores’ account. After that, the people at website coordinate with their manufacturers and supplier partners and communicate the information regarding the point of sales and replacement of goods. This organization is operating the business with the goal to minimize the stock-out rate. At Alibaba, other flows of information occur between warehouses and distributors, warehouses and producers and suppliers. The company is implementing an advanced technology for effective flow of information (Stadtler, 2015). An effective information flow generates the value for organizational supply chain.
Material flow in supply chain consists of flow of products from producer to end consumers. In this context, Silva, (2005) stated that it can be possible by establishing different warehouses among different suppliers, partners, dealers and distributors of the company (Silva, 2005). There are millions of products, which flow through the supply chain of Alibaba every year. This organization is using various strategies for managing material flow and creating the value for organization. It always emphasized on the need to decrease the costs and sell the products on best prices.
According to Savrul, Incekara & Sener (2014), return flow is least effective stage for generating the value for customers. It does not generate that much revenues and profits for the producers. Alibaba.com is adopting reverse logistics process for handling return flow (Savrul, Incekara & Sener, 2014). When a customer rejects a product, then that product returns to the stores of Alibaba. A report indicates that company is actively engaged in the eco-friendly processes. It is using the processes like; reusing and recycling. In addition, it is engaged in corporate social responsibility and sustainability activities. It creates the value for supply chain at Alibaba.
Thus, these are the three stages at Alibaba, which are generating values at organization. the company should focus on enhancing these flows.
Conclusion
Thus, the report includes various supply chain aspects of Alibaba.com. It is an e-commerce retailer all over the world. The company is facing some issues related to supply chain and logistics. However, the organization is adopting and implementing effective practices of supply chain, like; quality management, cash flow management, inventory management, partnership with suppliers and manufacturers. These are the aspects, which are assisting the organization in managing its operations and performance of processes. Furthermore, Alibaba is going through some stages to create the value of supply chain. Thus, it can be concluded that company is effectively implementing and managing its supply chain and logistics management.
References
Bryan, B. (2015). Alibaba just proved it’s more than just some Chinese company. Retrieved from https://www.businessinsider.in/Alibaba-just-proved-its-more-than-just-some-Chinese-company/articleshow/49791045.cms
Basnet, C. (2013) “The measurement of internal supply chain integration”, Management Research Review, Vol. 36 Issue: 2, pp.153-172.
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S. (2014). Quantitative models for sustainable supply chain management: Developments and directions, European Journal of Operational Research, 233(2), pp.299-312.
Christopher, M. (2016). Logistics & supply chain management, Pearson
Forslund, H. (2015) “Performance management process integration in retail supply chains. International Journal of Retail & Distribution Management, Vol. 43 Issue: 7, pp.652-670.
Hill, E. & Fredendail, L.D. (2016). Basics of Supply Chain Management, CRC Press.
Jacobs, R. and Chase, R. (2013). Operations and supply chain management, McGraw-Hill Higher Education.
Kamarulzaman, N.H. (2016). Strategic Value Creation in a Supply Chain. IGI Global Publishers.
Nassar, S. H. (2011). Supply chain visibility and sustainable competitive advantage: An integrated model. University of Bath, United Kingdom.
Pearl, H. (2017). Alibaba Group Expands Presence in Australia, New Zealand, Retrieved from https://www.reuters.com/article/us-alibaba-australia-idUSKBN15J091.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Savrul, M., Incekara, A. & Sener, S. (2014). The Potential of E-commerce for SMEs in a Globalizing Business Environment. Journal of Social and Behavioral Sciences.
Silva, A. (2005). The Ten Commandments of Quality Management: Best Practices to Develop New Leaders And Create a Quality Environment. USA: iUniverse.
Wittstruck, D., & Teuteberg, F. (2012). Understanding the success factors of sustainable supply chain management: Empirical evidence from the electrics and electronics industry. Corporate Social Responsibility and Environmental Management, 19(3), 141–15
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