Supply Chain Management And Logistic Within A Organization Commerce Essay

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The primary aim of this report is to critically analyze the present current scenario of Supply chain management and logistic in the organization. This report cover all past, current and future aspects of Supply chain management and logistic and also provide an overview of supply chain management process and logistic adds value to all types of business. It also aims to initiate the understanding of some core concept such as: technology, trust between people, data sharing and interaction between all shareholders in total supply chain management.

The supply chain management and logistic is maximising added value and reduces the overall cost across the whole trading process and centre on speed and certainty of response to the market. Supply chain management is distinct as the systemic, strategic harmonization of the traditional business task and the strategy across these business tasks inside a particular organization and across companies within the supply chain, for this reason of getting better extended performance of the individual organization and the supply chain as a whole (Mentzer et al., 2001, p. 18). The supply chain management and logistic involved most of the activities such as: procurement, sourcing, conversion and logistic control the reverse flow, storage of goods and facility and interconnected information between the point of source and point of utilization in order to meet consumer's requirements. Supply chain management and logistics is pillar of most of organization, but still many organizations are not too much focusing on these departments. The companies concern about sales department because this department generate the profit but there is another way to produce more profit. If company manufacture the product at low cost and minimise the transport cost, so they can generate more profit. According to the research the C- level executives are gladly unaware of supply chain management as lengthy as the SC is operating well and if suddenly any problem has been create then it will get attention on supply chain. This right C- level executive have time restriction so they cannot devote their time on supply chain matter. Every single organization using supply chain, but they are not aware the system and function which using are belong to supply chain management. For example hospitals, when patients enter in the first room of reception to operation theatres all these function are related to supply chain management

The managers and team member have understand the whole concept and role of supply chain management because it they are play integral role in supporting supply chain activities and process. The figure 1 is review few details for non - supply chain managers change supply chain management inventiveness. According to current survey by Deloitte Consulting found 91 percent of North American Production Company raked supply chain management as very important to whole organization success and only 2 % said their supply chain are presently world class. The supply chain management is the cross - functional in nature which provides more flexibility to support other area. {{Trent,Robert J. 2004}}


Figure 1

A supply chain is a bundle of three or more companies connected straight by one or more downstream or upstream flow of artefact, finances, services and information consumer end. Non - supply chain managers have understood supply chain is capable to manage wide range of activities and functions in the organization. These activities contains material handling, procurement, inbound and outbound logistics, warehousing and distribution centre, inventory control, demand and supply planning, order processing, manufacturing planning, MRP - I, II, shipping and at last customer services. The organization is doing from many years but there interrelation and synchronization between function and activities which supply chain enable these activities and function and supply chain management is work like catalyst. Non- supply chain manager have know supply chain link other terms with the well-known, value chain, products distribution and supply chain, the figure 2 shows the supply chain link with other activities and maintaining goods distribution and project on the upstream and downstream and it's concerned with suppliers and inbound logistic . {{Trent,Robert J. 2004}}


Figure 2

Supply chain management can help organization to develop the competitiveness of the supply system, which must explain into enhanced competitiveness and settlement for all group engage, in terms of additional proficient use of supplies in accomplish the concluding client facility objective, enhanced interaction between supply system associate, more accurate preparation and control of supplies and information stream from provider to end consumer, cutback in supply system inventory and lead time density, etc. (Cooper & Ellram, 1993; Cooper, Ellram, Gardner, & Hanks, 1997; Ellram, 1991; Romano, 2003; Simchi-Levi, Kaminsky, & Simchi-Levi, 2000). {{ Alfalla-Luque, Rafaela 2009}}

The executives of Whirlpool faced dramatic and highly demanding forceful event. In whirlpool having facing unexpected problem, they introducing new product in market and it have good demand growth and they needed new channels of distribution. The executives had just single issue -its supply chain. Increasing stock of finish goods the inventory level stuck, spotty service, mediocre fill rates and highly increased logistic cost, the president and chief officer are frustrated from all these things and had lost his patience. Then they called in his top supply chain employee and gave them two word mandates:"Fix it". After this meeting there dramatically change in the organization, the expansion and execution of a strategy which integrated latest information technology, logistic process , changing roles of supply chain workforce and the adding of fresh talent. The whirlpool worked for next four year to change his liability into standard competitive gain.

Its common thing most of the organization struggling with maintaining the balancing of supply and demand in their supply chain. In the case of retailers faced the issue of high shortage of inventories for few products and others excess of products. Companies are manufacturing shopper product which is ahead of the seasonal curve which is big challenge for the companies and this based on the historical data and always there fluctuation in demand and supply. In worst scenario companies and distributor unable to holding the inventories it have to give discounts and other schemes which results lot of loss and shortage of the products direct effect on customer. All these symptoms have a frequent root cause. So all the supply chain professionals and C- level executives would like to shrink the ambiguity and constantly improve to control this threat. Recently most of the organizations have faced considerable business challenges and shirking profit margins, fall down in customer loyalty, increasing global competition and increased supply chain quickness.

So there is application of supply chain management called S&OP (Sales and operation planning) which able to manage this type o function and enhance the business growth. S&OP is key element of strong supply chain and helps organizations to response rapidly to multifaceted business climate. The S&OP is able to manage the customer demand and supply with help of some business processes and technologies that enable the companies to react according to demand and supply variability with close into the most favourable marketplace. When enterprise applies the sales and operation planning correctly then S&OP is command to enable companies to achieve the goal and change dramatically which increase the return on investment. And outcome is profitability, increasing in customer loyalty and satisfaction level, performance and the product portfolio.

Many companies' executives having confusion S&OP is for big enterprise and some executives want to know what a key element of this program is. To assist this query Oracle sponsored The Sales and Operations Planning Benchmark Report, a revise of more than 200 corporations accomplish by the Aberdeen Group. 142090-SCM0655SOP1

The aim of the S&OP revise was to review a large mixture of large and mid-size organizations to classify winning tactic for sales and operations planning. One of the key results was that generally organizations have various type of S&OP process to align demand and supply. In actuality, more than 70 percent of appellants to Aberdeen's assessment show that they are keenly connected in enhancing their existing S&OP capabilities. As shown in Exhibit 1, a major amount of members revealed that they expect an enhanced S&OP program to significantly improve operational performance across the value chain, from sales to procurement. These respondents are motivated to improve their S&OP process by a combination of decreased business growth, diminishing profit margins, and competitive pressures.

Literature review

Definitions of supply chain management

The supply chain management cover the current stream of supplies from supplier to manufacturer through distributer to the consumer. ( Novak & Simco 1991).

The supply chain is a structure and component of supply chain are material supplier, distribution services, production facilities, customer and suppler are linked together via feed forward flow of the material and feedback flow information. (Towil, Naim, and Wikner 1992).

The supply chain management conceptions which consist dynamically handle channels of procurement and distribution. It is the cluster of industries that add value by the side of product flow from original raw material to end user. (Cavinato 1992)

The supply chain is system chain which establishes the connection with all process from raw materials to final customer. (Scott & Westbrook 1991).

Supply chain management is process which mange the whole network from begging (supplier) to end (final consumer) and managed in the term of best outcome for entire system. (Cooper & Ellram 1993)

In other term Supply Chain Management means integration and management of Supply Chain enterprises and activities throughout synchronized and combined tactical agreement, well-organized business processes and top level of data sharing to develop a value chain to facilitate and give associate society a sustainable economical advantage and in turn offer value for money to the client. Instead of product versus product or store versus store, it is now supply chain versus supply chain. In this rising highly aggressive and dynamic atmosphere, the ultimate achievement of the company entity will count on administrations capability to assimilate the corporation's complex network of business relationships. The Figure 3 will describe the procedure of Integration in the Supply Chain system.

Figure 3

Many researchers have squabbled that we are currently guide in a new era where organization competitive advantage and performance will directly connected with to supply chain performance. (Lambert, Cooper and Pagh 1998; Gunasekaran, Patel and Tirtiroglu 2001).The theory of supply chain management was reveal in company literature as early on (Forrester 1961), who recommended that the achievement of industrial corporation pivoted on the "connections between flows of information, materials, manpower and capital equipment." however, although his sensitive, consideration,, the genuine phrase supply chain management did not exteriorize until the near the beginning of 1980s (Oliver and Webber 1982), and only a small number of articles acknowledge the phrase "supply chain" between 1985 and 1997.


We can see in the figure the supply chain is not as a chain of separate operations and enterprises but as a entire end to end procedure raw material, harvesting, assembling, manufacturing, storing goods, warehousing, delivery of goods and final consumption. (Heizer, J and Render, B 2006).

The to get success of any supply chain is depend upon the good connection between three clot of players consumer, outsider suppliers and the internal department which manage all the activities between primary and secondary of the companies. The customer is the essential for the companies and marketing department know which specific product and its attributes according to the customer point of view. Marketing department decide the product price and service and also responsible for promotion with the aim of simulating the demand. Marketing also sell the goods/services within the company to operation and other utility of the company. Its necessary for supply chain is well connect and synchronization every details from other department which helps in forecast the demand and supply. The aim of supply chain management is illustrate by Kaufman (1997, p. 14) as to being too "... eliminate communication hurdle and remove prolixity" throughout synchronize, monitoring and controlling processes.

Top management role in Supply chain management

The top level management play important in supply chain or you can say they also key enabler for supply chain management. The importance of top management support for successful supply chain management operation has for a long period been be aware of in the supply chain management literature (Lancioni, 2000; Matchette and Lewinski, 2005; Gibson et al., 2005; Lambert and Cooper, 2000; Andraski, 1998; Moberg et al., 2003; Mangan and Christopher, 2005; Slone et al., 2007).

The role of top management in supply chain management

Dustin is retailer of IT peripherals and selling their goods on the Swedish and Danish markets and the turnover is £400 million yearly. Dustin selling their product in two market segments business to business segment and business to customer segment. They are dealing with hardware and software and having leasing scheme from their own company. In year 2008 Dustin market is increasing rapidly and unfortunately Dustin does not change his main business approach which really needed that time. Dustin selling I.T peripherals at low margin and short product lifecycles. To handle the competition Dustin has focus on two main components of Dustin business model is high availability of products and speed. To achieve high availability and speed, Dustin has spent lot of effort to manage their physical goods flow in the supply chain and they have robust platform because of their supply chain management, Dustin have their own IT system Dacsa. This IT system enables Dustin to automatically take their order and send the details to financial department and result short lead time which directly related to the inventory turnover which 40 times per year. Dustin always seeking the way to improve the supply chain management beyond the own company borders. The Dustin had efficient IT system and also trainer staff who able to operate these system but the most important thing the CEO of the company is also founder of the organization and other technical department officer are young good background in their field. Dustin able sell this IT goods because the have support from their top level management. And after few year CEO replace by new CEO who came from DELL. It reflects organization future management provide informal change in project and company design improves the product range, logistic and sales channels and short - decision lines.{{Sandberg,Erik 2010}}

Integration of logistic and supply chain

In May 2008, Dixon-Stewart Associates, the logistics and supply chain recruitment company, joined the recruitment specialists DATS. Both organization have same track background culture in employment and have related point of view, and it was this background and culture that involved Valerie Dixon firstly: 'We share the similar centre ethics as DATS; reliability, service routine and professionalism are fundamentals we believe very important to make sure we carry on to give the greatest service to our customers.

Stephen Nickson, DATS Managing Director said: His skill and awareness of the logistics and supply chain business is a main treasure, and has further reinforced the DATS assurance to provide a bendable and cost-efficient staffing solution to our customers. 'Valerie and Neii joined the DATS specialist Logistics & Supply Chain Division as consultants. Neil Ewart, DATS Logistics & Supply Chain Consultant, says: customers are more complicated in their recruitment requirements, they require as criterion an understanding of the logistics marketplace and supply chain process and feel like to work with professional in their area, as contrasting to persons who envelop a broad continuum of business. Neil Ewart himself work inside the transportation organization for several years in different operational responsibility and establish that knowledge precious when he shift to a employment consultancy post persistent on the logistics marketplace Having an positive reception of the supply chain process, an perceptive of the effective matter and defy, as well as an consciousness of the terminology and argot used inside the organization does build bridge with customers a more well-organized and efficient process from beginning to end. The DATS Logistics & Supply Chain group maintain to support and build up extended-reputation company interaction with customers and connections, including main blue-chip corporation and a lot of well-known towering street products. {{DATS 2008}} DATS Logistics & Supply Chain

Logistics' role is increasing

Logistics will take part in a middle function in getting better competitively, according to David Garman, chief executive officer of TDG.

'Logistics necessity is seen as a basis of competitive gain and not as a price to be cut,' Garman told assign at last week's Logichem meeting in Antwerp, Belgium.

Historically, logistics has been seen as provided that an opinionated role. But Garman thought that the importance is shifting and logistics expert are becoming gradually more essential and dominant.

However, as the supply chain performing a superior role in getting better competence, managers are facing innovative challenge. The edge with subcontract supplier is presently sub-optimal, with transportation capability successively at less than 25% consumption, noted Garman. 'You would not be expecting a industrial unit to control at those rates,' he commented.

In accumulation, the tender process for outsourcing agreement is very unsuccessful and costly. Useless ' lawmaking, known as the Working Time Directive, has not assist whichever, with connected costs in chemicals almost double those of the customer area, as chemicals is seriously prejudiced towards outsourcing.

Managers are too persistent on the diminutive term and key presentation indicators, Garman said. He additional: 'Managers must have image and not be handle by figures.'{{Burridge, Elaine 2005}}

Organization adopting SCM

According to two recent studies on supply chain management indicate US businesses situation. Massachusetts Institute of Technology and KPMG released one part of two part of study which based on the personal interviews with top level senior executives of supply chain leaders. According to their data, organization insufficient and not focusing the supply chain program which enhance supply chain efficiencies. Companies are made improvement on their process but they not met to the requirement of supply chain. The study shows most of the companies supply chain management methodology is continuous focus on cost and asset. According to Deloitte Consulting authored the second study conduct the questionnaire for more than 200 organizations. The result of second survey found that whereas 91 % of manufacturing industries having very important supply chain change for their company and only 2 % rank their supply chains as world class. Deloitte's results support KPMG study, reflecting just about 50 % of the organization required a formal supply chain strategy. Therefore both studies shows companies need to implement more well structure supply chain management process.{{Deloitte 1999}} Studies see much room for SCM improvement

Retailers turning to supply chain

The leading retailer turning their supply chain process to develop inventory control system, manage the cost and trying to provide first class the customer service. According to Retail Industry Leader association (RILA, and Auburn university 's released report which emphasizes the more and more significant role of supply chain management current retail environment. During the time of global recession, a company has tight budget and fluctuation in fuel cost. In this crucial time of recession found retailer are more depend than ever on SCM. Then supply chain executive are being called for to create an strategies which helps in amplify the efficiency and cut down expenditure with uphold a high level of services. This supply chain strategy builds up a strong distribution system which able to fulfilled the high volumes and creates bendable capability to regulate supply chain infrastructure and maintain unanticipated fluctuation in demand. Steve banker, service director for supply chain management with Boston - based ARC advisory Group (www.arcweb) said retailer doing very good and innovative things with supply chain area. At most corporation (64 %) the top supply chain executive reports to the top company executive," Banker said. Executives of supply chain are responsible for transportation, distribution centre, inventory management at the distribution centre, and network design.{{Retail Industry I, Leaders Association & Steve Banker 2010}}. Retailers turning to SCM

Tea maker cosies up with supply chain efficiencies

The big organization like Yorkshire tea maker the supply chain management are not in their top most priority because they focus on the maintaining the quality of herb and promoting their brand. But now these organizations understand the value of supply chain. According Lindsay Botto, operation director said company has purchase Infor's supply chain management Demand Planning and supply chain advanced Scheduler supply chain solutions and bought PLM Optiva product lifecycle management software. The supply chain systems help organization to improve service and deduct the cost and improve its time - to- time and also change according to the demand changes and flexible infrastructure which assist to create plan promotion and schedule production to meet when demand comes to peaks. Botto explain the new supply chain system boost the overall productivity throughout better scheduling. Now said supply chain is the backbone of the company.{{Lindsay Botto, 2009}} Yorkshire tea maker cosies up with supply chain efficiencies

Financial SCM

The financial department in every organization get more preference as compare to supply chain department. One of the ample business challenges these days is procure a competitive return to investors. The C - level executives and senior executive's officers and chief financial officers be required to put some light on supply chain management, not just as a technique for reducing the operating costs but also as dominant enabler of the key drivers of the financial performances. When supply chain management connect with financial then it's able to accomplish the transaction from the backroom to the boardroom. However there are at least two major factors which effect on supply chain management boardroom debut. First, many C - level executives have stick with conventional view of SCM and don't know understand the potential impact on all part of financial performance (capital utilization, development and profitability). A recent research discover the financial profit of combined planning, forecasting and replenishment (CPFR) for several companies, including Procter & Gamble ,Nabisco and Wal-Mart, Sara Lee. The study come with the sale increase by 12 % and improved promotional planning and increase service level. The storage cost and related costs decreased 20 to 40 % .Regrettably; the traditional outlook is contracted in the phrase of supply chain management effect on only one characteristic of general financial performance - operating costs. Secondly many supply chain management managers are not able to speak "finance language". So they unable to provide the real value of their explanation at the C - level.{{Timme, Stephen G. 2000}}

SCM developing small business

According to the Miguel Trejo marketing manager of United Parcel Service (UPS) Mexico, says Mexico market is only developed just seven to eight percent compared developed nations. The company can do much better than that perhaps concentrated on developing the supply chain management strategy which offers a competitive advantage. In Mexico 32 % companies have contract with logistic companies for manage their transportation, storage and distribution operations. Miguel says no one can argue on the potential high return of supply chain management strategy which approximately at least 34 % and setting one up supply chain management draw out organization financial resource in Mexico , that why companies worry to invest on supply chain management. UPS using program called Capital Business Credit (CBC), this program helps UPS in financing to buy equipment and also enable companies to invest on supply chain management to develop their system. Most of companies' unconcern about supply chain management because organization needed to spend lot of money. So they focus on the sales and other activity.{{E., K. 2005}}

SCM integrated with CRM

It's hard to believe some have CRM backgrounds that spend his most of time with managing supply chain. Ven Bonatha is CRM director for CEMEX, the nation's second-largest producer and distributor of cement and concrete. The question arise why there is no need any CRM executive have involved in supply chain management but Ven said construction project are very expensive and it's necessary to deliver to his clients and this product have accurate arrival time. CEMEX, well connect his both system supply chain management and customer relation management in order to provide better respond to his client's queries synchronization with distribution processes with associate and streamline operations at distribution terminals.{{Beasty,Colin 2007}}.

Culinary Tourism Supply Chains

International Culinary Tourism Association (ICTA) (2006) offers excellent service for his customer in the term of food, vehicles and availed some service from his suppliers and other lot activities and function to manage the task. Supply chain management help culinary tourism in such way: Direct sales in the sense of consumer and the producer are direct connected, Food supply chain where consumer purchases from a retailer, retailer purchase from wholesaler, wholesaler buys from a producer, And link with marketing activities by the producers. {{Smith,Stephen L.J. 2008}}.

Fast fashioning the supply chain

The fashion industry holding very big market share and in this business due to fashion styles demand change rapidly which create unpredictable market situation. The fashion markets as naturally demonstrate the following characteristics such as; short life cycles, high volatility, low predictability and high impulse purchasing. The giant fashion retailer Zara, approximately there are twenty season in a year. These effect generate a pressure on logistic management which a big challenge for company. Fashion supply systems are peculiarizing by three essential lead-times: time-to-react, time-to-serve and time-to-market. All three of this factor stresses the value of agility in fashion supply networks. Agility does, however, require fundamental amend in organisational architecture, and plan of action and a shift away from predict-driven supply. Market understanding, virtual assimilation, networked logistical systems and process configuration all become elementary fundamentals to accomplish the ultimate agility, a Quick Response capability.{{Liz Barnes 2006}}.

In year 2005 according to AMR Research the report illustrate supply chain management application rose 3 % to $ 5.6 billion. And SAP was the top seller of supply chain management application by returns; top its five top competitor, Oracle, i2 Technologies, Manhattan Associates, and Infor.{{Anonymous 2006 ;}}.

Supply Chain Management & Logistics software

The start of the internet has extremely improved the equipment and resources presented for supply chain management, especially the software, by getting visibility to all the members beside the supply chain and giving them real time update and data swapping facility. Howe ever there is no product or software available who can provide accurately master the total supply chain end-to-end, a few top most corporation are approaching to supply chain process. The complexity of today's supply chains and the number of members drawn in battle of supply chain but real problem is creating right software for supply chain. However, the foremost goods are not only inspiring, they're to be expected to turn into the model for future supply chain management and logistics software products. Evaluating the different products on the marketplace can be difficult. According to Roberts, "If the industry progression isn't completely understood in the initial stage, it cannot be interpret into effectual software." This initial stage of the evaluation procedure should be pursuing by a review of the organization's area professionals. There are leading player are Capstan Systems, ClearCross, Express Action, From2, myCustoms, NextLinx and Vastera. "Area professional's means the management squad has member with skill in global trade and software expansion," says Roberts. Amongst the current evaluation ladder, Roberts recommend captivating a superior glance at who utilize the software and being guarded of press releases publicize new client additions. Discover out, for example, how many dealings the regular client processes via the system every month and how many of the clients have pay for supplementary component or extended to a improved consumer base. At last, Roberts stresses the value of integration. Integration is important for the reason that the client might be already have "legacy" structure, secondly, integration is the precondition for preserving and modernize the massive number of trade content data. {{Sowinski, Lara L. 2001}}.

SCM Challenge

The challenge of supply chain management is to restrain strategy with several constraints such as supplies, capacity (production and distribution), time and locality, shipping, storing faculty, line and merchandise sequencing, batch sizing of manufacture quantity, production switch over and down times, ramp up curves when toggling among timetable or machinery, operation planning, step of process in production and distribution, and bills of materials. The end outcome of all these limitation is "combinatorial explosion".

In a study of Levis Strauss Corporation in year 1996 Levi's losing the market and its revenue fall down from $7.1 billion to $4.1 billion (Girard, 2003). Then Levis Strauss management identifies the issue and takes action. Levis is launching segment of jeans so the Levis management decided to they required new channel for distribution were product can reach to market and customer easily then patch with Wal-Mart because they Wal-Mart have efficient logistic system and supply chain management to manage their high volume goods .But issue not resolve yet Levis executives unable track their good when it move s from factory to Wal-Mart warehouse and there is synchronization between sales and production..Chief Information officers, David Bergen take in hand these issues and implement information technology. This I.T system allowed executives to monitor at a glimpse how the goods are selling in compare to competitor product and movement of the goods in distributions channel , how many goods ready to deliver according to suppliers , sale of goods in the stores, and balance of between supply and demand. (Girard2003).

(León-Pena J.R. - e-Business and the Supply Chain Management)

Improving Quality &Solving Issue

In year 2008 Toyota motor Corp. was a crucial year. The corporation out step, General Motors as the globe's largest carmaker, as considered by sales size. But in year 2009 Toyota get rid of quality problem, Toyota recall approximately 4 million cars for gas gearstick that stick in ground mats, resultant increase in speed and also 100,000 Toyota Tundras are being back to factory for corrosion issue that can put in danger braking. Previously in 2009 Toyota recalled roughly 100,000 Corollas, Scions and Matrixes for flawed stopping in low heat. These matters jeopardize the Toyota reputation and those losing their name and reputation in the market, according to the Global Quality System April 2009 U.S. After lot of these issues Toyota attached with Ford Motor Co. for developing their quality issue. Ford sales are not like Toyota but they concern about quality. If any corporation manufactured goods in mass volume, so it's likely if in the line assembly or fault component utilize by mistake it will cause major problem, this kind of car maker have to apply superior IS system to supervise the complicated production. Ferrari trading 250 of 599s per year per year at a label cost of $260,000, whereas Toyota trade almost 9 million cars global in 2008, with a normal label price of additional than 10 times a smaller amount than a sole 599. However, with Ferrari accept no defects in its car; the corporation can keep much of the near $65 million they make on 599 trades alone each year. (Big problem for Toyota, 2010)

Functionalities & benefits of Supply chain management


SCOR Model enhance supply chain

A bunch of the works be done, and now at this time it's simple-to-apply model to get you going ahead. A set of US-based business industries working together in 1996 under the direction of top research companies AMR and consultant PRTM, produce a model called SCOR -- the Supply Chain Operations Reference model.

A year later they establish the Supply Chain Council, which is a worldwide, not-for-revenue trade union open to all organization involved in having supply chain efficiencies. Associate now contain a number of the largest companies in the planet, plus educational, government and consulting bodies.

The council go on with the SCOR model for developing, and these days SCOR model broadly consider as the internationally standard in supply chain modelling. Once any organization has given few thousand dollars for worldwide membership, the SCOR model is now free to use. Take a good case of Pacific Brands Clothing Company whose turnover is $750 million and annually they are supplying 130 million garments to Australian and New Zealand markets. They have used SCOR to align policies, processes, measures, tools and even roles with their SCM. {{Keates, Owen 2001}}.

Wal-Mart's supply chain model and Risks Factor

There is no distrust Wal-Mart has extraordinarily and well-organized supply chain, marvellous potency in high-performance supply chain management and supply chain management is spine of several services operations. There is no doubt on Wal-Mart how they offer the good quality product at low cost. Wal-Mart has one of the best supply chain specialists who design robust architecture for supply chain process. Wal-Mart has several distribution centres which need well organized supply chain and connected with his supplier of clothes, paper goods and which provide Wal-Mart retail stores sales details for next production operation and it's directly related to the inventory cost. According to Mr. Castro-Wright CEO of Wal-Mart and President of global com and global sourcing at Wal-Mart Stores Inc. since June 2010, Mr. Wright said buy direct purchasing is decrease by 5-15 % across the supply chain inward 5 years and it's reflect on their money banks which is $4bn-$12bn saving and Wal-Mart by now set up four international merchandise hub and for future they are planning for purchase a general store new era products and for licensed Disney character clothing. Wal-Mart is also doing research for new tactic for marketplace in that arena. They are done pilot test on direct purchasing of vegetables and fresh fruits for its retail stores which situated in USA, Canada and Mexico, Wal-Mart got expected result from his preliminary pilot test which confirm 10 % decrement in purchasing cost. (Wal-Mart takes aim at supply chain cost).

After this test Wal-Mart continue this series with current type which includes frozen food, seafood and dry packaged groceries. The main benefit of direct purchasing is huge saving in term of time and money and it's also assist Wal-Mart to establish strong relationship with their supplier and improve their quality of products to satisfy the customer and gain competitive advantage in market.

Hence it can achieve after examination of supply chain both external and internal aspect. It's entirely is accomplish by harmonization of information technology which facilitate superior selling competence.


Due to the problematical stage to which Wal-Mart have construct its architectures, it has a superior and proper way to apply the tactic and agenda line up the supply chains, as well as focused on the innovation in the development of new project.

However in view of the all factor the overall risk in international-level procurement, adherence in supervision government check standards for vegetables and fruits, threat interconnected to consistency of quality. If what happen Wal-Mart have recall his vegetable and fruit from stores which directly impact on customer, suppliers and loss in millions to Wal-Mart. Wal-Mart have think his most important risk as the primary purchaser and distributor of freight.


The analysis is base on Dustin and Clas Ohlson two case study which found in appendix section of the report. In both case studies the coordination between top level management and SCM activities is lacking. Both companies have different products and different market channels, based on heavily on the logistic and supply chain performance. This part covers all details of top management role in this case companies. The findings are presented in the form of four archetypes.

The supply chain thinker

The top level management executives have engage in when different purchasing deals are made, appointing a new suppliers and liability borders with supply chain associate are estimated and changed. Dustin and Clas Ohlson have both occupied a channel leader point in the supply chain where the processes are to be optimised, autonomous from company's borders. The focal point of the supply chain thinker's on their supply chain processes does not mean that they neglect the other managerial functions and activities. In reality, mainly of the supply chain thinker's thought is given to their personal and the other supply chain associate administrations. The cross functional conversation which create interface among continuously evaluated and developed, becomes a key issue. Indeed the top level management have to focus on the knowing about what other members are doing the organizations in order to modernize supply chain and logistic activities as well as top management needed to maintain coordination with IT department and cross functional fellowship, because they are work like catalyst to enhance any work in the organization. And also up to date with their supplier and manufacturers and sharing the information with their distributors and participation on the trade fairs. A companies need to improve the edge and synchronization between other functions in that case if company do have a logistic manager and only the warehouse manager or other person who manage those activity that time. So it's not looks like and possible for single person responsibility for complete flow of products from suppliers to the company and further on to the customers. The alternative of this situation is allocating the task between a number of people in the top management teams, this circumstances force them to commune and intermingle with logistics matter. Therefore represents with the purpose of supply chain management and logistics naturally turn into ingredient of top management's plan. For example top management meetings, strategy planning, etc.

The relationship manager

As an important additional archetype to the supply chain thinker is the relationship manager. The additional focal point on cross-functional processes, the more important relationships become, both inside and outside several functions and among organization. Within the organization close contact and together decided objective are seen as an essential requirement and merge with in queue among the traditional supply chain management literature. When discussion move towards outside relationship, latest years' supply chain management literature (Barratt, 2004, Lambert and Cooper, 2000) declare that it is not possible for a organization to contain seal supply chain management support and relationship with all other supply chain associate because of its source strong character (Barratt, 2004). As an alternative, the main job for the relationship manager understand and make a decision on the interface with other supply chain associate on a range from combined to operation-base relationships, and decide what form of relationship is the generally fit for the time and situation given.

As direction for the judgement of appropriate categories of relationships, the relationship manager explanation in phrase of efficiency and effectiveness not for the single organization mixed up, except for the entire supply chain. The studies illustrate that in supply chains characterised with brutal struggle with commodities products, the cost mechanic still has a vital role to play. In other words, still if several relationships with contractors are combined, this is not essentially forever so and from time to time a "tough", transaction-based negotiation approach persistent in cost is more suitable. The relationship manager thus clearly differentiate supply chain management theory's basic necessity for a organization judgment (Mentzer et al., 2001) on one hand, and what kind of relationship that is fit on the other. Relationship based on reliance, joint risk sharing, etc. is not constantly the most accurate type of relationship.

The controller

The controller's main job is to determine, follow up and manage menstruations' in the organization as well as in the supply chain. Every associate of the top level management panels in the case organization pursue key instrument for their industry on a day by day basis and the measurements are seen as a requirement for triumphant change. Key performance indicators (KPIs) linked to activities and functions as well as procedure are chased depending on the wants and requirements for the various divisions of the organization. For example, the warehouse managers are going on the behalf of sales quantities as well as the quantity of the sold freight, while marketing managers judging the sales in various customer segments. An instant evaluation of the KPIs used is also done in order to avoid unnecessary ones.

A condition for the measurement is an appropriate and well-functioning IT system. The systems are in both case companies made in-house and time by time it need to changes and develop the system according to the every single organization requirements. Various kinds of reports and measures are constantly made presented. In this job, many top management associates have had individual participation and the expansion of the IT systems is measured as a strategic affair. The implementation of the IT system is important for the progress of the exterior relationships in the supply chain. In the case both companies Dustin and Clas Ohlson they are using their IT system in term of gathering the information about prices and logistics performance of their suppliers. Indeed IT systems grant access to essential information required to manage and develop the supply chain (Tan, 2001).This reflected the value of, and connection among, the IT system on the one hand and winning supply chain relationships on the other (Towers and Burnes, 2008; Tan, 2001).

The organiser for the future

In the future the logistic operations consider inside and among the organization in the supply chain as an engine for the organization as soon as it move towards to additional opportunity driven. In today scenario the most of the markets are facing highly fluctuating market vary and, as a result, which offer companies too many opportunities for those organization who efficient to gain the advantage. In such marketplace, the dictate price of the organization is that of lost sales because their supply chain is not capable to handle this type situation. The skill needed to adapt constantly supply chain operations, usually as well as awareness on how to set up and design interfaces among the roles and performers in the supply chain, therefore turn into a key issue for the organiser for the future. It does not mean the organiser personally involved in all change programmers and interferes in other activities of the organization. But, the major duty for the top management panel is concerned with development of the company in all area, what can be labelled as the company's dynamic capabilities (Teece et al., 1997) so that the corporation can ready for any circumstances for competitive market and provide more flexibility. By building strong infrastructure for executives meeting low management to developed the mutual understanding, IT systems, flat organization structure etc and assigning the employees a great degree of freedom and duty to form an environment of unbroken learning and support investments in resources such as warehouses, top level management organises for better future and success.