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The Unicomer Group operates over 400 stores in Central America, the Caribbean, and the United States. It sells low-price home furnishing products around the Latin American Region. These include furniture and accessories for kitchens, bedrooms, living rooms, bathrooms and children's rooms. The management of Consumers realizes that consumers want more goods and services to improve their standard of living. The problem is they make choices about goods and services that have long-term consequences for the environment. In our modern world, organizations need to show responsibility. This means that they use resources efficiently, do not harm the environment and consider how what they do affects the ability of future generations to meet their needs. Unicomer is seeking to alter their supply chains so as to be a responsible organization that adheres to the principles of environmental sustainability and increased efficiency and effectiveness that contributes to higher profits.
When consumers go to a retailer like Unicomer, they will be looking at the different ranges of products and how they are presented. They may also look for quality customer service. However, consumers may not be aware that before products reach them, they must move from being raw materials through a variety of stages to become finished products suitable for sale. This is known as the supply chain. The supply chain involves a flow of production and processes through each of the three industrial sectors: primary, secondary and tertiary which is the stage at which UNICOMER is particularly concerned with.
Review of Academic Literature
Unicomer, as management specialist Chandler (1980) states in his study of family owned institutions that organizations such as these are called 'managerial enterprises' as it is not governed wholly by the owners; there is a clear dichotomy between the ownership and control that deals with strategic goals and objectives such as supply chain management. Based on further review of the literature and management practice, it is clear that there is a need for some level of coordination of activities and processes within and between organizations in the supply chain that extends beyond logistics. Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy. Drucker (1998) highlights that this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies.
During the past decades, globalization, outsourcing and information technology have enabled many organizations like Unicomer, the opportunities to operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities. According to Lambert (2000), operating an integrated supply chain requires a continuous information flow.
Managing the Supply Chain
The family-run Unicomer group classifies the decisions for supply chain management into two broad categories -- strategic and operational. As the term implies, strategic decisions are made typically over a longer time horizon. These are closely linked to the corporate, and guide supply chain policies from a design perspective. On the other hand, operational decisions are short term, and focus on activities over a day-to-day basis. The effort in these types of decisions is to effectively and efficiently manage the product flow in the "strategically" planned supply chain. There are four major decision areas in supply chain management: 1) location, 2) production, 3) inventory, and 4) transportation (distribution), and there are both strategic and operational elements in each of these decision areas. The management of Unicomer concurs that successful SCM in requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario: the current purchasing department places orders as requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand; this is known as 'Just in Time' supply. Information shared between supply chain partners can only be fully leveraged through process integration. Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information.
With regards to environmental sustainability, according to a Managing director of a Courts, Unicomer branch system-wide changes is being considered using a cross-functional team with the goal of reducing waste and investment in inventory. Traditional measures of manufacturing efficiency and utilization were compared with proposed measurements of through-put, investment in inventory, and operating expense. The primary sector involves the development of the raw materials. Unicomer is not a primary sector organization but it needs raw materials to develop its products. It therefore works closely with primary sector suppliers to ensure a sustainable impact on the people and the environment in which it operates.
An important aspect that has so far been exempted from supply chain is where chemicals are involved e.g. electronics. The management attempted to design ways in which improve this aspect but have so far been largely unsuccessful. One option is to hire chemical management services with suppliers in which the latter may be responsible for procurement, inventory management, data tracking and waste management. The company is able to use chemical products more efficiently, enhancing productivity and decreasing waste. In some respects the argument is really one of core competency. But activity seems to have a large cost attached that Unicomer may not be in position to consider. Another aspect of sustainable supply chain management that could be attempted is to research possible uses of previously discarded material. In most instances, a company pays for a quantity of material and then uses a certain percentage of that material in the manufacture of its product while discarding the remainder. In essence, it pays for the original materials, it pays for the labour, electricity and other inputs to convert that material into a product and then pays to discard the "waste". If the third category can be minimized or avoided by transforming the "waste" into a by-product as an input for its own or some other company's product, a financial gain will have been achieved.
Unicomer have pursued the relatively cost effective ways of possible waste disposal strategies by switching to re-usable packaging systems. Re-usable packaging can reduce solid waste, decrease product damage and eliminate ergonomic and safety issues when designed properly with the supplier and the customer in mind. It was recently given a limited run by management but has so far been unsuccessful due to the extremely large catalogue of items they deal with.
Unicomer has so far expressed much interest in terms of rehabilitating their systems of supply chain management that can improve their financial status as well promoting environmental ethics. However as can be deduced they have not had a very high success rate. What can be the cause of this failure? Willingness on the part of the Unicomer management? Maybe the cost/benefits of sustainable SCM is not in the company's favour? How can they improve the situation?