UNIT 18:GLOBAL BUSINESS ENVIRONMENT lo 2:
Description: UNIT 18:GLOBAL BUSINESS ENVIRONMENT lo 2: Determine the strategic complexities associated with operating in a global environment UNIT 18:GLOBAL BUSINESS ENVIRONMENT M2: CRITICALLY ANALYSE STRATEGIC CHALLENGES IN CONTEXT OF RISK AND
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slide2. UNIT 18:GLOBAL BUSINESS ENVIRONMENT lo 2: Determine the strategic complexities associated with operating in a global environment<br>
slide3. UNIT 18:GLOBAL BUSINESS ENVIRONMENT
M2: CRITICALLY ANALYSE STRATEGIC CHALLENGES IN CONTEXT OF RISK AND DIVERSIFICATION STRATEGIES AND THE SUPPLY CHAIN<br>
slide4. The complexities of the international supply chain management A supply chain is a global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash. A supply chain, in view of the above supply chain management definition, comprises a network of both entities and processes (the engineered flow). A supply chain doesn't have to be global, but the massive chains that interest us in this course -the ones that run through corporations, are decidedly global in scope.<br>
slide5. The complexities of the international supply chain management Figure below illustrates a very basic supply chain (one that is not necessarily global) with three entities--a producer with one supplier and one customer.<br>
slide6. The complexities of the international supply chain management A supply chain involves, directly or indirectly, everyone and everything required to extract materials, transform them into a product, and sell the product to a user.
Supply chains include various entities, such as raw material extractors, service and component suppliers, a material product manufacturer or a producer of services, distributors, and end customers.
Supply chain management structures vary based on demand history, business focus, and needs for connectivity, technology, and equipment.<br>
slide7. The complexities of the international supply chain management Supply chains can be viewed in terms of processes, such as the gathering and processing of marketing data, distribution and payment of invoices, processing and shipping of materials, scheduling, fulfilment of orders, and so forth. Such functions cut across entities.
Supply chains include various flows as well as various entities. Materials and services flow from suppliers toward customers; payment flows from customers toward suppliers; information flows both ways. Supply chains also run in reverse, starting with the customer who sends back such items as components for replacement or repair, returned goods for re-manufacture, and obsolete goods for recycling or disposal. The reverse chain, like the forward chain, also comprises information flows and cash or credits.<br>
slide8. The complexities of the international supply chain management It incorporates management processes that integrate the network of suppliers, manufacturers, warehouses and retail outlets so that the right type of goods are sourced, supplied, produced and shipped in the right quantities, to the right locations, at the right time and are received in sound condition. To achieve successful integration, flows of information (such as purchase orders, shipping notices, waybills and invoices), materials (including raw and finished products) and finances (payments and refunds) through the supply chain must be co-ordinated effectively.<br>
slide9. The complexities of the international supply chain management Going “global” through global supply chains helps facilitate entry into new markets, enables business growth and provides firms with access to new technologies through partnerships with foreign firms. Supply chain management touches all of an organization’s functions. To be successful, it requires focused effort across the entire company and collaboration with all outside suppliers and service providers. This means that supply chain management must have a multidimensional approach, involving people, processes and technology.<br>
slide10. The complexities of the international supply chain management Supply chain management touches all of an organization’s functions. To be successful, it requires focused effort across the entire company and collaboration with all outside suppliers and service providers. This means that supply chain management must have a multidimensional approach, involving people, processes and technology.<br>
slide11. The complexities of the international supply chain management Globalisation has allowed businesses to expand across many countries and provided more choice of suppliers. However, as supply chains become more complex, additional layers of risk are added. The acceleration of globalisation over the past 20 years has been associated with major changes in supply chains.<br>
slide12. The complexities of the international supply chain management The rapid emergence of new global opportunities for production and sales, reductions in transport and logistics costs, and the new management imperatives arising from quarterly and other reporting requirements, have provided a strong impetus to creating supply chains which have a wider global reach and at the same time achieve the objectives of reducing stocks and tie-up capital. This has resulted in supply chains becoming more extensive and complex.<br>
slide13. The complexities of the international supply chain management<br>
slide14. The complexities of the international supply chain management Supply chain management touches all of an organization’s functions. To be successful, it requires focused effort across the entire company and collaboration with all outside suppliers and service providers. This means that supply chain management must have a multidimensional approach, involving people, processes and technology.
People are key to supply chain management because they are the core of organizations. For successful supply chain management, the people involved must have the skills and knowledge to manage sourcing, manufacturing, storage and transportation of products. They must have a solid view of the company’s strategic business vision and know how their role fits into the overall functioning of the supply chain.<br>
slide15. The complexities of the international supply chain management Processes: The processes in supply chain management are the actions taken with the aim of satisfying customers. They include all functions involved in the supply chain: sourcing, distribution, transportation, warehousing, sales and customer service. They also include all actions performed by external companies that are part of the supply chain.
Technology: Is used in the supply chain to connect people and processes. However, people involved in the supply chain will not use technology unless they find it easy to adopt. Careful selection and implementation of the supply chain technologies a company uses is essential for supply chain success.<br>
slide16. The complexities of the international supply chain management . The concept of "less is more" does not so easily apply to supply chain management. As organizations look to increase revenues by expanding their product portfolios, they're also introducing complexity and risk into their supply chains. While it might seem like a good idea to just reduce your portfolio overall, that's not always an option.
There are three main sources of complexity in the supply chain: complexity, globalization, and supply chain trends and internal pressures. These will be looked at in detail below.<br>
slide17. The complexities of the international supply chain management 1. Customer Accommodation. Meeting the needs and demands of customers is by far the biggest challenges facing today's supply chain professionals. Not only do customers expect to receive their products in a timely manner, they also want choices when it comes to when (and how) those products are delivered. Adding further to the complexity is the demand for visibility, which has increased in importance in recent years. Meeting all these demands can be daunting.<br>
slide18. The complexities of the international supply chain management Globalization. While many supply chains are globalizing, doing so will no doubt introduce more complexity. Beyond juggling transportation logistics, adopting a globalized supply chain means that you will need to stack and modify your products in order to accommodate the cultures of different markets. You will also need to consider legal and regulatory issues that can arise when working with different countries.<br>
slide19. The complexities of the international supply chain management Working and developing relationships with suppliers outside of your home base can take a lot of time and effort, with no guarantee of results. Understanding your suppliers' customs and dealing with the differences in quality can become a major source of frustration if a proper sourcing structure isn't created.<br>
slide20. The complexities of the international supply chain management Supply Chain Trends and Internal Pressures. Sometimes the causes for complexity don't come from outside sources. Many issues within your supply chain derive simply from the way the business works. Some organizations require custom processes with specialized suppliers, which can restrict options and make your supply chain less responsive.<br>
slide21. The complexities of the international supply chain management Other divisions of your organization might also make decisions that greatly impact the supply chain department.
To be successful an understanding of where the complexities lie in the supply chain, must be clear in order to get to the source of the problem and streamline issues to help the organization.<br>
slide22. The complexities of the international supply chain management What is our first reaction when we hear about supply chain complexity? If we are honest, the term often conjures up negative connotations and our gut feeling is that this is something to be avoided or neutralized where possible. But what is really behind the mask?
In order to understand what supply chain complexity means, let us first examine the word “complexity”.<br>
slide23. The complexities of the international supply chain management Complexity describes a system of multiple parts, interconnected in a non-linear style. In non-formal terms, complexity is:
An intricately structured and variable system.
Highly sensitive in its adjustment to the initial conditions or to even minor changes, creating a vast number of development possibilities.
A large collection of interacting components.
Difficult to understand or examine due to its design and/or operations.
A system in process, changing and developing over time.<br>
slide24. The complexities of the international supply chain management Supply chain complexity is therefore a system with a broad range of variations. A typical example would be a globally operating corporation with multiple production sites, all of which are in contact with numerous distribution centers worldwide, supplying thousands of end points.<br>
slide25. The complexities of the international supply chain management The research found that firms are experiencing increased complexity due to a constantly growing number of products, customers, channels, and geographies.
The four primary sources of supply chain complexity are summarized as:
Customer Accommodation: Customers expect ever-increasing speed and visibility of process, and variety and customization of products.
Operations Globalization: As supply chains expand into more varied global customer markets, substantial variations in existing supply chain processes must occur.<br>
slide26. The complexities of the international supply chain management Supplier Complexity: Globalization means developing and maintaining strategies to overcome the complex and often serious issues associated with local sourcing.
General Business and Supply Chain Trends: The industry push to Omni channel supply chains is exacerbated by day-to-day business concerns, like technology turnover or company mergers.<br>
slide27. The complexities of the international supply chain management Complexity has two major effects. The first is an increase in the functionality of the system. Clearly if modern day big box retailers could not leverage global manufacturing and distribution capabilities, they would have none of their current advantages of wide reach, low prices to consumers and healthy returns to shareholders (at least during good economic times). No one would argue that the Wal-Mart of today is significantly more complex than the one started by Sam Walton several decades ago.<br>
slide28. The complexities of the international supply chain management The flip side of increase in complexity is that, left unchecked, growth in complexity can result at best in serious downswings in efficiency or at worst in catastrophic failures that may have consequences for the system and its environment. Examples abound today, and the quickest one could reach for is the effect of Chinese plant workers strike on the delivery of the latest Apple products and the accompanying public relations issues for the company. Supply chain complexity management can thus become a major challenge for today’s managers.<br>
slide29. REFERENCES Golding, I. Globalisation and risks for business. University of Oxford: James Martin 21st Century School,.
What is Supply Chain Management? Definition and Introduction | AIMS Lecture. (2018). Retrieved from http://www.aims.education/study-online/what-is-supply-chain-management-definition/
Roy, E. (2018). What is global supply chain management? - Trade Ready. Retrieved from http://www.tradeready.ca/2017/topics/supply-chain-management/global-supply-chain-management/<br>
slide30. REFERENCES 3 Main Sources of Supply Chain Complexity - Inbound Logistics. (2018). Retrieved from https://www.inboundlogistics.com/cms/article/main-sources-of-supply-chain-complexity/
https://www.tefen.com/insights/industries/Consumer_Goods/supply_chain_complexity__dealing_with_a_dynamic_system [Accessed 5 Oct. 2018].
Staff, M. (2018). How to Survive Supply Chain Complexity. [online] Material Handling and Logistics (MHL News). Available at: https://www.mhlnews.com/global-supply-chain/how-survive-supply-chain-complexity [Accessed 5 Oct. 2018].<br>
slide31. REFERENCES 3 Main Sources of Supply Chain Complexity - Inbound Logistics. (2018). Retrieved from https://www.inboundlogistics.com/cms/article/main-sources-of-supply-chain-complexity/
https://www.tefen.com/insights/industries/Consumer_Goods/supply_chain_complexity__dealing_with_a_dynamic_system [Accessed 5 Oct. 2018].
Staff, M. (2018). How to Survive Supply Chain Complexity. [online] Material Handling and Logistics (MHL News). Available at: https://www.mhlnews.com/global-supply-chain/how-survive-supply-chain-complexity [Accessed 5 Oct. 2018].<br>
slide32. REFERENCES MARTIN, D. (2018). Top 5 reasons for supply chain complexity - Measuring and monitoring complexity to generate early warnings. [online] Academia.edu. Available at: http://www.academia.edu/393047/Top_5_reasons_for_supply_chain_complexity_-_Measuring_and_monitoring_complexity_to_generate_early_warnings [Accessed 5 Oct. 2018].<br>
slide3. UNIT 18:GLOBAL BUSINESS ENVIRONMENT
M2: CRITICALLY ANALYSE STRATEGIC CHALLENGES IN CONTEXT OF RISK AND DIVERSIFICATION STRATEGIES AND THE SUPPLY CHAIN<br>
slide4. The complexities of the international supply chain management A supply chain is a global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash. A supply chain, in view of the above supply chain management definition, comprises a network of both entities and processes (the engineered flow). A supply chain doesn't have to be global, but the massive chains that interest us in this course -the ones that run through corporations, are decidedly global in scope.<br>
slide5. The complexities of the international supply chain management Figure below illustrates a very basic supply chain (one that is not necessarily global) with three entities--a producer with one supplier and one customer.<br>
slide6. The complexities of the international supply chain management A supply chain involves, directly or indirectly, everyone and everything required to extract materials, transform them into a product, and sell the product to a user.
Supply chains include various entities, such as raw material extractors, service and component suppliers, a material product manufacturer or a producer of services, distributors, and end customers.
Supply chain management structures vary based on demand history, business focus, and needs for connectivity, technology, and equipment.<br>
slide7. The complexities of the international supply chain management Supply chains can be viewed in terms of processes, such as the gathering and processing of marketing data, distribution and payment of invoices, processing and shipping of materials, scheduling, fulfilment of orders, and so forth. Such functions cut across entities.
Supply chains include various flows as well as various entities. Materials and services flow from suppliers toward customers; payment flows from customers toward suppliers; information flows both ways. Supply chains also run in reverse, starting with the customer who sends back such items as components for replacement or repair, returned goods for re-manufacture, and obsolete goods for recycling or disposal. The reverse chain, like the forward chain, also comprises information flows and cash or credits.<br>
slide8. The complexities of the international supply chain management It incorporates management processes that integrate the network of suppliers, manufacturers, warehouses and retail outlets so that the right type of goods are sourced, supplied, produced and shipped in the right quantities, to the right locations, at the right time and are received in sound condition. To achieve successful integration, flows of information (such as purchase orders, shipping notices, waybills and invoices), materials (including raw and finished products) and finances (payments and refunds) through the supply chain must be co-ordinated effectively.<br>
slide9. The complexities of the international supply chain management Going “global” through global supply chains helps facilitate entry into new markets, enables business growth and provides firms with access to new technologies through partnerships with foreign firms. Supply chain management touches all of an organization’s functions. To be successful, it requires focused effort across the entire company and collaboration with all outside suppliers and service providers. This means that supply chain management must have a multidimensional approach, involving people, processes and technology.<br>
slide10. The complexities of the international supply chain management Supply chain management touches all of an organization’s functions. To be successful, it requires focused effort across the entire company and collaboration with all outside suppliers and service providers. This means that supply chain management must have a multidimensional approach, involving people, processes and technology.<br>
slide11. The complexities of the international supply chain management Globalisation has allowed businesses to expand across many countries and provided more choice of suppliers. However, as supply chains become more complex, additional layers of risk are added. The acceleration of globalisation over the past 20 years has been associated with major changes in supply chains.<br>
slide12. The complexities of the international supply chain management The rapid emergence of new global opportunities for production and sales, reductions in transport and logistics costs, and the new management imperatives arising from quarterly and other reporting requirements, have provided a strong impetus to creating supply chains which have a wider global reach and at the same time achieve the objectives of reducing stocks and tie-up capital. This has resulted in supply chains becoming more extensive and complex.<br>
slide13. The complexities of the international supply chain management<br>
slide14. The complexities of the international supply chain management Supply chain management touches all of an organization’s functions. To be successful, it requires focused effort across the entire company and collaboration with all outside suppliers and service providers. This means that supply chain management must have a multidimensional approach, involving people, processes and technology.
People are key to supply chain management because they are the core of organizations. For successful supply chain management, the people involved must have the skills and knowledge to manage sourcing, manufacturing, storage and transportation of products. They must have a solid view of the company’s strategic business vision and know how their role fits into the overall functioning of the supply chain.<br>
slide15. The complexities of the international supply chain management Processes: The processes in supply chain management are the actions taken with the aim of satisfying customers. They include all functions involved in the supply chain: sourcing, distribution, transportation, warehousing, sales and customer service. They also include all actions performed by external companies that are part of the supply chain.
Technology: Is used in the supply chain to connect people and processes. However, people involved in the supply chain will not use technology unless they find it easy to adopt. Careful selection and implementation of the supply chain technologies a company uses is essential for supply chain success.<br>
slide16. The complexities of the international supply chain management . The concept of "less is more" does not so easily apply to supply chain management. As organizations look to increase revenues by expanding their product portfolios, they're also introducing complexity and risk into their supply chains. While it might seem like a good idea to just reduce your portfolio overall, that's not always an option.
There are three main sources of complexity in the supply chain: complexity, globalization, and supply chain trends and internal pressures. These will be looked at in detail below.<br>
slide17. The complexities of the international supply chain management 1. Customer Accommodation. Meeting the needs and demands of customers is by far the biggest challenges facing today's supply chain professionals. Not only do customers expect to receive their products in a timely manner, they also want choices when it comes to when (and how) those products are delivered. Adding further to the complexity is the demand for visibility, which has increased in importance in recent years. Meeting all these demands can be daunting.<br>
slide18. The complexities of the international supply chain management Globalization. While many supply chains are globalizing, doing so will no doubt introduce more complexity. Beyond juggling transportation logistics, adopting a globalized supply chain means that you will need to stack and modify your products in order to accommodate the cultures of different markets. You will also need to consider legal and regulatory issues that can arise when working with different countries.<br>
slide19. The complexities of the international supply chain management Working and developing relationships with suppliers outside of your home base can take a lot of time and effort, with no guarantee of results. Understanding your suppliers' customs and dealing with the differences in quality can become a major source of frustration if a proper sourcing structure isn't created.<br>
slide20. The complexities of the international supply chain management Supply Chain Trends and Internal Pressures. Sometimes the causes for complexity don't come from outside sources. Many issues within your supply chain derive simply from the way the business works. Some organizations require custom processes with specialized suppliers, which can restrict options and make your supply chain less responsive.<br>
slide21. The complexities of the international supply chain management Other divisions of your organization might also make decisions that greatly impact the supply chain department.
To be successful an understanding of where the complexities lie in the supply chain, must be clear in order to get to the source of the problem and streamline issues to help the organization.<br>
slide22. The complexities of the international supply chain management What is our first reaction when we hear about supply chain complexity? If we are honest, the term often conjures up negative connotations and our gut feeling is that this is something to be avoided or neutralized where possible. But what is really behind the mask?
In order to understand what supply chain complexity means, let us first examine the word “complexity”.<br>
slide23. The complexities of the international supply chain management Complexity describes a system of multiple parts, interconnected in a non-linear style. In non-formal terms, complexity is:
An intricately structured and variable system.
Highly sensitive in its adjustment to the initial conditions or to even minor changes, creating a vast number of development possibilities.
A large collection of interacting components.
Difficult to understand or examine due to its design and/or operations.
A system in process, changing and developing over time.<br>
slide24. The complexities of the international supply chain management Supply chain complexity is therefore a system with a broad range of variations. A typical example would be a globally operating corporation with multiple production sites, all of which are in contact with numerous distribution centers worldwide, supplying thousands of end points.<br>
slide25. The complexities of the international supply chain management The research found that firms are experiencing increased complexity due to a constantly growing number of products, customers, channels, and geographies.
The four primary sources of supply chain complexity are summarized as:
Customer Accommodation: Customers expect ever-increasing speed and visibility of process, and variety and customization of products.
Operations Globalization: As supply chains expand into more varied global customer markets, substantial variations in existing supply chain processes must occur.<br>
slide26. The complexities of the international supply chain management Supplier Complexity: Globalization means developing and maintaining strategies to overcome the complex and often serious issues associated with local sourcing.
General Business and Supply Chain Trends: The industry push to Omni channel supply chains is exacerbated by day-to-day business concerns, like technology turnover or company mergers.<br>
slide27. The complexities of the international supply chain management Complexity has two major effects. The first is an increase in the functionality of the system. Clearly if modern day big box retailers could not leverage global manufacturing and distribution capabilities, they would have none of their current advantages of wide reach, low prices to consumers and healthy returns to shareholders (at least during good economic times). No one would argue that the Wal-Mart of today is significantly more complex than the one started by Sam Walton several decades ago.<br>
slide28. The complexities of the international supply chain management The flip side of increase in complexity is that, left unchecked, growth in complexity can result at best in serious downswings in efficiency or at worst in catastrophic failures that may have consequences for the system and its environment. Examples abound today, and the quickest one could reach for is the effect of Chinese plant workers strike on the delivery of the latest Apple products and the accompanying public relations issues for the company. Supply chain complexity management can thus become a major challenge for today’s managers.<br>
slide29. REFERENCES Golding, I. Globalisation and risks for business. University of Oxford: James Martin 21st Century School,.
What is Supply Chain Management? Definition and Introduction | AIMS Lecture. (2018). Retrieved from http://www.aims.education/study-online/what-is-supply-chain-management-definition/
Roy, E. (2018). What is global supply chain management? - Trade Ready. Retrieved from http://www.tradeready.ca/2017/topics/supply-chain-management/global-supply-chain-management/<br>
slide30. REFERENCES 3 Main Sources of Supply Chain Complexity - Inbound Logistics. (2018). Retrieved from https://www.inboundlogistics.com/cms/article/main-sources-of-supply-chain-complexity/
https://www.tefen.com/insights/industries/Consumer_Goods/supply_chain_complexity__dealing_with_a_dynamic_system [Accessed 5 Oct. 2018].
Staff, M. (2018). How to Survive Supply Chain Complexity. [online] Material Handling and Logistics (MHL News). Available at: https://www.mhlnews.com/global-supply-chain/how-survive-supply-chain-complexity [Accessed 5 Oct. 2018].<br>
slide31. REFERENCES 3 Main Sources of Supply Chain Complexity - Inbound Logistics. (2018). Retrieved from https://www.inboundlogistics.com/cms/article/main-sources-of-supply-chain-complexity/
https://www.tefen.com/insights/industries/Consumer_Goods/supply_chain_complexity__dealing_with_a_dynamic_system [Accessed 5 Oct. 2018].
Staff, M. (2018). How to Survive Supply Chain Complexity. [online] Material Handling and Logistics (MHL News). Available at: https://www.mhlnews.com/global-supply-chain/how-survive-supply-chain-complexity [Accessed 5 Oct. 2018].<br>
slide32. REFERENCES MARTIN, D. (2018). Top 5 reasons for supply chain complexity - Measuring and monitoring complexity to generate early warnings. [online] Academia.edu. Available at: http://www.academia.edu/393047/Top_5_reasons_for_supply_chain_complexity_-_Measuring_and_monitoring_complexity_to_generate_early_warnings [Accessed 5 Oct. 2018].<br>