N20F12 Business With Supply Chain Assessment Answers
Answer:
Introduction
The Logistics and supply chain management are two interrelated terms in reference to business context involved in production and selling if goods. The logistics are simply group of tasks that are carried out within an organization from getting the right products to right customer at right time. While, the supply chain can be understood as the large network of different firms coordinating their activities, for delivery of a product to market (Christopher, 2016). The present report will discuss about sustainable supply chain activities and policies that are related to it. For better understanding, Marks and Spencer (M&S) plc Ltd. has been chosen as preferred organization. It is a well known retailer company of UK that deals in diverse products. The report will throw light on various policies that are taken for managing supply chain efficiently.
Company background
Marks and Spencer (M&S) is a public limited company which was established about 134 years ago in 1884 by Michael Marks and Thomas Spencer headquartered in London, UK. The company deals in fashion clothing, home and luxury food products. The organisation has more than 900 stores all over UK and has its international expansion as well in many other countries. The firm made a rapid growth in domestic market by following the policy of selling only British-made products (Islam & et.al., 2013). M&S entered into many long term deals for selling clothes and food. The company crafted number of initiatives to maintain healthy supply chain management activities that are sustainable.
Key sustainable policies and their impacts
The foremost requirement at present to maintain the sustainability within supply chain management is to become environment friendly. There are numerous environmental risks that have made this even more complicated. Consumers are also becoming aware of their usage and its effect over environment. Therefore, business organisations need to make hard efforts for mitigating this risk (Dekker & et.al., 2013). The M&S assert that natural resources used for manufacturing varied products have created a pressure. Along with this the global stewardship is also becoming poor which has a direct impact on their cost. Besides this, it makes very hard to access raw materials and maintain the supply chain. Hence, as a trusted brand, they are committed to make sure that all the products are sourced in an ethical and sustainable way. For this, said firm is looking beyond its various operations (Carter & Liane Easton, 2011).
The company sells about 3 billion of goods every year that are supplied by more than 2000 suppliers. These items are manufactured from the materials that are sourced from different farms. Thus, there is a supplier vendor relationship with about 70 countries which makes the supply chain very complicated. The Marks and Spencer works for attaining the target of sustainability in supply chain through Plan A under which lots of policies are followed (Wang & et.al., 2016). Therefore there are some key factors which aid in maintain the sustainability with entire process:
- Principles for global supply- M&S makes it mandatory to follow the global sourcing principles for all suppliers and implement it within each one’s own supply chain. The organisation strives to attain goals with the help of clear standards with suppliers. To apply it strictly, regular visits are also done along with continuous improvement policy. In 1999, Ethical Trading Initiative (ETI) was created under which several principles were formulated and laid down with support of suppliers. The major objective was to make each supplier to comply with all the national regulations and local laws related to supply chain (Seuring, 2013).
- Transparency in supply chain- As the stated enterprise is involved in serving foods along with clothing, they try to maintain transparency in the supply chain in both direct and indirect relations. For this purpose, all the information is managed through Supplier Ethical Data Exchange (Sedex) and an internal software called product lifecycle management. This helps in observing entire supply chain and right sourcing of raw materials (Ahi & Searcy, 2013).
- Groceries supply code of practice- The firm try hard to maintain trustful and strong relationship with its suppliers. Through groceries supply code of practice, M&S lays down various requirements along with terms of trade which help in governance of trading relations between mentioned entity and suppliers of food and household goods. At the end of year a compliance report is prepared that is submitted to the Groceries code adjudicator.
- Supplier scorecard: The M&S introduced a supplier scorecard measure to help its supplier in enhancing the sustainability (Pettit, Fiksel & Croxton, 2010). As per this, various standards were laid down in food and clothes retailing. This scorecard measures various areas related to supply chain and process a steady approach towards reviewing the suppliers and their sustainability element.
- Training: The worker training programme is launched by M&S within the supply chain of clothing and home products. Besides this, supplier exchange meeting is also organised with suppliers so as to discuss over various supply chain issues and find solution regarding it (Dyckhoff, Lackes & Reese, 2013). The website is also developed where various kinds of information, policies and standards are shared for ease of suppliers.
Impact of policies related to sustainable supply chain
The major commitment and target of Marks and Spencer is set to facilitate customers with valuable goods that are of high quality. For the sake of this same purpose, the company has formulated Plan A to assure that each and every product is manufactured with full reliability. This target is set to be achieved till 2020 and expanded to 2025 so as to recover all the stages of supply chain. Moreover, M&S also makes a commitment to offer goods that are safe and of high quality which it promises to customers (Diabat & Govindan, 2011). As an impact there are lots of achievements that are attained by aforesaid venture:
- Improved performance: The stakeholders of respective firm want information about processes that are taken up for dealing with diverse issues. The transparency that was presented by M&S helped in improving its performance and betterment in sustainability scorecard index. As per the reports, the Fashion Transparency index is the leading fashion brand that makes a review at global level regarding how much information is revealed by companies about suppliers and their regular practices impacting social and environmental aspects. As per this, Marks and Spencer ranked 2ndwith 48% score, where maximum score was 50% (Prajogo & Olhager, 2012).
- Corporate rating: The stated entity performs continuous research on various sustainable practices that can aid in maintaining best supply chain practices. For this objective, company has made many community investments and CSR policies. This aids in covering a holistic approach towards supply chains sustainability by dealing with four major issues of waste resources, changes in climate, partnerships and health. For this approach, Oekom research which is the biggest sustainable investment ring and examines both social and environmental performance has give C+ score to M&S (Sarkis, Zhu & Lai, 2011).
- Certified social and environmental standard: As per the Plan A, company makes efforts to keep close check over supply chain related decisions, performance and strategies. The suppliers of organisation also fulfil their responsibility of sourcing goods from reliable places and supply it on ethical basis. In addition to this, the lone efforts of M&S are not sufficient without proper support of its suppliers. The firm also made a benchmark by becoming a first retail company to attain three carbon trust standards of water, waste management and carbon. Moreover, the suppliers do not send any of the wastes to landfills in UK (Kovács & Spens, 2011). Thus, the sustainability in supply chain helped in achieving various benchmarks and awards to Marks and Spencer.
Critical assessment of retailer’s commitment and progress
Commitment towards sustainability: As per this commitment, the M&S has set its target to become a leading sector regarding sustainable manufacturing as well as consumption. Within this, customers would be availed with high value products, and services. It has the major target by 2020 to sell 100% of its products to customers that are sourced from suppliers who have consistent governance structure synchronised with M&S requirements. While Gold, Seuring & Beske, (2010), have contradicted that company has continuously made innovation and novel standards that are mostly related to food retailing. While other areas related to commercial, product development, technical and agriculture should also be explored more. Thus, it has been evidenced that the rate of progress is comparatively slow which must be enhanced by working on sustainability factors in clothing and home products as well.
Commitment regarding product standards: The M&S has positioned itself as a trusted brand in UK market as it meets the concerned customers’ expectation regarding health and environment. Therefore it makes promise to facilitate consumers with legal, secure and quality products. For this objective, mentioned enterprise give major importance to safety and reliability of products and supply chain activities. They know well about the growing importance of making a healthy supply chain and plummeting the risk of fraud behaviour from supplier side. However, Flynn, Huo & Zhao, (2010) assert that there is an increased accountability of business of fulfilling legal as well as moral commitment. The claims made by organisation are prone to two types of risks which are brand integrity and product compositional claims. The earlier one is linked with approved supply chain; meeting specifications etc. while the later one is related to composition of good like nutrition information and products of industry standards.
Commitment towards suppliers: M&S also makes its commitment towards its different suppliers and support local suppliers through good working conditions and fair prices. The organisation has about 400 food suppliers at different locations among which 90% of them are at UK only. However as per the supply of food products, the company has to face a volatile market. Winter & Knemeyer, (2013) oppose that due to their profile related to food supply, there are issues related to inconsistent production volumes. Besides that there are different kinds of variations in agriculture which are quite unpredictable. There are disparities in seasonality as well as in demand of customers. So, to mitigate this drawback, M&S is trying to make their supply base more aligned and customisable which can be utilised in best and optimum way without substantial losses.
Thus, M&S have a defined structure regarding logistics and supply chain management where each activity is defined to all concerned people for the sake of minimal errors (Stock, Boyer & Harmon, 2010). Besides this, to maintain the highest quality in all its products, the firm has instructed suppliers to immediately inform about any quality issues. Moreover, company as well as suppliers are committed to respond and address the complaints made by the customers on priority basis. Therefore, diverse standards are laid down for each task within logistics and supply chain.
Comparing position on supply chain sustainability
The Marks and Spencer belongs to the retail chain of UK where many competitors are present in the same sector. Among these competitors, Asda is the major one who is giving a tough rivalry to M&S. The company was established in 1965 and it is a subsidiary organisation of Walmart. The stated business corporation deals in products like apparels, food, groceries and many more. The supply chain activities of Asda are ideal one as well where many efforts are made to have minimum adverse impact over environment (Beske, 2012). Besides this, it also maintains good relation with suppliers by giving them fair price for their services. It understands that for delivering the best quality of products, as per customer demands, it must be based on fair practices. Therefore, they are concerned for both sustainability as well as aiding suppliers in minimising environmental impacts.
Asda has introduced an online tool called Sustain and Save Exchange (SSE) which assists suppliers in diminishing the impact on environment. In addition to this, it also gives ideas related to creating efficient supply chain base. To work on this, the tool is supported through many live events that are free of cost. This tool helps suppliers to get ideas related to ways that enhances efficiency of resources (Sarkis, 2012). Here, information regarding best practices linked to supply chain practices is also shared. This idea is a very successful measure for Asda as this tool is mainly funded by trading teams. Hence, it becomes quite easy to engage organisation’s buyers. Through such practices, Asda has achieved a number of milestones mentioned below:
- More than 1250 suppliers got registered in SSE exchange.
- Through resource efficiency project, suppliers are able to save substantial costs.
- Carbon emission rate declined to more than 5%.
- Asda donated foods to make more meals through its CSR policy.
From the discussion made over sustainable policies of supply chain in Asda, the performance of M&S can be compared. Here it can be found that both the companies have made ideal efforts at their end to manage the supply chain in sustainable manner (Tummala & Schoenherr, 2011). The results obtained by both organisations are also appropriate which has aided in gaining various benchmarks and indices. However, the state of M&S can be positioned as a better one as the company is in profitable place because the senior director of food and logistics in Asda has moved into M&S as head of operations in Food supply chain. Craig Taylor has served in Asda since 2004 and in his long term career, he has made strong decisions and improvements in the supply chain activities. Therefore, it is expected that the joining of Taylor in M&S will be very profitable as he specialises in strategic developments, introducing change management and positive transformation. Moreover, the considerable experience of Taylor where he has a record of successful logistics development and programmes, his experience will prove to be precious (Kovács & Spens, 2011).
Conclusion
The logistics and supply chain management are the complementary concepts that are very significant for organisations involved in production and selling. In the present report, discussion over these aspects has been made with reference to Marks and Spencer which is a famous retail shop of UK. The report concludes that sustainable supply chain is a key concept for industries who are engaged in supplying raw materials and products from their suppliers. In M&S, various efforts and initiatives have been developed which can be considered as the ideal one for maintaining sustainability and improve relations with suppliers (Prajogo & Olhager, 2012). The report has discussed over various benchmarks and achievements that have resulted from the policies laid down by mentioned venture within its supply chain activities. In the end section, a comparison is made between supply chain activities of Asda and M&S who are the competitors in their sector. From this study it is found that M&S can be positioned at a better place due to the recruitment of Asda’s senior director in logistics and management.
References
Books and Journals
Ahi, P., & Searcy, C. (2013). A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of cleaner production, 52, 329-341.
Beske, P. (2012). Dynamic capabilities and sustainable supply chain management. International Journal of Physical Distribution & Logistics Management, 42(4), 372-387.
Carter, C. R., & Liane Easton, P. (2011). Sustainable supply chain management: evolution and future directions. International journal of physical distribution & logistics management, 41(1), 46-62.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (Eds.). (2013). Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
Diabat, A., & Govindan, K. (2011). An analysis of the drivers affecting the implementation of green supply chain management. Resources, Conservation and Recycling, 55(6), 659-667.
Dyckhoff, H., Lackes, R., & Reese, J. (Eds.). (2013). Supply chain management and reverse logistics. Springer Science & Business Media.
Flynn, B. B., Huo, B., & Zhao, X. (2010). The impact of supply chain integration on performance: A contingency and configuration approach. Journal of operations management, 28(1), 58-71.
Gold, S., Seuring, S., & Beske, P. (2010). Sustainable supply chain management and inter?organizational resources: a literature review. Corporate social responsibility and environmental management, 17(4), 230-245.
Islam, D. M. Z., Meier, J. F., Aditjandra, P. T., Zunder, T. H., & Pace, G. (2013). Logistics and supply chain management. Research in Transportation Economics, 41(1), 3-16.
Kovács, G., & Spens, K. M. (2011). Humanitarian logistics and supply chain management: the start of a new journal. Journal of Humanitarian Logistics and Supply Chain Management, 1(1), 5-14.
Pettit, T. J., Fiksel, J., & Croxton, K. L. (2010). Ensuring supply chain resilience: development of a conceptual framework. Journal of business logistics, 31(1), 1-21.
Prajogo, D., & Olhager, J. (2012). Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration. International Journal of Production Economics, 135(1), 514-522.
Sarkis, J. (2012). A boundaries and flows perspective of green supply chain management. Supply chain management: an international journal, 17(2), 202-216.
Sarkis, J., Zhu, Q., & Lai, K. H. (2011). An organizational theoretic review of green supply chain management literature. International Journal of Production Economics, 130(1), 1-15.
Seuring, S. (2013). A review of modeling approaches for sustainable supply chain management. Decision support systems, 54(4), 1513-1520.
Stock, J. R., Boyer, S. L., & Harmon, T. (2010). Research opportunities in supply chain management. Journal of the Academy of Marketing Science, 38(1), 32-41.
Tummala, R., & Schoenherr, T. (2011). Assessing and managing risks using the supply chain risk management process (SCRMP). Supply Chain Management: An International Journal, 16(6), 474-483.
Wang, G., Gunasekaran, A., Ngai, E. W., & Papadopoulos, T. (2016). Big data analytics in logistics and supply chain management: Certain investigations for research and applications. International Journal of Production Economics, 176, 98-110.
Winter, M., & Knemeyer, A. M. (2013). Exploring the integration of sustainability and supply chain management: Current state and opportunities for future inquiry. International Journal of Physical Distribution & Logistics Management, 43(1), 18-38.
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