HNHM320 Hospitality Supply Chain Management

TASK 1

P1. Demonstrate key supply chain concepts, principles and processes

Key concepts of SCM

Supply chain management (SCM) is a concept example of assignment which emphasises on management of all the networks which comprises of business processes and activities which are used for procurement of raw materials, manufacturing and distribution of finished goods. The main aim of this is to have effective flow of raw materials from the suppliers to the entity in order to concert them into final goods. For examples, Starbucks can contact the best suppliers of coffee in UK hospitality industry on the basis of the best prices offered to it. In this way, it can reduce the overall cost associated with logistics, distribution and logistics.

Principles of SCM

There are seven principles which are followed in SCM that help various parties such as distributors, retailers and manufacturers in carrying the activities of transferring goods from one location to another. These have been provided below:

Principle 1- The customers should be divided on the basis of their needs of services and the supply chain should be planned on that basis (Wisner, Tan, and Leong, 2014).

Principle 2- The logistics network should customised or changed which is capable of meeting the requirements and profitable for the company.

Principle 3- There should be continuous identification of demands of market so that plans can be made accordingly. Supply chain should be adjusted or changed so that resources can be allocated properly.

Principle 4- All the products should be differentiated according to the need in particular country.

Principle 5- There should be effective strategies for outsourcing which can cut down the cost of materials and services.

Principle 6- A supply chain wide technology should be designed covering wide range of factors such as flow of products, services etc. which can facilitate in decision making.

Principle 7- There should be both service as well as financial metrics which can increase the value and profitability. For example, Starbucks can use Activity bases costing system for this purpose.

For example with the help of these principles, Starbucks will be able to adopt suitable strategies such as market development and many more according to their suitability. This will prove to be helpful in the growth and development of the organisation. It is going to give positive results to the entity because of taking into consideration all the basic details such as customers' preferences, their comments etc. for improving the quality of geology topics the products (Copacino, 2019).

Processes

SCM process is the responsibility of the person having the department of the managing the supplies within the organisation. There are different processes which exist in SCM ad help the management to administer the raw material through strategies. These are as follows:

Planning- This is the beginning of the whole process which involves creation of long as well as short term plans. This may include estimation of customer demand, development of supply chain network etc.

Procurement- This emphasise on purchasing raw material, accessories etc. for making a whole new product which can be sold to the customers.

Production- This involves different processes through which the raw material is transformed into final goods. It is the responsibility of supply chain manager to take care of the materials being used in an optimal manner (Prajogo, Oke and Olhager, 2016).

Distribution- This stage is about moving the goods or services from the factory to the outlet where people can consume them by paying a price.

Customer interface- It is about assessing the satisfaction gained by the customers from the consumption of the products. Also, it can provide what more could be done to fulfil their demands.

For example, Starbucks can use these processes, it make plans which are to be implemented in the future so that costs can be controlled. With this, Starbucks can save a lot of unnecessary costs from timely procurement of raw material. In this way, it can use the resources optimally for creating competitive advantage and strong market position. Furthermore, supply chain manager can make changes in the current processes of making the final products so that demands of customers can be fulfilled without any mistakes. Also, the costs of logistics can be reduced so that more raw materials can be ordered according to requirement (Bai, and et. al. 2012).

M1. Integration of supply chain concepts, principles and processes for improving the efficiency

The concepts, principles and processes of supply chain management have been developed to help the management for effective flow of goods and services. If these are placed in an integrated form then supply chain manager can be at the benefit of formulating plans by covering all the possible aspects of the business. Furthermore, insights of the marketing and customers can be determined as well as new techniques which can develop the capabilities of suppliers can be made. The overall impact of using these three in a combined form can provide flexibility and increase the performance of outsourcing.

TASK 2

P2. Evaluate significance of effective SCM from the perspective of customers, suppliers, distributors and retailers

The supply chain management is a part of operational management which involve developing the designs and models by which effective supply of goods can be maintained. The main motive of supply chain management is to increase high level of satisfaction by improving the efficiency. The significance of SCM with the perspective of suppliers, customers, distributors and retailers have been discussed below:

Customers- It help in fulfilling the expectations of customers regarding proper quality and assortment of products (Fayezi, O'Loughlin and Zutshi, 2012). Furthermore, goods are delivered and made available at the right location which is approachable. Also, the shops can have necessary items which can increase the sales. In the context of Starbucks, with the helps of effective SCM, it can provide good after sales service in order to provide higher satisfaction to the customers. For example, if the stock of a particular type of coffee at Starbucks has finished, then with the use of good SCM, it can replenish quick enough to reduce the loss of sales and profits. Also, this helps in cutting the purchasing and other costs which ultimately make the products less expensive. Customers prefer the products which are of high quality but with low prices.

Suppliers- These are the parties who provide raw material for to the organisations which are transformed into finished goods which are sold to the customers. If an organisation has effective SCM, it can make order for the raw materials on repetitive basis. This is beneficial for the suppliers, as it can have a chance to earn profit and get itself associated with a large company like Starbucks. There are other suppliers in the market which can be chosen by Starbucks who offer favourable prices and this has huge contribution of SCM in this. In the context of Starbucks, suppliers can make strong brand position in the market so that other large firms can also contact them for providing raw materials (Ellram and Cooper, 2014).

Manufacturers- These are the parties who are involved in the activities of making the raw material into the final goods through processing from different processes. With the use of effective SCM, manufacturers can avoid delay in making the products by ordering the raw materials within the limited time. Apart from this, it helps in it decreases cost of production as well as assignment help shortage of materials can be avoided. The manager of supply chain management of Starbucks should design SCM in a manner which includes all the network that can meet the goals of customers. Also, blockage of stock at the warehouse can be prevented which reduce the storing costs. These costs can be utilised in something productive for making profit and meeting the goals of the entity. For example, manufacturers of Starbucks coffee can be made to produce quality product without any delay which can help it managing the additional costs that can be incurred in case of delay or bad quality.

Retailers- Effective SCM provide number of benefits to the retailers who are selling the products or services to the customers. Some of these are, the sellers can decrease inventory lugging costs. Furthermore, the lead time is reduced which make products or services easily available to the customers. It helps in effective distribution to the retailers. In addition to this, number of products can be sold at affordable prices by increasing the profit margin. It contributes to conserve operational and transportation costs in the retailing market. In the context of Starbucks, it can have long term and healthy relationship with the retailers through effective SCM.

M2. Critical evaluation the importance of physical, information and financial management

The physical activities involved in SCM are beneficial for the company to help timely production of goods by using the raw materials. There are different approaches and concepts which are applied in this for improving the quality of services. Information is useful in making decision connected to SCM. With the use of past data, it can compare the costs and make adjustments accordingly. Furthermore, SCM is also helpful in managing the financial resources because the costs can be cut and budget are prepared by estimating the data about all current needs and requirements.

TASK 3

P3. Explore cross-functional and integrated approach of SCM with other areas of hospitality organisation

Cross Functional Approaches to Supply Chain Management refers to those approaches in the organisation which are followed in order to make the working processes of the organisation to be effective and more good. For example, with the help of formulation of different teams it will be possible to make improvement in the management of supply chain management process of the company. There are different team members chosen from different departments so that it could not prove to be much difficult to complete the tasks which are provided to them in an effective manner (Christopher and Ryals, 2014). The formation of such teams is related to the achievement of some specific goals or objectives that could help in upliftment of the organisation as well. Teaming helps in leveraging organisational resources while utilising the expertise of their team members so they could perform in an effective manner for the improvement in the quality of their services, products, raw materials and many more. These implementation of these approaches are done in order to make reduction in the overall cost reduction, time reduction, cross boundary ownership of targets and problems, innovation with the help of which the achievement of goals and objectives of an organisation could be done in an effective manner. There are different purposes for which the establishment of Cross Functional Teams is done in the organisation as such general projects, commodity, product development, product development, process improvement, quality assurance, strategic alliance, supplier assessment and many more for the growth of organisation such as Starbucks.

In the implementation of this approach, it could be done that different individual from different department could be chosen as at the time of carrying out a particular project there are different tasks which are important to be completed by the team members so due to this reason and for effective completion of the project, the use of this kind of project is being done in the organisation such as Starbucks.

Integrated Approach to Supply Chain Management refers to the approaches with the help of which alignment is created among the different functional areas of the business or the business processes and also throughout the supply chain of the organisation so as to improve the effectiveness level of the performance of tasks of the organisation. As with the help of this mechanism, it will be possible for Starbucks to organise many plans for the business as with this approach will help the company to make coordination in between the different functions of the organisation in an effective manner as the supply chain management is itself a strategy that could help in the achievement of integration could be done. There are different types of decisions which are managed efficiently and effectively in the supply chain which have been strategically planned in the supply chain. There are four major decisions which are taken into consideration in the supply chain management of the organisation such as Starbucks which are location, transportation, inventory and production which are important for an organisation (Devika, Jafarian and Nourbakhsh, 2014).

Starbucks with the help of considering these four aspects will be able to make improvement in the overall processes of their business and this will also provide the company with competitive advantage over their competitors. This will also help in providing the company with better output as compared to the earlier perspectives. So with the help of application of both of these approaches in the working of Starbucks it will be possible to make improvement in the overall processes of the organisation resulting in improvement in productivity and profitability of the org

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