MBA Srategic Supply Chain Management Flow

INTRODUCTION

Supply chain management is the management related to flow of goods as well as services and it involve procedure which convert raw material within final products. In simple terms, supply chain management is broad range of activities which needed within organisation for planning, controlling and execution flow from materials to production till distribution within most economical manner (Chen, Preston and Swink, 2015). Supply chain management operates at three levels mainly i.e., strategic, tactical and operational. Moreover, at strategic level management of business firm makes high level strategic supply chain decisions which are related with entire company.

This report is based on ALDI which is an common brans of two German family owned discount supermarket chains. It have more than 10,000 stores within 20 countries as well as estimated combined turnover approx. €50 billion. ALDI is part of retail industry which was founded in 1913 by Karl and Theo Albrecht. Products offering by them are Grocery and household essentials. Respective assessment will going to give overview of organisation and its supply chain. Along with this, critically analyse supply chain complexity, risk management and sustainability. Furthermore, recommendation will be provided for improving performance of supply chain and its future in company will also discuss.

MAIN BODY

Overview of organisation and its supply chain

ALDI is part of retail industry which have more than 10,000 stores within 20 countries and its estimated combined turnover is approx. €50 billion. In, 1913 ALDI was founded by Karl and Theo Albrecht. Business has been divided within two groups in 1960, which later on become Aldi Nord, headquartered in Essen as well as Aldi Sud Headquartered in Mulheim. Aldi's Grman operations consist Ald's Nord's 35 individual regional organisation which have approx. 2500 stores in western, northern and eastern Germany whereas, Aldi Sud's have 32 regional companies with 1600 stores in western as well as Southern Germany.

At international level Aldi Nord conduct their operations in Denmark, France, Benelux countries, Poland, Spain, Portugal and so on. On the other hand, Aldi Sud conducting their operations in Ireland, Hungary, Great Britain, Australia, China, Italy, Slovenia ad Switzerland. Thus, Both Aldi Nord as well as Aldi Sud are operating in united States with approx. 1600 stores in 2017. Explanation of Ald's mission, vision and core values are mention below :-

• Mission - Aldi emphasizes the intention of company to always distinguish it from other companies of same sector by enhancing their approaches and setting high standards in sector. This statement include some components such as improving quality and expanding its market position.
• Vision - Aldi's vision statement is to enable Australian shoppers to live richer lives for less.
• Core Values - Aldi's core values comprise responsibility, reliability and simplicity.

Supply Chain Management - It is the procedure as well as activity in which raw material and components will source that an organisation need for production of products or services and their delivery to customers. Their is an software of supply chain management whose goal is to improve performance of supply chain (Fahimnia, Sarkis and Davarzani, 2015). This software provide timely and accurate information which allow business firm to produce and ship only that much products which can be sold. Moreover, effectual supply chain system provide assistance to both manufacturers and retailers in reducing excess inventory. With the assistance of SCM several cost get decreases such as producing, shipping, storing product which will not sold and insuring. Apart from this, there are main 6 components of Supply chain management i.e., planning, sourcing, making, Geology Topics delivering, returning and enabling.  

 In context of Asda, the company have been very concerned about the manner in which raw materials are being procured from different suppliers. The suppliers working with this mega retailers have always been treated very fairly and at the same time ensures that sourcing is done sustainability. This approach of sustainable procurements assists this organisation in making sure that there is a minimal negative impact on social and economic grounds. The application of the practices is ensured through the supply chain process and which leads to positive reputation in the market (Genovese and et. al., 2017). In addition to this, Aldi involves human rights in their supply chain which simply shows their responsibility towards protecting Human Rights. As sourcing best products at best price is heart of what company is doing as well as their passion for quality drivers part of business. Thus, low operating cost and unique relationship Aldi have with their suppliers that was build by providing top quality products ans price which no other organisation can match. For Aldi relation with suppliers is everything what they well do. Furthermore, it is important for respective retail company to ensure safe and fair working conditions, being committed to human rights as well as fair labour practices, they have to ensure that suppliers will treated equally and products have to be sustainability sourced for reducing environmental and social impact of their offerings.  

Critical analysis and evaluation of supply chain complexity, risk management and sustainability

Supply chain complexity - It is caused through several factors which result in rising expectations of customers for faster lead times, expanded products as well as services and tailored experience (Jabbour and de Sousa, 2016). All these factors force owner of company to provide assistance more unique orders for customers who are surrounded their supply chain, needed great collaboration with partners, enhance inventory management with suppliers as well as proper control and deeper visibility within every supply chain steps. In other words, Supply chain complexity includes activities related to identifying, analysing, measuring as well as controlling complexity. There are several factors do to which supply chain management of company get more complex  and Aldi have to take care of it. Explanation of these are as follows :-

• Growth in supplier/ Partner relationship - For an organisation relationship with suppliers and partners is important for expanding their footprint with present customers and reaching new ones. Managing these relation in essential for making customers satisfy and it is not good then result in complexity.
• More milestones to manage - When an organisation expand its product line and customer bases it result in enhancing their supply (Kshetri, 2018). In simple term it can be said that, more steps will required for completion of orders because demands will also get increase. Some increased customer base may result in creating complexity within supply chain of Aldi. 
• Data availability - If availability of data is not proper for company across supply chain to use these for more informed decisions. Such things result in making supply chain complex and have impact on real-time decision about customers related to company supply chain (Mangan and Lalwani, 2016). Moreover, gaps in data tends result in adding more complexity for business and requirement for better supply chain visibility.

For Aldi complexity in their supply chain is will be continue to be important mainly in expectations of customers and aspiration for rising growth of business. Thus, solution is not to make supply chain less complex but they have to figure out how to embrace complexity. For an organisation it is important to have proper supply chain management because with this they can serve customers in effective manner and make them satisfy.

            Supply chain risk management - It is related to implementation of strategy for managing both everyday as well as exceptional risks including supply chain which is based on continuous risk assessment. Objectives of this is to reducing vulnerability and ensuring continuity (Meixell and Luoma, 2015). In simple term, SCRM is risk management process tool which help in dealing with risks and uncertainties which cause within supply chain. There are both internal and external risks which can interrupt supply chain of Aldi explanation of these are as follows :-

            External supply chain risks - These factors also have negative impact on supply chain of Aldi and external factors are not easy to predict as well as need several resources to overcome with it. Some largest external supply chain risk from which respective retail company have to aware as mention below :-

• Demand Risk - When Aldi have demand of miscalculate product it generally result in lack of insight within year over year buying trends or unpredictable demand.
• Supply risk - when raw material on which company rely will not deliver on time result in causing disruption to the flow of material, products or any other parts.
• Environmental risk - It include several factors such as socio-economic, political, environmental disasters which have impact on supply chain related aspects of company (Meredith and Shafer, 2019).
• Business risk - When in activities of business anything get change it is important for them to keep their supply chain running smoothly such as buying and selling.

            Internal supply chain risk - There are several internal supply chain risk which occur in the operations and control of company. Internal risk are control and can tracked as well as identified by using robust data analytical programs. There are several internal supply chain risks explanation of these are as follows :-

• Manufacturing risk - when any type of components within work of Aldi is disrupted or result in causing fall off schedule.
• Business risk - It occurs after changes in standard personnel, management and reporting business procedures.
• Planning and control risk - This type of supply chain risk caused due to several reasons such as inappropriate assessment, forecasting as well as planning of product and management.
• Mitigation and contingency risk - This type of risk occurs when an organisation don't have contingency plan in relation of their supply chain disruption (Monczka and et. al., 2015). Thus, it is important for Aldi to prepare backup plans

Apart from these type of risk, there is approaches also which Aldi can implement in their working for supply chain risk management. Explanation are as follows :-

            PPRR management Model - It stands for prevention, preparedness, response and recovery (Wang and et. al., 2015). PPRR is most common risk management strategy which organisations are implementing now a days.

• Prevention - Implementation of safeguard in working for preventing any supply chain disruption.
• Preparedness - Prepare contingency plan which can be implement in case of emergency.
• Response - Execution of contingency plan as well as total efforts for minimising effects of disruption.
• Recovery - For recovery purpose company will go back on track and running at normal as quickly possible.

            Supply chain sustainability - SCS is holistic view of supply chain procedure, logistic and technologies which will address social. Environment, legal as well as economic aspects related to supply chain components. Factors which will have impact on supply chain sustainability involves amount of wastage, air pollution, emissions and carbon footprints, labour violations as well as health and safety of employees (Rostamzadeh and et. al., 2015). Thus, it is important for Aldi to ensure that their supply chain will not have negative impact on environment and the surroundings within that company is working.

Recommendation for improving supply chain performance

It is important for an organisation to manage is supply chain in proper manner because it help them in serving their final produced goods to customers in effective manner. As Aldi is retail store dealing in several grocery and household products (Wang and et. al., 2016). So for them it is essential to have proper supply chain management as it will help them in approaching customers in effective way and fulfilling their needs and wants. Supply chain management is referred to a process which focuses on procurement and delivery of the products to the end consumers as per their requirement. The major activities which are included in supply chain management are procurement, sourcing raw materials, manufacturing, shipping, managing returns and most importantly improving the efficiently of supply chain process so as to improve profitability (Saberi and et. al., 2019). For Aldi there is some recommendation which help them in improving their supply chain in appropriate manner. Explanation of these are as follows :-

• Aldi can improve their supply chain management by implementing automatic purchasing  because Do my homework continuous monitoring level of inventory required much time. Thus, to make things easy ERP system with supply chain function automatically and place order with vendor when level of inventory get drop. By implementing this, employees of company also get free and focus on other important activities.
• Aldi have to improve their distribution network because it have wide impact on everything from tracking delivery to sales strategy. Thus, respective company have to enhance their distribution network which is possible with the assistance of holistic approach as well as cluster view (Saenz and et. al., 2015). Thus, in holistic approach manager of Aldi will review important part of entire distribution network as well as they have to find out which part work in sync. On the other hand, in holistic approach cluster view group graphs, charts and other details together which help in keeping eyes of supply chain management practices.
• Cash flow is an fundamental tool which several business utilise fore improving suppliers management. It is essential for Aldi to track payment terms as well as condition with several groups in supply chain. Through proper cash flow payment technology also get improve which help in managing activities related to supply chain in effective manner such as paying vendor bills, shipment tracking software and so on. Along with this, ERP system work in more effective manner with both just-in-time manufacturing as well as JIT inventory management for reducing cost as well as enhancing inventory turn around (Silvestre, 2015). By implementation of this, their will be less chances of mistakes in order fulfilment.

            With the assistance of above mention recommendation Aldi can improve their supply chain management in effective manner. Along with this, they will be able to conduct their operations in more appropriate manner and conduct operations.         

Supply chain of the future

Supply chain is network within organisation as well as its suppliers for producing and distribution specific product to final buyer. There are different activities which included in this network such as people, entities, information, resources and many more. In addition to this, it also present steps which are taken for getting products or services by its original state to customers (Schoenherr and SpeierPero, 2015). Motive of an business behind developing supply chain is to decrease their costs as well as to remain competitive within business environment. Supply chain have its future at wide level which will provide assistance to Aldi in conducting their Plagiarism checker free  in effective manner. Explanation of these are as follows :-

• Supply chain digitalisation - it is the procedure of utilising latest tech solution along with other digital as well as physical assets for redesigning logistics practices. Supply chain digitalisation help in conducting operation more fast and it is highly competitive. In addition to this, digitalisation enhance speed, dynamic and resiliency of supply chain operations which help in gaining customers responsiveness and ultimately high revenue. Through implementation of digitalisation it become easy for company to automatically maintain their supply chain which result in making employees free so they get engaged in other activities.
• Artificial intelligence - Advancement in artificial intelligence solution have several applications within supply chain, especially the warehousing segment. In this gesture recognition solution will be uses instead of  keyboards as well as mice in the procurement procedure. Apart from this, concept related to automation as well as robotics widely applied within supply chain for conducting operations in more effective manner.

CONCLUSION

After going through above discussion it has been summarised that, Supply chain management is important part of an organisation. Because supply chain management is the management related to flow of goods as well as services and it involve procedure which convert raw material within final products. In simple terms it can be said that, with the assistance of proper supply chain management it become easy for company to serve their customers in effective manner. Along with this, while working on SCM there are several areas which business firm have to critically evaluate as these are supply chain complexity, risk management and sustainability. Apart from this, for an organisation it is important to implement automatic inventory management practices in their working. Because employees should not have to focus on other activities and they can put efforts on other important work.

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