The ultimate objectives of supply chain management are to realize maximum customer value and also have a sustainable competitive advantage. It calls for a conscious effort by the supply chain firms to come up and run the processes efficiently and effectively possible (Hugos, 2018). The supply chain activities encompass all aspects of production from sourcing the raw materials to customers feedback plus the information systems involved. Again, it is essential to note that the physical and information flow intertwines supply chain management. The physical entails all the processes of production and transportation of products to the clients. At the same time, the information flows are the directives from the producers, the consumers and within the business (Hugos, 2018).
The Information Revolution
Information is power, and since the business began, there is a strong interlink between information from all business environments, which are internal and external. In the time when the computers were being invented, the mainframe computer could consume a substantial amount of space, power and memory. In the current generation, less than a century ago, a significantly smaller laptop can do more than what a mainframe computer could have done in that era. With the growth of communication channels, information can traverse globally within no time (Mangan, and Lalwani, 2016). An example of how technology has impacted the business industry can be seen on Walmart ability to disburse daily sales data to its suppliers despite their distance and geographical locations (Shen, and Li, 2019, p382).
Increased Competition and Globalization
There have been increased competition in the globe and businesses are doing all they can to ensure they remain in the top despite the various challenges. There have been notable changes within the market, in production and with the increased advances in technology (Mangan, and Lalwani, 2016). These fast changes call for a diverse leader who will not hesitate in making decisions in a limited time frame and the subjects to take action as soon as possible. The fact that the choices are to be made within a limited timeframe, there are limitations. They include; less information, and due to less time, the decision-maker can quickly put the business to drain, and thus it becomes a high-risk initiative of making a decision (Shen, and Li, 2019, p382). Other limitations that pile pressure on the business include; customers not conversant with the plans to be implemented and are only concerned with the delivery of the products. The businesses are well aware that competitors will offer substitute products, and that could lead to loyalty problems. Product lifecycles have in the recent past shrunk from their shelve span of years to months. A management profession would easily relate the products on markets with the fashion industry where products come in different tastes and as per seasons.
Despite the constant challenges in competition, some industries and businesses seem immune to the problems. The secret is that the companies have embraced the versatility of markets today and are inclined to renewing and advancing their operations more so in supply management (Schiavone, and Sprenger, 2017). An example of a business that has embraced the change is that of Johnson controls who can receive orders from ford on seats and deliver them within four hours. This calls for extensive flexibility in operations within the manufacturing plant plus the reliability of the information and the information systems between the supply chain partners (Meredith, and Shafer, 2019).
For survival, several firms have invested heftily on market shares globally and remain on their foundation for rapid global economic expansion (Mangan, and Lalwani, 2016). Unfortunately, the firms need to inexcusably protect their shares domestically from a host of world-class worldwide players. To counter the challenges, the managers aim at soliciting ways to grow globally. The managers have to put inventories where customers do not lack their demands despite their geographical location and in the right measures and prices (Mangan, and Lalwani, 2016). The move is a challenge to the business but can only be achievable when all the suppliers are at the same wavelength.
It has been established that the majority of firms struggle to get and know the kind of supply chain they compete. It is often essential to understand the physical and information flow that play a significant role in making up the supply chains. From the maps, firms are now in a position to know and evaluate how they impact the business and the kind of information needed to ensure the supply chain is functioning efficiently and effectively. Just for a profound understanding of the supply chain Zara Fashions and Schoeller Industries both dealing with fashion will enlighten more on supply chain management (Xuejie, Chang, and GuangHao, 2019).
The overall design of supply chain management
Zara fashions supply management could be facing the challenge but again flourish in the industry because the company sales are the ultimate goals. Zara products have to meet the high-end requirements of the customers. Just as the saying by a famous author goes, fashion is not an advancement of the item but rather the redesigning design components of the existed issues on their influences and modifying them into new products (Xuejie, Chang, and GuangHao, 2019). The objective is to ensure the design is translated as per the taste. The strength that is showcased by Zara is on its fabric. The raw materials (structure) are considered an essential commodity. They are needed to be nearby as soon or even before the start of the season. The products come in one shade that is uncolored to give room for shading them depending on the client’s taste or market demands. The Zara fashion industry has majored in several areas and made them her strength (Xuejie, Chang, and GuangHao, 2019). Quick response to an order is one of the strategies employed by establishing a pill model in their inventory and supply chain management. There is a wide range of products amounting to more than 1000 brands depending on the demand, store sales and the current trends. They monitor how the customers spend more, especially in their stores, to understand the type of designs being consumed and then respond to the demand according to the necessity and chances of making sales.
Small batch productions; unlike many businesses, the company has addressed the needs from large- and small-scale customers, and thus they package their products in a pocket-friendly manner where even the small traders can afford. The fact that the business accommodates small traders makes it even easier to understand the basic designs that sell in a particular place and the various social classes. The low products again make it possible for the business to try out new things in the market without making huge loses. Someone can perceive that the production could translate to losses because of the various products, but the use of a single material to create different designs makes the loss reduced.
Central distribution centers; Zara have invested heftily on IT systems that support its distribution frameworks. In a case where the fault is found in a bulk of clothes, the tracking system is efficient enough to trace the movement of the products (Xuejie, Chang, and GuangHao, 2019). Subsequently, green supply chain management becomes the ideal management plan for Schoeller industries. The company sets its objectives to maintaining or making it even better by recycling available waste products (Wood, 2019, p.16). The company aims at recovering the available products to ensure they leave the environment a better place and also obtain some benefits from the products. Unfortunately, people understand the impacts and implications that the society suffers especially when products are disposed and left unattended. The brighter side is that they create an opportunity for other people, one of them being Schoeller industries. For this instance, Schoeller industries capitalize on green supply chain management for the organization of the products (Wood, 2019, p.16).
Zara decision-making processes are made from the top tier management, and the commands trickle down to the least of the workers in the industry. But again, to make the decisions, there have to be triggers and the sources of the information. Zara has designed a relationship with the small-scale industries. In the market, the small enterprises interact with the clients on a one on one basis, a feature that makes it easier to gather information for the ideal decisions (Xuejie, Chang, and GuangHao, 2019). Technology has, on the other hand, played a significant role since there are interactive panels where the clients can share their views with the support team where the necessary actions can take place.
The Schoeller industries could be assumed that the source information just by the nature of the business (Wood, 2019, p.16). For instance, the logistics firms interact with clients on a one on one basis, and thus, they gather information regarding the quality of the products without much ado (Christopher, 2016). The decision-making processes are majorly from the top management. Still, again they have to communicate the data from their standpoint and design the ideal means to ensure the staff find it easy in implementation of the ideas within the business. Technology has set precedence in all activities, and the Schoeller company has not been left behind (Shen, and Li, 2019, p382). Gathering of information regarding green logistics have worked to the benefit of the company and hence designing even better products (Christopher, 2016).
Any business will first establish the consumables within the market, whether it is in terms of service or production. The company now weighs the options of either incurring cost on purchase or leasing. Procurement in Zara ensures there is an interaction in every unit of production or service (Aftab, et al., 2018, p.212). The units of production and services include designing, outlining and assembling, just in line with the essentials of the business. The significant feature is real exchange. Many markets within the globe will offer different materials on different costs and thus calling for the buyers to gather enough information regarding price and quality (Aftab, et al., 2018, p.212). When soliciting information, the clients engage more with the business hence creating a cohesive relation. A commendable sample in Zara outlines that they serve smaller amounts to clients and with multiple products, thus upgrading the standpoints of the outlets consistently, which in return eliminates advancements and limitations.
The objectives of Schoeller industries is attaining the best in its returns and remaining in line with the company’s vision and mission (Wood, 2019, p.16). The driving force emanates from the urge to have a sustainable environment. The operations achieved by environmentally sources of energy is a milestone realized by the business and driven by supply chain management (Meredith, and Shafer, 2019). To cut on cost, the company uses the available resources more so the natural ones and recycling the available wastes. The recycling of other products such as crates and plastics creates another form of procurement. Unlike Zara company, Schoeller industries aim at cutting down the costs of production by using the unpretentious mode of production, which ranges from the use of renewable sources of energy and recycling of the waste products.
Production strategy and operations
Zara supplies chain operations have adopted three policies in production which include the augmented asset utilized, lead times and minimize stock (Meredith, and Shafer, 2019). The three plans have a direct impact on evaluation, client satisfaction and other business qualities such as the returns, turnovers, deals and many others (Aftab, et al., 2018, p.212). Some scholars suggest that coming up with new products should be shallowed as it is expected more so depending on the circumstance and focus more on advancing the available products a feature that is more expected in the assembling point (Truong, 2016). By so doing, as the requests increase, stock can be increased equally. There are also contentions that with the incrementation of Zara stores, lead times cannot remain the same and hence have to be increased as well (Aftab, et al., 2018, p.212).
Schoeller, on the other hand, performs its production operations on the green supply chain (Schiavone, and Sprenger, 2017). The negative aspect of it is that the business puts into account the conservation of the environment. The green supply chain happens even after production operations and making sales (Meredith, and Shafer, 2019). From the full range of products that the company disburses, they are all made from environmentally friendly raw materials. The company deals with food, cosmetics, beverages, among other products. Besides the unit of products produced, there is the aspect of crates, polythene bags that are aimed at easing collection after disposal and thus reduce degradation by recycling (Truong, 2016). The company is interested in making products that are modern and mostly friendly to the environment and also meet customer’s needs. The clients are impressed by the company and very supportive, having in mind they are interested in environmental health as well as society.
In summary, various business operations take place before the products reach their consumers from production. The protocol of the services here is intertwined and depend on the individuals, data, facilities, business infrastructure, assets put in place and the readiness of the unit product. The network of production infrastructure is supposed to change the available asset to be of more value hence being likeable in the market. Now it becomes the duty of the organization to decide on the best supply method and strategy that is aligned to the business objectives and goals. Regarding the businesses discussed above, it is clear that Zara chose to pursue an approach that is environmental ignorant and hence profit and returns oriented. Schoeller industries, on the contrary, have employed environment conservancy framework, also known as green supply chain.
Aftab, M.A., Yuanjian, Q., Kabir, N. and Barua, Z., 2018. Super responsive supply chain: The case of Spanish fast fashion retailer Inditex-Zara. International Journal of Business and Management, 13(5), p.212.
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