Global Supply Chain Management - Term Paper Example

? Global Supply Chain Management It is worth noting that supply chains are an essential element in the business organization of any society. This is because it often helps in bringing the final goods to the reach of the final consumer. The supply chain starts at the producer and culminates at the final consumer. This implies that every stage that characterizes the transfer of a commodity to the final consumer right from the producer is vital considering the long-term goal of bringing the commodity closer to the reach of the consumer. As such, in the absence of supply chains, the business world would be rendered inefficient. It is therefore, of importance that all parties, that are inclusive in the supply chain, play their role to the best of their ability in ensuring that the consumer says safe. This ensures that all products that run across supply chains bypass safety and security measures instituted by the members of the supply chain (Nuttall 2013, p. 221). However, like it is in most cases, it is never done to the expectations of society. As such, the final product that reaches the final consumers is, more often than not, in a deplorable state in terms of safety with regard to human consumption. This is best exemplified by the case of horsemeat being passed off as healthy meat ready for human consumption. Such cases call for the restructuring of the pre-existing programs for safety assurance to be revised. The dire nature of the situation makes it an ivy issue to deal with. As such, this paper seeks to explicate on the problems charactering the current supply chain system, to provide solutions to these problems as well as investigate on how supermarkets should prepare on the breakdown of the supply chains. It is undisputed that the horsemeat scandal has had adverse effects on the economy of the United Kingdom. One of these effects is the ruining of the reputations of otherwise stand-up companies and corporations. Most of these firms have been on record for having worked hard in order to realize the levels of success that characterizes their business models. Given the much effort invested by such companies, it might not be order for all of this to occur due to causes such as the inadequacy of the supply chain. The economic impact of this horse meat scandal has also resulted following a reduction in sales. It is probable that after such a scandal in a food commodity industry, the levels of sales are reduced. In certain cases, the level of drop can be catastrophic. Therefore, meat supply chain has its associated challenges worth analyzing and doing so would help outline past mistakes for correction purposes. This will fashion an enabling environment for the complete overhaul of the current policies governing this supply system. A number of well-known brands dealing with meat products have been adversely affected by this horse eat scandal. This is done with the hope that the consumer patterns of shopping have not been altered to the detriment of this industry. It is highly probable that consumers have already decided on purchasing less of processed meat, less of meals with ready meat and a significant number are contemplating the option of indulging vegetarian products. It can be argued that the scandal has provided vital lessons to the government, retailers and most of the entire food standard agency (De Haan, Groot, Loo and Ypenburg 2003, p. 82). The chain of responsibility is however long, and each party must be ready to accept liability accruing from the scandal. It is not surprising that the overall majority of customers cite the government as to blame. It is imperative to note that food fraud has been in existence since time immemorial. Human kind has been adulterated foodstuffs to suit their own selfish ambitions to the detriment of the health of the unsuspecting public. Laws instituted to curb against this vice have not deterred these crimes. A cause of the continuing food frauds might be attributed to the ongoing economic slump. The rise of the process of food commodities is putting undue pressure on the suppliers. As a result, the unscrupulous suppliers are resorting to cheap ingredients. This is one of the rationales explaining the rise in cases of food fraud. The current adopted policies on ensuring safety standards undertaken by manufacturers and retailers are somewhat inefficient. These policies are best exemplified by the auditing of the suppliers. This is done with the basic rationale of the minimum safety standards, which they hold, observe. However, recent failings of this system have proven that time has rendered it inefficient. As such, this is one avenue, via which the supply chain has failed (Ciliberti, Haan, Groot and Pontrandolfo 2011, p. 887). This then ushers in the point of audit fraud. It is not that these systems are inefficient as a whole. Rather, the contemporary issues facing the meat supply chain can only be effectively curbed by postmodern systems. There are not enough systems to curb against unethical supply chain tendencies. The root of the problem might also be sourced from biased incentives by powerful brands. These powerful brands employ their advantageous market positioning strategy to negotiate for increasingly lower prices. These low prices at times do not meet the basic operational costs for the suppliers. As such, the suppliers are compelled to employ unethical business practices with the endeavour of staying in business. The suppliers have tended to act in complete oblivion of their ethical and sustainability obligations. It is high time that the suppliers understand the importance of conducting business ethically. It is only when these suppliers understand the value of acting responsibility and avoiding the minimum standards, will the attitudes harboured in the supply chain change for the better (Parmigiani, Klassen and Russo 2011, p. 218). It is only in such a situation will they realize maximum gains that continually eluded their businesses. The true impact of this horse-meat scandal has been devastating, to say the least. His impulsive reaction of the consumers has been to alter their dietary behaviour. A recent report cited reputation as being one third of the overall company value. Such a reputation for dealing in substandard foodstuffs is bond to have a lasting impact on the meat industry. It is important to reiterate the effect of this scandal on the meat industry prior to the provision of options to curb against future occasions of similar context and extent. Given the susceptibility of the supply chain to fraudsters, it is imperative to restructure the meat Supply Chain systems. The first department that should employ new polices has to be the procurement department (Nuttall 2013, p. 224). This department must invest in mechanisms that enable a thorough analysis of the supply chain. With this endeavour, loopholes within the chain will be easily identifiable and subsequently handled. An additional measure that should be undertaken is the revision of the relationship between the company and the key suppliers. As such, the company should strategies on how to best straighten this vital and essential relationship with key suppliers. This is based on the rationale that when this relationship is severed, the quality of products sourced from a particular supplier might be suspect. With the endeavour of reducing such a catastrophic eventuality, a strong relationship with key suppliers is advisable. All these proposed systems are intended to guarantee that the business does not handle unhealthy meat. These systems rely on the good will and ethical standards observed by the suppliers. However, in many situations these systems might fail. As such, it becomes vital to invest in monitoring systems. These have the power of providing an avenue to get early warning of prospective problems in the meat supply chain (Parmigiani, Klassen and Russo 2011, p. 220). Prior to embarking on strengthening of supplier relationships, it is imperative to first analyze their susceptibility to unethical business temptations. This calls for a non-direct auditing of the key suppliers. Aside from identifying the most important suppliers of the business, it is also advisable to identify suppliers that are most prone to economic downturn. With these two groups of suppliers, supermarkets can then be able to investigate in hidden susceptibilities that shed light into the culture of the supplier. If the character of the supplier is somewhat questionable, then is advisable to desist from conducting any further business transactions with the said supplier. It is only via such hard line stances, will the business, in this case the supermarket, be well assured of minimal susceptibility towards food fraud. The most commonly adopted approach employed by retailers in investigating their supplier has been somewhat unfocused towards the more important signs. Retailers mostly investigate the financial risk of their suppliers. This is, however, not sufficient in curtailing the occurrence of food safety scandals. This method gives a thorough account of the past operational dealings of the supplier. However, it does not give any inclinations of future actions, which is the objective of the investigation (Law, Helo, Kanchana and Phusavat, 2009). As such, the important factors that should be analyzed in this endeavor are that of product safety and quality. In addition, the retailer ought to monitor the policies employed by the supplier in monitoring their own suppliers. The existence of inter-supplier auditing is essential against curbing of commodity fraud. In the event where such inter-supplier auditing is ineffective or at worst non-existent, it is best to advise the supplier to institute measures gearing towards the realization of his measure. When the supermarkets advises on the appropriate and robust measures that can be adopted by their suppliers in ensuring that their suppliers act ethically reduces the level of risk, which the supermarket is prone. In addition to this, the endeavor will aid significantly in strengthening the relationship between the supermarket and their supplier. In light of the endeavor of continually monitoring the business operations and conducts of the vital supplier, it would be best suited to develop a list of signals that will indicate that the supplier tending towards risky business practice. These should refer to as the distress signals. The main action of these distress signals will be to give advance warning of the deviation from the ethical business practice that is characterizing a particular supplier. This goes a long way towards realizing the goal of preparedness in the risky business world. In addition, this will enable the supermarket to fashion an exit strategy in the occurrence of the worst-case circumstances. As such, it is imperative for the supermarket to be able to detect early warning problems. The creation of this list of distress signals necessities they need to embrace research on the failings of other suppliers. When the circumstances of these failed suppliers are understood then it should be crosschecked with the current circumstances of the vital supplies. It is only when the supplier exhibits some resemblance to those of ailed supplier will the supermarket have to intercede. However, the approach to be employed in also guided. This is based on the rationale that a negative approach will sever the relationship between the supplier and the supermarket to eh extent of being irreconcilable regardless of the upturn of the supplier. The best approach should be a stepwise series. This entails approaching the supplier in subsequent series depending on their own approach in dealing with the issue. When the supermarket notices the similarity in the cross checked factors, it should approach the supplier and inform them on the behavior. This should be followed up by proposal on the best solution to these disturbing business tendencies. His should be done when only a few factors are corresponding to those characterizing failed suppliers. The stress point in this case should be the number few. This is given that at this stage the situation is regarded as wholesomely manageable. In the event of inaction of at times inefficient action, it should be regarded as an additional distress signal. As such, the exit strategy should steadily be fashioned to guard against unnecessary risk or loss of valuable business time. This exit strategy should entail checking up on the services of the competitors. This will guarantee that when the supplier gives more distress signals, the business will experience a smooth change of relationship with new suppliers. In this case, this new supplier should already have been investigated via the systems that had previously been instituted. . The meat supply chain has been negatively affected by the actions of unscrupulous suppliers. The selfish endeavor of the suppliers in gaining an economic edge is to the detriment of the future business operations of the retailer. This is given the fact that in such circumstances, the business is often the most impacted by the food scandal. These unethical actions by the suppliers are sourced from the biased use of market positioning by the largest brands. This is in the essence that the brands significantly reduce the prices of the commodities. As such, this is to the detriment of the profit margin owed to the supplier. In the end, the supplier results to cheaper foodstuffs with the endeavour of maintaining the vitality of their business operations. As such, what starts out as an endeavour to aid the final consumer via reduced prices ends up as a detrimental feature to the final consumer in terms of poor quality food commodity? This is no way gives justification for this unethical business practice. Rather, it aims at sourcing the root of this evil. It is only by curtailing the forces compelling this behavior will the desired results be realized. When this is coupled with the auditing systems that supermarkets should institute, the future probability of occurrence of such a scandal is greatly reduced. References Ciliberti, F., De Haan, J., De Groot, G., & Pontrandolfo, P. 2011. CSR codes and the principal-agent problem in supply chains: four case studies. Journal of Cleaner Production. 19, 885-894. De Haan, J., De Groot, G., Loo, E., & Ypenburg, M. 2003. Flows of goods or supply chains; lessons from the natural rubber industry in Kerala, India. International Journal of Production economics. 81-82, 185-194. Law, K. M., Helo, P., Kanchana, R., & Phusavat, K. 2009. Managing supply chains: lessons learned and future challenges. Industrial Management & Data Systems. 109, 1137-1152. Nuttall, S. 2013. Supply chain management: some lessons learned the hard way. Journal of business continuity & emergency planning, 222-227. Parmigiani, A., Klassen, R., & Russo, M. 2011. Efficiency meets accountability: Performance implications of supply chain configuration, control, and capabilities. Journal of Operations Management. 29, 212-223. Read More