Supply Chain Management - Case Study Example

? Supply Chain Management: Process Integration Case Study SUPPLY CHAIN MANAGEMENT: PROCESS INTEGRATION CASE STUDY In today’s highly competitive business environment, businesses require to reinvent their strategies on an almost continuous basis. International deregulation in most industries has led to the opening of markets to entry by new competitors. A developing global culture and corporate expansion have led to business practice standardization, as well as reliance on cooperation among business partners, suppliers, and customers (McAdam & McCormack, 2001). The question then becomes how organizations can respond better, more efficiently, and attain supply chain coordination. In addition, the organization should also aim to extend quality processed based management benefits to every part of the supply chain. Practitioners and researchers have for a while viewed the supply chain holistically and promoted sharing of information, cooperation, partnerships with suppliers, customer focus, and business process management. Research and practice integration in business process management and customer supply chain, however, has not been evident (McAdam & McCormack, 2001). Business leaders will need to have a holistic approach to the entire supply chain, taking it as a single entity. 1. How well is McAdam and McCormack's proposition borne out by the evidence from the various companies they surveyed, and in particular from Nortel Networks? Organization is the manner in which humans make sense of the reality in their environment, by being aware that they can do more as a unit than they could if they stood alone. Organizations, just like humans, however, are not static and are under a constant state of change and evolution. The equilibrium between functionality and form is perpetually changing, and the organization needs to find a way to stay relevant and maintain their competitive advantage. This leads to constant changes in the organization’s structure, as well as a strategy, in order to adapt to environmental changes (McAdam & McCormack, 2001). In business process restructuring, different companies have had to alter their processes and structure at different times within their firms so as to be more environmentally responsive and so as to be more competitive in their offering of products and services (McAdam & McCormack, 2001). Once there is restructuring of a real work process, the organizational structure’s shape that is needed to carry out the functions will be more apparent. The metamorphosis that organizations go through in response to the competitive landscape changes are best epitomized by Nortel Networks. The company needed to rationalize global manufacturing operations from 23 to 7 manufacturing sites worldwide. Their focus was altered from a product centric approach to one that was focused on supply chain and process integration for the customer’s sake. There was higher quality expectations demanded from the workers with significant alterations to the nature and arrangement of work as employees were encouraged to be involved in teams for cross functional improvement and different roles (McAdam & McCormack, 2001). These changes all attributed to radical alterations and changes in Nortel networks’ organizational structure and framework. Organizations also change their global strategies to respond to increased competition that makes them think in an integrated manner concerning every aspect of competition, markets, sites, production, and suppliers. Organizations, therefore, will adopt other strategies because of environmental changes that will result in processes being done in different ways, which, in turn, leads to a different and new organization. 2. To what extent does the evidence assembled by Cagliano, Caniato, and Spina suggest that, to be successful, external integration strategies need to be supported by internal integration within the firm? A dominant topic in the study of the supply chain has been chain integration, although it is clear that organizations do not always succeed in attaining improved integration (Cagliano et al, 2006). One reason for the failure of external integration is because of poor internal integration in the organization. Interdependence of external and internal integration, dependence of integration externally from internal integration, or vice versa needs basic knowledge since internal integration’s importance for a successful company can be depicted in this manner. Three theoretical approaches deal with internal and external integration from which a fourth model can be deduced. First model has to do with how internal and external integration affects the success of a company individually; the second model is a product of the first, whereas the third model is representative of the integrated approach. Contrary to internal and external integration’s individual influence and, therefore, the causal chain model, integration internally and externally is not established laterally but is representative of independent influences on the integration as a whole (Cagliano et al, 2006). Based on the three models, it is possible to come up with an interactive model, which is also descriptive of internal and external integration’s independent interaction and the influence it has on the organization’s success. When the internal integration level is high, external integration’s influence on the organization’s success is higher, particularly from a logistics point of view (Topolsek et al, 2006). On the contrary, the lower the internal integration level, the lower the external integration level, it leads to reduced competitiveness or success for the organization. External integration portends a positive effect on the organization’s success as long as the internal integration level is high enough. An organization’s success is influenced directly by integration internally, as well as external and internal integration interaction. External integration is indirectly influenced by internal integration and as long as single supply chain members are not integrated internally, there will be problems integrating in an external integration system (Topolsek et al, 2006). Therefore, organizations must first integrate internally followed by integrative rules of the entire chain of supply that contribute to the individual companies. It will also increase success of the business product that is aimed at the terminal consumer. 3. What lessons does this have for the businesses discussed by McAdam and McCormack? Restructuring of business processes drives the need for business to integrate. As firms streamline and redesign the processes of their business, the application infrastructure facilitating the processes of business need to communicate with various systems in other new ways (Themistocleous & Corbitt, 2006). Those organizations that undergo restructuring of business processes like Nortel Networks did require integration middleware to connect the various systems. While these developments give a basic incentive for the interaction of internal and external integration of enterprises within organizations, companies in transition undergo additional needs of integration. This results in the business creating a demand for business integration between companies and within them. The factors include corporate self-service, customer relationship management, dynamic and virtual supply chains, and B2B commerce, as well as application hosting and service providers (Themistocleous & Corbitt, 2006). Many network businesses outsource vital parts of the supply chain process of execution to partners. These are inclusive of manufacturing specialists who construct components that are specialized, fulfillment specialists providing logistics, and specialists of warehouse management who manage warehouse inventory for the suppliers (Themistocleous & Corbitt, 2006). For example, most manufacturers of personal computers assemble their computers, but outsource PC board manufacturing while using a provider of third party logistics to ship the PCs to consumers directly. In a case like this, the supply chain of the company and business processes need to be linked tightly with the supplier’s systems of the supply chain. This should make sure that there is global visibility of levels of inventory, as well as patterns of demand to every participant. Software for B2B integration links together these systems (Themistocleous & Corbitt, 2006). 4. Using the above case studies as a jumping-off point for further inquiry, identify key areas in which supply chain management can be influenced by business process integration and management. Successful supply chain management needs alterations from individual management of functions to integrate the activities into vital processes of the supply chain. For example, in a situation where a department tasked with purchases makes orders as needs are discovered (Croxton et al, 2011). The department for marketing communicates with distributors in response of client demand in an attempt to get ways of satisfying their demand. SCM can be influenced by BPI in several key areas. One of them is the process of procurement where new strategic plans will be constructed to support the process of flow management manufacturing. The procurement function will need to develop quick systems of communication like EDI, as well as internet linkage, of conveying needs in a rapid manner. Development and commercialization of products will also be influenced since suppliers and customers need to be integrated, into the process, to reduce the period required to get to the market (Croxton et al, 2011). The process of manufacturing flow management is also influenced since the process should be flexible to accommodate customization in mass, as well as for market changes response. References Cagliano, Raffaella. Caniato, Federico. & Spina, Gianluca. (2006). The Linkage between Supply Chain Integration and Manufacturing Improvement Programmes. International Journal of operations and production Management, 282-299. Croxton, Keely. Garcia-Dastugue, Sebastian. & Lambert, Douglas. (2011). The Supply Chain Management processes. The International Journal of Logistics Management, 13-36. McAdam, Rodney. & McCormack, Daniel. (2001). Integrating business processes for global alignment and supply chain management. Business Process Management Journal, 113-130. Themistocleous, Marinos. & Corbitt, Gail. (2006). Is business process integration Feasible? . Journal of Enterprise Information Management , 434-449. Topolsek, Darja. Lipicnik, Martin. & Gajsek, Brigita. (2006). The Importance of Internal Integration for a Successful External Integration of the Supply Chain. Journal of Business Logistics, 45-54. Zhu, J. Tian, Z. Sun, W. Ye, S. Ding, W. Wang, C. Wu, G. Weng, L. Huang, S. Liu, B. & Chou D. (2004). Model-driven business process integration and management: A case Study with the Bank Sinopac Regional Service Platform. IBM Journal of Research and Development , 649-669. (Zhu et al, 2004) Read More