Introduction to Logistics and Supply Chain Management
If a company produces a product or offers a service that consists of several parts that are sold to the customer, then supply chain is one of the main aspects of the business. By managing this supply chain, it is possible to illustrate logistics as well as management practice that directs the flow of services and/or goods to the customer by means of delivering the best quality. Every company that either produces products or offers services on the market has to ensure thorough logistics and supply chain management. Heads of the companies all over the world should evaluate the quality this procedure and constantly improve it to remain afloat in the industry. Analysis of the company that the research is going to use as an example will allow to illustrate aspects of both logistics and supply chain management. The purpose is to address the problem, manage it in terms of forecast capacity, and execute it against the demand. This research analyzes Deluxe Corporations in terms of the means of managing the supply chain risk as well as international business and generic business management models and theories. It will also focus on European multi-national corporations and international business management theories such as Porter's Value Chain Theory and Five Forces Model. At the same time, the research paper will include Porter's Generic Strategies, key management models, such as Henri Fayol’s Five Functions and Taylor's Scientific Management Theories, along with the X and Y Theories that are used in the frames of international business matters. Furthermore, the study will examine present and future concepts of logistics and supply chain management in terms of European practice comprising the Agile Supply Chain perspectives (Cooper, Browne, & Peters, 1994).
Aims and Objectives
The overall problem is how to properly carry out supply chain management in the Deluxe Corporation. The thing is that complexity of supply chain differs depending on the company and the range of services or goods it offers in the market, which also varies depending on the size of the business. The main focus is on the customer and, therefore, the supply chain begins and finishes with the customer. Planning is very important for supply chain management and it takes a significant part of the organizational process. It is used to measure supply and demand in order to promote the offer accordingly (Christopher, 2011).
The purchasing procedure is what influences a value of the service or a product. Once there is a supply chain, several parts of business are to be completed in order to make the customer happy. The organization should work with the aim to combine all these aspects of trade and make sure they work together in order to offer the desired product and/or service to a client. The last phase is delivering goods or a service once they are ready for sale. If a business is well organized, than the process should be simple and easy to understand (Anbanandam, Banwet, & Shankar, 2011).
Deluxe Corporation Case Study
Deluxe Corporation could be taken as an example to illustrate capacity planning, demand, and supply chain management. This company is one of world’s leading providers of web services with customers in North America, South America, and Europe. The range of services varies from different kinds of products to a variety of services for small businesses and financial institutions. It is all about web design and hosting, search, and e-mail marketing, logo design services, promotional products, retail packaging, and blogging. A special care is given to businesses that provide financial services. According to the website data, “The strength of the company is rooted in its heritage and innovation that took a long path from a loan of a $300 and the idea to the $1.4 billion company” – an industry leader on the world market, whose key principle at work is innovation with integrity. Deluxe Corporation not only delivers high-quality services and products, but also donates to victims of Japan crisis and many other similar events in the world of hazards. The work of the company is aimed at delivering the value to customers worldwide, which covers brand equity, revenue growth, costs control, market share improvements, and operational efficiency.
The overall aim of the company is to deliver the quality to customers in all possible ways. Perfection of such an idea is a key to high-quality organization. The forecast for capacity can be made in the way to measure performance status and determine the capacity on all levels of client servicing. Performance can be measured by trend analysis and current and agreed usage levels that indicate performance. Trend evaluation identifies the increase or decrease of demand for goods and/or services of the company. By using Deluxe Corporation as an example, the research is aimed at revealing its capacity on the high level of prosperity. This approach can be guided mainly by the number of clients and companies they work with. In other words, capacity of IT services is adequate based on the infrastructure of the company, which is formed to deliver the agreed services to the target market. In order to measure the target level, Deluxe evaluates its cost-effectiveness considering all alternatives fulfilled on a timely basis (Deluxe Corporation, 2013).
In order to manage capacity, it is important to determine all resources needed to provide services and goods in a short, medium, and long-term perspectives. The demand is formed based on customers’ needs to buy goods and/or services. The amount of items sold does not mean anything, but simply states the volume at a given time. Considering Deluxe Company, its supply and demand on the marketplace are almost the same. This makes it possible for the company to grow and improve its working abilities as well as its structure in a more creative and thorough way (Barratt & Oke, 2007).
The overall infrastructure is all about the working process and how data is managed within a company depending on its performance and supply chain requirements. It is possible to see that the range of its services is huge and that makes the company feel itself confident on the market. The number of clients differs but these are corporate clients that order services based on demand, and thus fulfill operational costs along with supply chain directions. In other words, in case the organization is taking care of the work and measures it accordingly, it will always lead to equality between the demand for such goods and/or services. In addition, it will help maintain the supply generated on the world market by considering a huge part of shares that create a favorable reputation in the industry (Daugherty, 2011).
The forecast for capacity and demand for Deluxe Company in the future depends on the market and its fluctuations. Taking into account the trends of recent years, it is possible to see a growing capacity and demand for such services in every sphere of business. This shows that both demand of the market as well as capacity of the company to produce such goods and offer such services will be even higher in the long-term perspective. Today, there are more people who are willing to pay for the same goods and/or services the difference is price, which can be measured by means of the value brought to the client on the marketplace. Deluxe Corporation is a top leader of the industry, so it takes more than half of the market to deliver its services and goods to the public. If the business is to be successful, it is important to consider the need for a descent logistics, supply chain management, and design it according to demand practice of the desired market. Such a scenario can be measured and achieved in the future by means of constant workout of resources that company has as well as the ability of the management to improve its services by constantly increasing the quality of customer service. Nowadays, Deluxe Company is the leader in its sphere, and any further competition is not a problem for the only reason that it has the vast majority of assets to offer its clients worldwide. Moreover, high level of company's organization influences all levels of its operations (Deluxe Corporation, 2013).
Three Dimensions of Time Based Competition
Main resources that are needed are to learn how to work with time. For every company it is of main importance as it differentiates the time being busy versus the time being productive. One company or an organization can come up with a certain amount of goods and/services but if it could learn to manage time accordingly, it will be one-step forward to produce/offer a lot more goods and/services to customers (Enarsson, 2006).
Competitive advantage of time is the value that products and/or services bring to the customer at the lowest cost. In case Deluxe Company does the same to manage time more effectively, it will be able to bring even more value to the public and thus satisfy the needs of customers in services and/or products worldwide. When companies respond rapidly to such changes in the market, they attract more customers in the most positive way (Cannella & Ciancimino, 2010).
Major benefits of time-based competition are values of customers and suppliers, innovation, and the level of services offered to clients around the world. As for customer values, they could be reached through flexible and faster response by managing purchasing decision on time, controlling the procedure of cancellation, and offer more special services or modified products (Closs, Speier, & Meacham, 2011).
Considering the value for a supplier, it is possible to improve responsiveness of manufactures and gain another share with clients, who will provide the company with additional earnings based on its performance. If this happens then the company will increase its profit and response of the customers on the world market (Ha, Park & Cho, 2011).
If to talk about time and innovations, companies grow and develop their businesses more effectively by applying a descent supply management and logistics. The purpose is to improve the goods and/or services and deliver them to the end customer through the world market. This brings advantages in terms of market share that produces more clients. Next are competitive advantages that should sustain on all levels of company’s interactions. Finally, what makes the businesses worldwide grow drastically is that some companies choose to stop the standard working procedure and others invent something new but more efficient according to new technologies that exist nowadays (Carter & Rogers, 2008).
The level of services that are offered to customers always played an important role in every kind of business. Rising costs of a service and/or product makes some companies reduce health-care expenditures, and this in the end results in poor quality of work that leads to a negative impact from the side of clients. Furthermore, it results in all kinds of scheduling and coordination problems, including poor efficiency, delays at work, and anxiety. In order to improve such a scenario, companies should redo operational procedures and thus eliminate this process (Simchi-Levi & Fine, 2010).
Proper logistics management has to help redesign the order processing in a way to reduce delivery time. Another thing to do is to launch new products that could bring more value to customers. In all, it makes the total redesign of the procedure more qualified and time-efficient during manufacturing and fulfillment (Kleiman, 2000).
When talking about the product development companies can think of the set of activities that could be made easier such as analyzing markets, competitors, and technologies that are used. In order to improve them, it is important to split workers into teams and have a manager to guide their project performance. The people are different and thus are difficult to coordinate. This solution works best to improve it (Heiens, Pleshko, & Leach, 2004).
International Business, Generic Business Management Models and Theories
International business during the past 50 years has used various units of analysis. Vast majority of neoclassical global finances is built upon the convincing hypothesis that changes in dynamic grants throughout the boundaries will head towards intercontinental contacts despite the allocations of capital or goods. In other words, it is believed that there is no governmental contest to be adopted in generating an effective system of global trade (Bartels & Christopher, 2000).
Vernon and Dunning
Vernon and Dunning identify the value of companies in their international business studies and examine their initial position in recent IB analysis. Vernon’s product life cycle framework published in 1966 claims that the Government of the United States has a technology-related as well as country specific advantage (CSA) surrounded in the US owned multinational enterprises (MNEs) (Vernon, 1971). These US mother companies generate small models or branch plants in Canada and Western Europe that expertise potential business advantages in overseas divisions. This leads to a subsidiary allocation of technologies to many countries along with other paybacks of foreign possession (Dunning & Lundan, 2008).
European Multi-national Corporations and International Business Management Theories
Forthcoming theoretic work in IB should continue to study connections between strategic components of the analysis approved in the earlier 50 years. A special emphasis should be put on the subsidiaries as the key constructing part while considering the relevance of the local approach of MNEs in the world (Daniels, Lee, & Sulivan, 2011).
Porter's Value Chain Theory and Five Forces Model
Performance of Deluxe Corporation can be measured by means of Porter's theory and five forces model, according to which Deluxe Corporation can achieve more benefits compared to its competitors. Porter’s Five Forces Model examines future trends for the company and its business strategy that focuses on Michael Porter’s five forces framework analyses. These 5 elements make up a strong competitive strategy for Deluxe Corporation. Consequently, Porter's theories and models have a strong impact on industry development (Daniels, Lee, & Sulivan, 2011).
Competitive Rivalry: World economy influences the way businesses operate in contemporary environment, which defines competition as well as creates the advantage towards the development of the company as a whole. Goal-oriented approach is aimed at managing supply and demand with the help of industry derivatives. In case of Deluxe Corporation, rivals are applying the major position to dominate the market. For example, pricing strategies, competition, diversity, and product line orientation are aimed at managing the supply chain as effectively as it is possible in given economic circumstances (Deluxe Corporation, 2013).
Threat of Substitutes: Porter's model evaluates Deluxe Corporation in terms of its competition and position in production forces environment in the market. A threat of substitutes can affect its pricing policy by means of changing the demand over pricing of competitors, including their performance and product orientation (Deluxe Corporation, 2013).
Buyer Power: The buying power of consumers has a strong impact on product lines on the market. Major concerns for Deluxe Corporation are “substitution leverage, buying capacity, buyer statistics, trademark exclusivity, price volatility, industrial goods range, and other alternatives” (Deluxe Corporation, 2013).
Supplier Power: Deluxe Corporation regularly evaluates its five elements of power supply in order to emphasize “commercial responsiveness, status of the supply capacity, difference of inputs and their influence on the presence of supplementary inputs” (Deluxe Corporation, 2013).
Threat of New Entry: There is always a possibility of entry in one industry as well as one marketplace. This can be considered a threat for the reason that it leads to lower revenue the companies can generate while working on the same market. Deluxe Corporation overlooks possible threats and works actively to succeed in the marketplace. At the same time, it does not neglect government prospects and economic stability. This helps decrease the possibility of entry for competitors as well as get ready for industry changes (Deluxe Corporation, 2013).
Porter's Generic Strategies
The use of Michael Porter's generic strategies helps Deluxe Corporation predict possible ways of communication with customers through assessing costs and diversity of its products in the marketplace. Deluxe Corporation uses variation of price and manages to address the focus of the demand capacity in the market. Thus, the analysis of Deluxe Corporation allows it to operate effectively in the competitive environment. In this way, the company empowers the work of its assets, financial traits, customer response, and both internal and external business strategies (Ravenhill, 2005).
Henri Fayol’s Five Functions and Taylor's Scientific Management Theories
The necessary point of all professional managers is to be initiative in terms of personal approach to workers as well as to have proficient understanding of project's structure. Only in this way, they can make the working process function effectively on all levels. This is explained by strong personal and professional qualities of top management. Improvement of such practice can be made easier in terms of technical details. Every company needs to have a manager it can always count on, who always works as needed, and finishes the job on time (Krugman & Obstfeld, 2003).
McGregor X and Y Theories
McGregor created two theories of human behavior at work and one of them is Theory X and Theory Y. The overall idea is that people are different and there is no sense in using the same management practice for every worker. Theory X can be explained on the example of workers that are as follows. The first one illustrates behavior of people, who do not like their jobs and avoid doing it where it is possible. Such people do not understand their responsibilities and prefer to be led rather than lead others. Finally, those people desire to be safe at the workplace, otherwise this work will be unacceptable. Theory Y could be illustrated on the example of workers, who consider their work to be an amusement as they have joy while fulfilling their daily responsibilities. They usually spend time as if they rest an workplace. Other people think of a job as if it is two in one: pleasure and disappointment. However, they should know that in case the job is not done, there can be a punishment for it. The rest of it belongs to highly motivated people, who are responsible and eager to do the job perfectly because they enjoy what they are doing (Management, 2011).
Present and Future Concepts of Logistics and Supply Chain Management
Legal environment and safety on the workplace are very important to apply the supply chain and overcome various business risks. There are several types of risks, including governmental, sourcing or production, business, economic, social, and environmental. Supply-chain risk management leads to the following activities: review of design concept, specification development, product risk assessment, hazard planning, review and monitoring, product development testing, production failure review, recall planning, data and technical management (De Meyer, Van Dierdanck, & Vercecke, 1996).
The concept and design are very important for every company or organization in order to develop a product. This is because with successful concept and design it is possible to trade on the market effectively. In order to manage risks whether the business is going to be a success or not, companies are willing to advertise their products in the market. It has to do with laws and regulations and manage essential training and quality assurance programs to stay afloat. Companies consider several aspects to be of main importance on the road to a successful logistics and supply chain management. These aspects are discussed further (Johnson & Turner, 2006).
Sourcing or materials - with the help of these elements companies conduct research about where to take resources in order to produce goods for people. It has a thorough practice to manage the delivery process and take all kinds of measures to make it legal for public use. In this way, organizations develop a specification plan, according to which they offer products and services to the market. High-standard manufacturing makes the quality of work meet the requirements of clients globally. Moreover, any goods they trade should be of high quality that is ensured by the company and have a 100% guarantee of money returns without any further questions or clarifications (Kippenberger, 1997).
Implications of wholesale or retail business for companies are very important in order to benchmark their product lines successfully. Furthermore, they confirm the ongoing compliance with all testing technologies and techniques. In addition, training sessions are very important to put the company on the highest level of expertise and working practice. The last phase is the end consumer, who is at the core of the business. Due to respect to customers as well as constant analysis of their behavior on the marketplace, major companies focus on success and failure analysis, support practice, recall of groups, and retail audit.
Talking about product issues, companies always need to work on compliance with the legislation of areas to address the standards and local legislation policy. In order to perform in the market, companies make right decisions and manage their business properly by means of their knowledge when working with supply chain management, other managers, or their subordinates and reflect every benefit for the business (TechTarget, 2011).
European Supply Chain and Logistics Operations to Illustrate Agile Supply Chain
Pathways to agility are formed with the help of effective supply chain management that is extended in terms of the enterprise from the point of supply side, which is aimed at demand while considering internal factors. Supply speaks mostly about strategic sourcing, synchronized production, and co-location, whereas the demand refers to collaborative planning and co-managed inventory. In fact, it goes with data system integration. Internal part is to reduce the non-value adding time, complexity, and postponement (UNCTAD, 2006).
Agile supply chain is directed by process alignment, it is network-based and market-sensitive. The process alignment minds synchronous supply and co-managed inventory. The network covers both leverage capabilities and competence focus. Markets respond to daily feedback from customers as well as to the emerging trends. Therefore, companies should use seven steps to agility such as substitute information for inventory, work smarter but not harder, create partnerships with suppliers, reduce complexity, postpone the assembly of products, manage all processes, not just functions, and utilize the appropriate performance (Daugherty, 2011).
The meaning and understanding of a responsive business talks about itself. One should take into account a variety of aspects to remaining sustainable in the market. On one hand, the key aspects are to mind the supply chain and everything it covers, such as a flexible response, time reduction, add-on value, re-engineering the production process, working out the capacity, and standardization in economic scale. On the other hand, it is to talk about organizational agility, visibility of the demand, inventory and process management, replenishment programs, synchronized production, and cross-functional teams within a company (Barratt & Oke, 2007).
Every single organization in the world needs to consider logistics as well as supply chain management, including the capacity and demand for the production quality, the area of services, and the amount of goods. Competition is always going to be present in the market, and companies have to be sure that in case they are running a business with ease and understanding, they proclaim it for the sake of customers worldwide and will safeguard themselves from every kind of risk connected to cases of hazards (De Meyer, Van Dierdanck, & Vercecke, 1996).
If companies are responsible for what they do and try to improve their business all the time, it means that they care for consumers and work for their good. People always pay attention to quality and deeply value providers of goods and/or services that are of a high quality. That is the reason why they have high purchasing power in response. Today, there is high amount of unpredictability and uncertainty in the marketplace, and if companies are performing with dignity, they will be the top ones with a deep value for quality. Furthermore, they will put supply chain management on high level among its competitors (Johnson & Turner, 2006).
Generally, it is always better to estimate the value of descent logistics and supply chain management in any sphere. On the example of Deluxe Corporation the research showed how important it is to comply with standards and regulations of supply chain as well as how important it is to maintain European businesses along with economic, financial, government, and other concerns. The research revealed the ways of application of theories in the sphere of supply chain management and logistics for high-level experience (Kippenberger, 1997).
Competition was also addressed with a help of Porter’s models and theories, including the Value Chain Theory, Five Forces Model, and Generic Strategies. The paper also discussed the importance of application of Henri Fayol’s Five Functions and Taylor's Scientific Management Theories and McGregor X and Y Theories for descent management practice. Special attention was paid to European practice of logistics and supply chain management, including Agile Supply Chain in relation to present and future concepts.