Supply Chain Management Harvard Case Solution & Analysis

INTRODUCTION

Nowadays, businesses around the world are operating in more interconnected and globalized world economy. The changing global business environment increased the level of competition in the global market. The resources in which organizations rely have become more challenging to access and more costly to operate. The globalization of world economy and differences between different countries have led the companies to face multiple issues and challenges such as expanding markets, high competition, and supply chain management, economic and political differences(Hill).

Moreover, the challenges include inflexible working environment, culture differences, inefficiency in economies of scale, and modern technology. Furthermore, the changing customers’needs and perspectives as well as government policies increase the pressure on the companies to reduce total costs in the entire supply chain, reduce inventories, better customer services, improve quality and effectively coordinate global demand and supply.

Supply chain management is a global network of various organizations that cooperate to improve the flow of material, information and the relationship between the suppliers, and customers at the lowest cost or discounted price and the highest speed. The basic objective of the effective supply chain management is the customers’ satisfaction, in order to gain customers’ advantage in the long run. Moreover, supply chain management is a source of competitive advantage that drives organizations to pursue dual goals and objectives of achieving both value advantage and operational excellence(DM Lambert).

Furthermore, effective supply chain comprises of organizations and the business activities that are required to make, design, and deliver products with value–added services to the customers at lower costs. Apart from that, businesses that learn the importance of supply chain will have a substantial competitive advantage in their markets. Therefore, it is important for the national and international businesses to develop an effective supply chain management, in order to prosper and sustain the long-term growth of the company.

SUPPLY CHAIN MANAGEMENT AND ECONOMICS

The growth of international supply chain has changed the distribution of income across countries. The global business participation in the supply chain was initiated by the successful completion of the value-added manufacturing tasks, which contributed to industrialization and high rates of economic growth in the various developing economies.

The process and procedure of catch-up with developed economies are more likely to get stronger and gain a competitive advantage because many of developing countries are seeking to move up the value chain by adopting advanced technology and build up effective human capital. Moreover, the global fragmentation of production has also affected the distribution of income within various countries(Li).

Global supply chain

The supply chains in 21st century are different from the advanced economies in the 20th century. Nowadays, supply chains are much more than extra trade parts and components. FDI is an integral part of these supply chain networks, hence capital investment in production capacity assumes greater importance. In a global supply chain, a country’s position in terms of production is correlated with its comparative advantage.

Developing countries vs. developed economies

Developing countries complete low-value unskilled labor tasks because they have a lack of skilled worker and employees to produce an innovative product and value-added services. On the other hand, countries with advanced economices generate innovative products and possess completes kills and capital intensive tasks effectively. Therefore, it is important for the country and companies to provide training to the workers and employees to generate more skills and knowledge regarding technology, culture differences, and economic differences.

Transfer of technology and knowledge

Moreover, the training session will motivate the employees to work effectively and efficiently, in order to increase profitability in the long run. Furthermore, the effective supply chain has made modern technology more active internationally by offshoring firms, especially in technical fields. The transfer of technology is facilitated through trade in intermediaries whereas, FDI made it possible for the developing countries such as South Korea, Singapore, and Hong Kong, to climb the product ladder in terms of quality, innovation, and capital intensity, in order to gain the competitive and comparative advantage.

Barriers to trade

Moreover, African countries and other countries have removed institution barriers to trade such as laws, customs producers, red tape, and personal security and improve infrastructure to compete inclusions in the international supply chain. Furthermore, it is important for the countries to invest innovative system skills development as well as increase the links to commodity exports(JW Lee)...................

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