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Critical analysis of the recent literature review in logistics/supply chain performance and practices

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Running head: Critical analysis of the recent literature review in logistics/supply chain performance and practices
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Critical analysis of the recent literature review in logistics/supply chain performance and practices

Introduction

Supply chain encompasses all the operations of a company including information sharing, service and product distribution, information sharing, response to shareholders’ complaints, networking, and innovation. Many firms especially in the current fast-paced word due to globalization and technological advancement realize its significance: each has to strive for competitive advantage (Agus, 2008). In addition, unpredictability in the market environment causes uncertainty in business thriving. This paper presents a critical analysis of recent literature review on Supply chain flexibility, supply chain quality management, strategic supplier partnerships, customer relations and information sharing.

Literature review

Supply chain flexibility

In ancient times, supply chain mainly focused on delivering products as fast as possible while incurring the least costs. Nevertheless, in the current society, customer demands and other shareholders preferences are changing which call for flexibility. There has been no clear definition of the indicator. However, it is mainly defined as ‘…the possibility to respond to short-term changes in demand or supply situations of other external disruptions together with the adjustment to strategic and structural shifts in the environment of the supply chain’ (Lee 2004, as cited by Jayant & Ghagra 2013, p.3). It combines both adaptability and agility in achieving competitiveness. According to research done by Jayant & Ghagra (2013), they focused on defining measures to undertake to ensure flexibility is the catalyst for competitive advantage for most firms. The research entailed case studies of various companies including Toyota, an automotive company and Zara a clothing company. Their findings indicate that flexibility is not a new concept but its implementation has been minimal in supply chain management. The writer agrees with the implications of the research that flexibility is the essential means for achieving the X factor as far as demand and preference from stakeholders are concerned. The achievement of this is through enhancing relationships between the firm and suppliers, company and consumers and firm and employees.

Contemporary employee engagement in the undertakings of any entity is crucial since these come into contact with clients often than the managers and Chief Executive officers. There ought to be collaboration among all stakeholders and a defined channel of consistent communication. Thus, it is assurance for integration of the needs and complains of shareholders in the business management systems and acting upon them with immediate effect. With this regard, the primary role for supply chain- meeting customers’ demands can have a successful implementation (Bryne et al., 2013). Even though the research provides the best measures in ensuring flexibility, its methodologies are wanting since case study and recent literature are mainly secondary sources of data. More research needs to be done on what factors can determine the success of the identified measures.

Arawat (2011), in his study, presented theory of change mainly known as is the program theory. Since supply change is a process geared towards improving the outputs of a company, it utilizes program approach in linking them up them up to the inputs. It is an important tool in unveiling what strategies to us when there is the need for flexibility. It explains how all variable in supply chain management affect business development and impact on company’s competitive advantage. The theory focuses mainly on closing any existing or emerging gaps, which may lower the performance of the organization.

Their findings indicate that there is a correlation between increased product output and embracing new technology. Consequently, for an organization to achieve efficiency and effectiveness in its operations, it has to cultivate enhanced supply chain flexibility. The latter’s achievement is not only taking on lean production but also, modern innovation and technology. These make work easier and save time and production costs. The research used Pearson’s correlation and structural equation modeling to analyze its findings. From the analyses of the results, it is clear that there is a relationship between supply chain flexibility, Supply Chain Flexibility, and organizational performance. It is in line other researchers, which attest to the impact a well-oriented supply chain management embraces and tackles flexibility thus enhancing business performance.

Supply chain quality management

The current business world is focusing on quality as one of the essential factors in increasing demand. Therefore, well-managed logistics leverage competitive advantage in most companies. Fernandes et al., (2014) in their research on the relationship between quality management and supply chain unveiled the crucial issues influencing the integration of quality management. The writer agrees with their insight that successful quality management calls for flexibility and responsiveness to issues raised by all stakeholders. Empirical research by Arumugam et al., (2008) as cited by Fernandes et al., (2014) discovered that close and quick response to customer issues is the primary determinant for excellent management of the supply chain process. The findings are of the significant essence since customers are one of the stakeholders whom if not well handled concerning their complaints or demands can put a business in a compromising situation. With the increasing access to technology and access to the internet, a company’s reputation can be ruined by social media advocacy against its services, which not only reduces its competitive advantage but also affects its growth and development. Quality ensures reduced losses and increased profits thus the increase of the entity across nations since diversification of target markets is one of the new strategies to keep at par with the high rate of globalization.

Wang et al., 2004 as cited by Fernandes denotes that quality management in logistics entails the integration of all supply chain processes. Focusing on one arm of any process leaves a gap in its consistent success. This is because all the components are interrelated, and the success of one impact positively on requires the other. For example, flexibility is an aggregation to the rate of responsiveness, which further depends on the quality of information sharing communications systems and the morale of the employees. Highly motivated employees with well-managed work related stress have a higher affinity for delivering timely and quality services to clients. Nevertheless, suppliers are also essential stakeholder with which any organization needs to have a clear mutual benefit sine the business remains at stake upon their withdrawal. Commitment from all stakeholders ensures that each plays their role excellently thus enhancing collaborations for successful coexistence. They also note that a mutual benefit relationship with all stakeholders not only provides value addition in the supply chain processes but also, increased entity performance in general.

Earlier research by Sharma & Agarwal (2012) supports the findings of the above research that supply chain quality management determines the company’s performance. This aspect needs emphasizes on not only onto customers needs but also to distributors, suppliers, employees, and manufacturers. Quality management has to have measuring channels, continued innovation and service improvement not leaving out scrutinizing them through thorough analysis. The writer agrees that it is a necessity to put much emphasis on products quality to ensure that all customers are satisfied. An in-depth analysis of the quality enhances the performance of the organization leaving the customers with no room for considering rival companies’ products. Winning customers’ trust by the provision of quality services at an affordable price increases their loyalty and thus catapulting the entity’s competitive advantage. According to Foster 2008, as cited by Sharma & Agarwal 2012, there are various components for quality management, which vary in determining its impact. They include supplier relations, quality practices and focus on the customer, Human Resource practices, and leadership. A broad examination of the above variables confirms that they are the building blocks for a successful quality management. Human Resources practices have gained more importance in the current tech era thus; they should always seek to empower the concerned parties with essential skills to augment organization output. Sharma & Agarwal’s research mainly emphasizes on product quality improvement since it is the end-determining factor to customers preference. Nonetheless, there is a need to focus on all other sectors since all are interdependent.

Logistics/supply chain practices

Strategic supplier partnerships

Suppliers are one of the primary stakeholders in any business. They provide the essential inputs required and products to the intended customers. According to Arawat & Hassan 2011, these partnerships entail collaboration of two or several companies to have a joint effort towards increased business productivity. They range from manufacturing to production, marketing and distribution. They are essential in ensuring that a company maintains suppliers with whom they share a common goal in business excellence. It leads to reduced costs in managing sales and thus high-profit margins compared to companies, which do not embrace. Its significance is actually, more defined by small organizations which partner with big ones since they can benchmark on their individual practices hence increasing their competitive advantage. Pearson’s correlation method implies that companies ought to choose their supplier partnerships based off quality as opposed to costs. This is a brilliant observation since the provision of quality services is the main aim for any business. However, the choice should also be directly proportional to the costs since if it proves to be expensive than the outputs it realizes then the company does not meet its target objectives and set profits. The research made a comparison between companies, which perform high and those that have little performance in the business realm. The findings indicated that substantially performed companies have long-term and broadly diversified supplier partnership compared to least accomplished ones.It shows how important quality supplier companies are in enhancing business performance. However, the high performance is not solely dependent on vendor partnerships but all other practices of logistics.

In another research by Sukati et al., 2011, they investigated how some supply chain practices impact on business development and performance in general. Chain & Paulraj (2004) as cited by Sukati et al., (2011) agree with Sharman & Hassan’s research that long- term supplier relationships encourage transparency and mutual trust. Each party can share their rewards, losses and strategies they incorporate to increase their competitive advantage. However, it is also essential to consider that familiarity breeds loopholes due to the confidence each has over the other. Therefore, it is ideal to be keen not to be let down by the most trusted partner. Maintaining close relations with other suppliers is necessary for a company since they may need them in future (Agus, 2008). From the correlation analysis presented in Sukati et al., research, imply that supplier partnerships, information sharing, and customer relations are all interdependent. The study also found that strategic supplier partnerships determine the quality, delivering of products and the rate of innovation in the market. The significance of these findings is that quality supplier partnerships at an affordable cost ensure quality products distribution to clients and thus high customer preference. It is because quality, timeliness, dependability and reasonable costs are key customer motivators. It, in turn, enhances customer – company relations and high chances for referrals on friends. It earns the company a significant competitive advantage.

Information sharing

The mode of communication in any business is a determinant of the rate of its success. Well-developed channels of communication among all shareholders enhance collaboration and transparency in all operations. Research conducted in Australia by Baihaqi (2006), indicates that information sharing is an essential practice connecting all other supply chain practices. It is because any action undertaken in enhancing business performance requires that information transfer from one party to the other. It could be among suppliers, between customers and distributors all the entire stakeholders’ team. However, there are considerations to observe on how far information can be share in the downstream and upstream spheres of the supply chain. The integration process of supply chain practices highly depends on information sharing. The information shared depends on the physical locations of the customers, their social segmentation, and product demands. For example, the information shared to McDonald’s customers in Australia will differ from that shared among South Korea Clients due to the difference in cultural segmentation. The terminologies and channels for sharing the information in the countries vary.

Information sharing among partners is such determinants as the beliefs and values of each company. It is a point to consider limiting crossing borders and ruining the relationships. An analytical research by Choi (2010) denotes how businesses in the information age have thrived due to enhanced decision- making and access to opportunities through sharing information. It is true because the diversification in the modes of communication increases efficiency and effectiveness of business operations. Nahmias (2001) as cited by Choi (2010) defines information as a source of power for many business leaders to make sound decisions and spearhead programs, which cultivate efficiency in business operations. Information is powerful since it gives one an authority to understand the weaknesses or strengths of business rivals hence easy to form attack measures. Besides, efficient flow of information from customers ensures that strategies are laid to respond to their needs with ease. Current information sharing systems like Enterprise Resource Planning maximum utilization can save time and increase the time dedicated towards business enhancement strategies proposed.

The kind of information shared determines the kind of actions to be undertaken. As a result, information thorough verification is essential before it releases on to the potential recipients. Information once shared is hard to retrieve especially in the current technological advanced world. Sharing information with errors can reduce the reputation of a firm. As Choi 2010 p. 114, explains, the personnel editing and releasing information need spectacular skills in editing and analysis of data. Should there be any error, then early detection and rectification are paramount. Apologies making to the public and promise to see that it does not occur again made. Such can be successful through inclusively participatory incentives and information sharing platforms organized for all involved parties.

Innovation

The mode of operating businesses in the twenty-first century have changed and evolved tremendously. Well, this is the resultant factor of the increased rate of market demand changes, advanced technology, globalization and severe competition. Consequently, the supply chain practices have to stretch further to remain significant in the global business arena. The achievement of this can encompass integrating innovation and creativity in supply chain process. Innovation breeds new strategies of enhancing quality product promotion, problem-solving, information sharing, maintaining supplier partnerships and responsiveness. Environmental sustainability is one of the key components of Corporate Social Responsibility. According to Gupta et al., 2013, environmental conservation has become a global issue of concern. Measures like placing a price on carbon implementation gears towards reducing carbon emissions into the atmosphere. Companies thus need to innovate new ways of increasing production while minimizing the rate of environmental pollution.

Innovation in a supply chain is evident through continuous improvement in the products provides, modes of sharing information, response to issues, customer relations and Human Resource Management. Christmann (2000) as cited by Gupta et al., 2013 denotes that all companies that have had an element of novelty stand a higher chance of having sustainable development in future. It is because innovation is a broad practice, which can target the costs or quality of products. Gupta et al. 2013, point out that great change in business realization is through inclusive coordination and collaboration among the concerned parties. It runs down to diversity since every member has opinions, which are different from the other. Also, innovation can entail value addition to the supply chain itself, which increases competitive advantage.

In another study by Kristen et al., 2013, change is significant in increasing market share. Since much innovation points on enhancing service provision to clients, integrating the customers into the innovation process can increase the rate of new strategies invention. Customers have ideas of the services they need and can have an insight on how to cultivate them. Also, crowdsourcing especially on social media platforms can provide an array of ideas and filter them with their quality as rated by most participants. Researchers show that future customer logistics has easy identification from such inclusively participatory approaches. According to Bigliardi & Dormio (2009), the inventiveness in supply chain determinant is not only technological originality but also non-technological ones. They point out that innovation is largely based on embracing green supply chain. However, there is much research and innovations need to realize a full implementation of the green supply chain. If all logistics seek to conserve nature, then there will be a realization of a subtle environment. Hervani et al., 2005 as cited by Gupta et al., 2013, made a discovery of the green movement in the supply chain. They insisted on the need to have transportation, production, packaging, and manufacturing systems to reduce environmental pollution. These entail reusing or recycling biodegradable products and packaging materials. Such measures will ensure that the rate of global warming and unpredictable climate change reduces since they are one of the megatrends causing massive economic shifts hence fluctuations and a high cost of living (Bryne et al., 2013). The main aim for innovation is cultivating sustainable development whose core success lies on the environmental sustainability.

Conclusion

In summary, Supply Chain is an essential process in enhancing business outputs. It encompasses various practices and indicators, which determine the rate of business performance. From the literature reviews, it is evident that the rate of globalization has influenced business markets, customer preferences and demands, competition and information sharing. It is, therefore, crucial for businesses to tackle the practices tactfully to achieve competitive advantage. The analyzed methods and indicators are interdependent. Thus, their total integration is paramount. Customer demands are ease identification through well-defined information sharing systems, which also determine the rate of responsiveness. Strategic supplier partnerships need good channels of information sharing to ensure collaboration and coordination. Customer integration in innovation processes is a necessity for achieving well-defined future customer logistics. Embracing stakeholder theory in environmental conservation is crucial since stakeholders; especially the clients and society under which the business operates are highly impacted on by its activities. Going green in all supply chain operations is an innovative measure geared towards attaining sustainable development. Provision of quality products to customers is a pivotal role in supply chain since customers are the target market for the products.

Bibliography

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Baihaqi, I. and Beaumont, N., 2006. Information sharing in supply chains: a literature review and research agenda. Department of Management, Monash University.

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