Leadership Strategies for Improving Performance

Dissertation Title: Leadership Strategies for Improving Performance of SMEs in Saudi Arabia

Despite governmental support, healthy international trade and application of varied leadership styles, small and medium businesses in Saudi Arabia continue to struggle and are unable to sustain their operations. One of the factors that contribute to the decline of such firms is poor management. The study adopted the use of both quantitative as well as qualitative approaches in exploring the leadership strategies for improving the performance of small and medium enterprises in Saudi Arabia.

It uses surveys as well as secondary sources from various literatures to determine the leadership strategies that successful businesses in the Saudi Arabia have used to survive, especially during the tough financial times. The conceptual framework that is used in investigating the particular leadership strategies is the transformational leadership theory.

The theory has four tenets, which comprise of idealized influenced, individualized consideration, intellectual stimulation, and inspirational motivation. This research makes use of all these to determine particular ways of enhancing the profitability hence sustenance of the small and medium enterprise in the country. The intention of the study is to recommend the best leadership practices for small and medium enterprises.

The general objective of the study is to do a comprehensive study on Leadership Strategies for Improving the Performance of Small Businesses in Saudi Arabia. There exist various leadership strategies that when implemented have the potential of shifting fundamentally the organizational dynamics as well as the various strategic approaches to managing critical functions of small and medium businesses. The research will be guided by the following research questions:

  • How can leadership strategies be a tactical tool for enhancing success in the organization?
  • What are the leadership strategies that enhance the achievement of strategic business objectives?
  • What is the impact of strategic leadership on strategic development of SMEs in Saudi Arabia?
  • How do leaders drive organizational innovativeness as a strategy to implement change in the small businesses in Saudi Arabia?
  • How does ethical leadership influence the success of small businesses in Saudi Arabia?
Leadership Strategies Dissertation
Leadership Strategies Dissertation

Leadership Strategies Dissertation Contents

1 – Introduction
Context of SMEs
Background of the Study
Key SME Enablers in Saudi Arabia
Definition of SME
Strategic Management
Problem Statement
Objectives of Study
Research Questions
Importance of the Study
Limitations of the Study

2 – Literature Review
Organizational Innovativeness as a component of Leadership
Leadership versus Management
Strategic Leadership
Effective Strategy Implementation
Ethical Leadership
Theoretical Framework
Great Man Theory
Trait Theory
Contingency Theory (Situational)
Style and Behavior Theory
Skills and Characteristics of Strategic Leaders
Strategic Management Paradigm in Small Businesses in Saudi Arabia
Proposed Research Framework

3 – Research Methodology
Leadership Perceptions of small businesses in Saudi Arabia
Research Design
Case Study Research
Data Collection Method and Period of Study
Sample Population
Data Analysis

4 – Presentation of Findings
Gender
Measure of Age Central Tendency
Education Level
Years of Experience in Business
Area of Work
Strategic Leadership Skills key to SMEs
Commitment of Entrepreneurs
The effectiveness of Monshaat Support Center
Tactical Significance of Business Strategies
Significance on Monshaat to Strategy Development
Technology as an Essential Component of Growth
Influence of Ethical Leadership
Innovativeness
Inferential Analysis
ANOVA Model Summary
Testing the Relationship between Response and the Explanatory Variables

5 – Analysis of Findings and Discussions

6 – Research Discussions
Strategic Leadership Framework in SMEs
Monshaat Support Center
Organizational Innovativeness
Information Technology Capability
Presence of Monshaat Support Center
Effective Strategy Implementation
Ethical Leadership as a Strategic Tool for Growth

7 – Recommendations and Conclusion
Recommendations
Conclusion

References

Appendix
Survey Questions

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Globalisation Patterns of Consumption

Globalisation and Diversified International Patterns of Consumption

Title: With the evolution of human communication and transportation modes over decades and centuries, this world is squeezing smaller and smaller day by day in terms of interaction among people of different regions, ethnicity, races, and obviously different mind-sets. This changing characteristic of the world is perceived as the globalisation and the world is seemed to be a global village. The globalisation of this world has changed certain patterns of its villagers in terms of their thoughts, lifestyle, communication, buying and selling trends, and also their patterns of consuming the goods and commodities. The contemporary and recent researches on the cultural issues targeted the process of cultural change among migrants and minority people within the mainstream strata of a given culture; however, limited research is conducted on the behavioural transformation as a product of globalisation (Sobol, Cleveland, and Laroche, 2014).

This research essay is purposefully written to explore the underlying scenario related to this topic by including and referring to different literature and viewpoints of the scholars and experts. The theme of this essay will be to discuss and assess the aftermaths of globalisation on transforming the behavioural patterns of the people towards consumption of goods.

Globalisation Definition

The term ‘globalisation’ not only encompasses the economic and trading practices, but also the human agents or the practitioners whose behavioural attributes can impact the globalisation phenomenon itself. In this way, the globalisation curtails the influence of cultural or societal differences related to paradigm development and also widens its scope while including the economic and financial activities regarding consumption of services and products. Another understanding of the world globalisation can be established by considering it as the international transfer or exchange of public, money, commodities, knowledge and the cultural norms, which resulted in the boosting the awareness level of people in the two last decades of the last century (Jadoon, Butt, and Hayat, 2016).

In the context of social sciences including culture, sociology, political science, and also economics, the term globalisation is treated as comprising the international classification, electronic media, and the international treaty World Trade Organisation (Cornwell and Drennan, 2004).

It is explored through researches that the globalisation directly influences the patterns of consumptions and the society. The consuming trend and style a society adapts mostly rely on the development of thoughts and their needs. The significance of technological revolution in guiding the consuming patterns is pertinent for consideration. Moreover, the online shopping system has impacted the traditional trends and patterns enormously (Jadoon, Butt, and Hayat, 2016).

As per Ruediger John (2005), globalization process does not ensure the one’s freedom and security. It also lacks the definition of nations-wise social values along with the enforcement of global law pertaining to address human psychology and behaviours. Moreover, instead of politically addressing the cultural developments, the emphasis of globalisation is more on the spread and sharing of technology and economical boom (John, 2005).

Divid Howes (1996) in his book used the term homogenization which refers to the unity in the global village. The terminology depicts the paradigm of cultural and social influences in the international markets are due to the intrusion of commodities and products in the form of imports based on the knowledge gained through globalisation. This paradigm also emphasises the need to understand and accept the rise in the cultural and social differences occurred due to the export of domestic goods and the import of goods mostly produced in the western world. One contemporary contextualisation of the consumption patterns of people in the global village is the motivation of consumers or the people to choose the goods as per their own liking and disliking instead of being a blind victim of globalisation. This is because the people of the underdeveloped countries are often influenced to purchase those products which are not only new and alienated but most of the time also serves as damaging the local culture rather replacing it with the imported culture (Howes, 1996).

There is a need to go deeply to understand that the consumers’ attitude is influenced by both internal and external factors in the form of domestic culture and the consequences of globalisation respectively. Several types of research have been continuously conducted to examine the consumers with the help of examining their lifestyle. A consumer’s lifestyle is the agent of the tendency of adapting the change in behaviour for consuming items and products of a single or multiple manufacturers. It is again the globalisation which enforced manufacturers all around the world to be indulged in an extensive competition in order to win the consumer’s satisfaction. This ultimately helped the consumers in terms of having competitive quality in products (Dunn, 2015).

Globalisation MBA Project
Globalisation MBA Project

An argument in the work of Elena Kell (2012) supports that the globalisation forms and leads to a consumption based society in which consumption has become indispensible and along with its ethical practices. Consumers are generally unaware of the supply chain and operations management involved in the availability of products imported from foreign countries. Hence the ethical aspect of consumption addresses the consumer’s responsibility to be updated of the steps involved in the processes (Kell, 2012).

McCoid (2010) differentiate the consumption in its three shapes. According to that categorisation, the consumption of goods will not remain sustainable if the resources are used more than what exactly required, and this is called overconsumption. This mechanism often leads to the lower quality of life and damages the environment. On the contrary, the under-consumption is the utilisation of resources much less than the required, hence causing poor quality to health the lifestyle. It is observed that the main cause of under-consumption in the age of globalisation is the inequality in the social distribution of resources. Both forms of consumption do not contribute to sustainability. The sustainable consuming patterns, however, do not cause the environmental damage and the human health. In order to develop the consumption pattern in a sustainable way, there is a need to accept the relationship of over and under consumption with the globalisation, because in a global village, the under-consumption of most groups causes the over consumption of few groups (McCoid, 2010).

On a critical side, the contemporary consumption patterns have negatively impacted the development of human wellbeing on the individual as well as on societal levels. This change happens in a way that it spread the social inequalities among groups and even countries through globalisation. The inequalities are spread due to the differences in the quality of products and services for all different social classes within a certain society or the region. The global consumption pattern is also promoting and supporting the flow of resources to a limited class of people and groups who have much more wealth to spend on even luxurious items instead of just the basic needs, hence the poor class of people in the world continues to suffer the lacking of even basic needs due to the lack of resources. Similarly, the globalisation has intruded the consumption of food based items which are most of the times either not synchronised with the eating habits of the people of a particular country or are much expensive than their local alternatives. The adaption of foreign goods and items also often creates environmental problems in the form of waste disposal and discharge (Khor, 1998).

The increase in the free trade between countries has also enhanced the availability and quantity of goods and services for the end users. This scenario was for sure cannot be imagined the effectiveness of various global trade pacts, agreements, and the role of unions worldwide. With the increase in the quality as well as a variety of products through globalisation, the consumption pattern among people has drastically changed. People pay due importance in conducting a preliminary survey, physical or online, regarding the particular product they are going to buy. Moreover, unlike before, the brand has been given comparatively less importance by the consumers (Scriven, 2014).

The technological advancement, globalisation and the integration of countries around the world have significantly changed the consumption pattern of people all over. The internet facility got the users of around fifty million in only five years; hence it is pertinent to accept that through internet lives of thousands and millions of people in all countries evolved positively. The comparative survey has become much easier through the internet for everyone regarding any product before its purchase. Everyone in the global village can be informed of the patterns of the lifestyle of any other person or group in other parts of the world (Kónya and Ohashi, 2004).

Globalisation Conclusion

This research essay has explored different theoretical perspectives of various authors to explore the aftermaths of globalisation on transforming the behavioural patterns of the people towards consumption of goods. It can now be concluded after a comparative analysis of various viewpoints on the topic, that the globalisation has certainly opened the door of opportunities for not only sharing of knowledge, technology, and goods, but also played and has been playing a significant role in designing and changing the behavioural patterns of consumption among consumers and end users all around the world in this global village. Some paradigms consider it as positive while the other as the negative role of globalisation because, in some perspectives, it has also led towards social and financial inequalities among societies and classes of people.

References

Cornwell, T.B. and Drennan, J., 2004. Cross-cultural consumer/consumption research: dealing with issues emerging from globalization and fragmentation. Journal of Macro marketing24(2), pp.108-121.

Dunn, K., 2015. Globalization and consumer: What marketer needs to know. The Neumann Business Review, pp.16-30.

Howes, D., 1996. Cross-cultural consumption: global markets, local realities. Taylor & Francis US.

Jadoon, A.K., Butt, A.R. and Hayat, M.A., 2016. Development of Measurement Models for Globalization, Consumption Patterns and Culture: A Case Study of Three Big Cities of Punjab, Pakistan. Pakistan Economic and Social Review54(2), p.327.

John, R., 2005. Globalized Culture, Consumption and Identity. Translated by Gunilla Zedigh. Baden,

Kell, E., 2012. Ethical consumer in a globalized world: challenges for the individual’s identity. A study on ethical consumers in Lund and Malmö.

Khor, M., 1998. Globalisation, Income Distribution, Consumption Patterns and Effects on Human and Sustainable Development (no. Hdocpa-1998-06). Human Development Report Office (HDRO), United Nations Development Programme (UNDP).

Kónya, I. and Ohashi, H., 2004. Globalization and consumption patterns among the OECD countries.

McCoid, C.H., 2010. Globalization and the Consumer Society. Global Security and International Political Economy–Volume II, p.49.

Scriven, J., 2014. The Impact of Globalization on the Consumer. The Nouman Business Review, pp.13-23.

Sobol, K., Cleveland, M. and Laroche, M., 2014. Globalization, Culture and Consumption Behavior: An Empirical Study of Dutch Consumers.

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Outsourcing Low Cost Countries

Benefits and Risks of Outsourcing to Low Cost Countries

Apparel and luxury value chains have come up with strategies so as to be cost competitive, increase the income, and expand the market for their goods. Outsourcing the end-to-end supply chain means that activities of an organization are carried out by an external company that specializes in these activities (Pickles et al., 2015). More so, a company can pay attention to its key competencies satisfy consumers, and be more flexible in maintenance and operation of its supply chain.

Apparel and luxury industry is very volatile today, frequent changes in expenses, risks, and demands for materials and goods as well as the changes in factors like international business environment are some of the challenges affecting the end-to-end supply chain. Anything that halts or reduces the movement of material, as well as the apparel and luxury goods, are considered a problem to the supply chain (K3SoftwareSolutions, 2017).

Outsourcing Benefits

Apparel and luxury companies have been able to expand their supply chain to many different countries and migrating to outsource manufacturing which has seen reduction in the cost of production. This strategy has promoted division of labor throughout the end-to-end supply chain by allowing company to concentrate on principal business undertakings. The organization is allowed to concentrate on its core competencies while specialist suppliers are given non-core undertakings (Handfield, 2017).

Suppliers who can carry out the processes more efficiently are tasked with this role and therefore outsourcing in low cost countries helps make the supply chain more effective. International brands have been allowed to create a completely responsive supply chains as well as bringing apparel and luxury products of low price to the shelves of stores (Handfield, 2017). Low priced goods are as a result of using external company’s expertise, knowledge and links to make cost-effective plans. Besides, time is economized since the time taken in designing, and delivering new clothes and luxury products to the market has been reduced from over a year to only a few weeks (Handfield, 2017).

Through outsourcing in low-cost countries, companies have been able to achieve effective processes, low-priced goods, and consumer satisfaction leading to outstanding performance and strategic advantage. Supply chain also becomes more flexible as the company has freedom to choose who they can do business with. Also, outsourcing enables the end-to-end supply chain of the organization to be more traceable (Robinson, and Hsieh, 2016).

Outsourcing-Low-Cost-Countries
Outsourcing-Low-Cost-Countries

Outsourcing Risks

Despite the benefits, an organization exposes their brands to great risks through outsourcing because it becomes a supply chain against supply chain. When going after cheap labor, apparel and luxury companies have been putting immense pressure on the suppliers who in turn are ready to reduce their invested capital to have low costs (Handfield, 2017). So as to compete with other businesses in the low-cost countries, suppliers forwent investments and labor practices that reduces the safety standards in a company and this is likely to damage the brand image of the apparel.

Poor working conditions in the apparel and luxury industry so as to maintain common local codes in low-cost countries is a disadvantage to the supply chain (Handfield, 2017). Another challenge to the supply chain is the abroad manufacturing delays. Apparel and luxury stores that are in western countries are progressively relying on the clothes and accessories from countries like China. Most newcomers to the industry may be found off guard by the delayed manufacturer (K3SoftwareSolutions, 2017). Moreover, damaged shipments and some that get lost is another menace to the apparel and luxury industry. Possible unseen costs such as inflated shipping price can result.

Besides, there are possible setbacks to the supply chain for instance late receiving of inventory leading to consumer dissatisfaction, loss of income and problems in the end-to-end supply chain. Problems may also arise during integration of the two Apparel and luxury companies affecting supply chain. If the hired company economize, use cheap materials or even fail to assess risk fully, the supply chain will be affected due to decreased sales and brand equity (Meeken, 2013).

Conclusion

Outsourcing in low-cost countries helps Apparel and luxury companies be more efficient in their operations because they concentrate of core competencies and they can produce cheaper clothes and accessories as well as satisfying consumers, therefore, affecting supply chain positively. However, there are risks involved such as pressuring suppliers to reduce investment capital to keep low costs. More so, companies adopt common local standards which can ruin the brand image and problems in the hired company can also affect the organization negatively.

References

Handfield, R. (2017, August 23). Needed: A New Way to Manage Risk in Low Cost Countries. Supply Chain Resource Cooperative.

K3 Software Solutions, (2017, December 8). Supply Chain Challenges in Apparel Industry and How You Can Fix Them. Fashion ERP.

Meeken, Z. (2013, June 13). The Risks and Benefits of Outsourcing Supply Chain Management. Business.org.

Pickles J, Plank L, Staritz C, Glasmeier A (2015) Trade policy and regionalisms in global clothing production networks. Camb J Reg, Econ Soc 8(3):381–402

Robinson, P. K., & Hsieh, L. (2016). Reshoring: a strategic renewal of luxury clothing supply chains. Operations Management Research, 9(3-4), 89-101.

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Huawei Operations Management Concepts

Huawei Operations Management Concepts and Practices and their Application in Real Business

Huawei – Operations management has been expanding to a broader notion of service and production management hence signifying the principalities of operations management concept in the transformation of raw materials to finished good ready for delivery to the consumer. The increasing recognisability and importance of operations management in organisations have led to growth and exploration of techniques and concepts fundamental in production and service delivery. Therefore, the effectiveness and efficiency of operations and service delivery in organizations are determined by how well they apply operations management concepts and practices in their endeavor.

Operations management scope ranges across various enterprises where people are involved in production and service delivery activities such as product and service design, technology selection and management, system design, process selection, quality improvement etc. (Kunchala). These concepts and functions entail many interrelated activities including scheduling, quality assurance, inventory management, capacity planning etc. fashioned toward effective and efficient production and delivery of goods and services.

Huawei Technologies Corporation, being among the leaders in the production and sale of mobile devices, they need to maintain a high-end operations management through the application of the latest and best operations concept in operations management. Besides, various factors necessitate the organization to facilitate streamline operations management. These factors include the quantity and quality of production, market diversity, change in technologies, competition, and the ecosystem.

Huawei, for instance, is inculcating the user-centric operation initiative which is aimed at digitizing their product while improving quality and user experience. This, therefore, entails the use of market research in their quest to deliver quality products which are user-friendly and well-paced with trend and technology (Huawei). Since the organisation uses make to deliver production approach, their market research should involve an in-depth analysis of the consumer preference and inculcate them during the planning, design, and production of various products.

The organization applies a generic and multistep product development process where they are technologies pushed product and platform products. For instance, the production of the Huawei GR5 product was a platform product as it was built around the pre-existing technology subsystem of the Huawei GR3. Besides, the Huawei Y series is built along a product platform where they use already pre-existing technology. Due to the overly increasing enormity and complexities due to technologies advancement, Huawei, therefore, enhances management transformation as they resort to a lean operation to accommodate customer requirement to improve production efficiency while controlling costs.

To cope with the competition and rapidly changing technologies, the organization applies the quick-build products which entail the rapid modelling and prototyping. To achieve a seamless and quality production, the organization integrates the operations and management organisation with the resources, platforms, and expertise through centralized processes. (Mingwei, Yaling & Feixiang) This highlights the importance of the effective layout decision within the organization.

Facility layout is essential in the realization of a seamless and lean production process in the Huawei Corporation. This entails determining of the arrangement and placement of workgroups, workstation, departments, inventory etc. to reduce possibilities of waste such as motion, movement, inventory, and quality accruing. It is worth noting that Huawei implements a Quality First strategy as they seek to enhance sustainability in materials and suppliers through performance appraisal.

As a contract manufacturer, Huawei has a high-end procurement decision-making team aimed at strengthening customer and supplier’s sustainability. For instance, the organisation has posited a procurement quota to enhance supplier sustainability hence minimizing the risks in supply while facilitating customer satisfaction hence boosting supply chain a competitive advantage. The organizations evaluate supplier eligibility based on compliance with the established supplier Huawei Supplier Sustainability Agreement, laws and regulations.

Further, the procurement process in Huawei is value oriented which entails adhering to the supplier’s regulations, transparency, and scientific procurement which is aimed at building a seamless and healthy s(secure, reliable, and competitive) supply chain. Besides, to facilitate the procurement process, Huawei facilitates a joint innovative, strategic cooperation with a win-win and benefit sharing process. This is achieved by enabling and encouraging mainstream partners to engage in the initial stages of product research and development to assure supply and competitiveness during the process (Tao).

Huawei Operations Management
Huawei Operations Management

Being a contract manufacturer, the organization needs to outsource various parts and or services and maintain robust industrial relations to enhance operational efficiency and effectiveness. This is critical as it enhances reasonable profit distribution within the industry thus ensuring key partners and suppliers gain sizeable and reasonable profits hence enhancing a success shared, competitive, and sustainable supply chain. A comment by Huawei’s Consumer Business Group chief, Yu Chengdong, “We are laying out plans for all our key smartphone parts. Huawei might not manufacture these components directly, but it does not mean we do not own technology to manufacture them ourselves” indicates the commitment and appreciation by Huawei to outsource their non-core competencies and dwell on competency for efficiency and effectiveness in their operation after the flash memory incident (Tao).

Additionally, while the organization seeks to facilitate lean manufacturing which is eco-friendly and sustainable, the organization should conduct regular value analysis and sensitivity analysis. These analyses are essential as they enhance the better performance while adhering to customers’ requirement. Lastly, Huawei has prioritized quality as the quality control department is fashioned to make the products synonymous with high quality. The objective is Huawei to win on quality through provision of high quality services and products consistent with their requirements.

MI global started operating in an already competitive market across China and the world. Various challenges culminated which had led to the organization to fall to a ‘unicorns’. Initially, the organization faced a slump supply chain associated with the rapid organizational growth which made the organization to retreat from overseas markets. Additionally, Mi had several organizational challenges that critically influenced their operations hence overall performance.

The organization has facilitated their design and manufacturing process through the application of an innovative business model which differentiate itself from other manufacturers at every phase of the customer journey. First, the organization has facilitated the production and development process of their products as depicted by their CEO, Lei Jun as “Mission Impossible.” Their manufacturing process is unique as they do not have a single physical factory as compared to Huawei which indicates a radical shift from the traditional approach in inventory management. This is vital toward the achievement of lean manufacturing as wastes are reduced in the production process. Xiamo’s make to stock production process inculcates customer requirement as depicted by the research and development process (Wang). The organization adopts a different strategy to reach client which entail cloud sourcing and application of social community to create awareness while at the same time gather information from the customers.

Different organizations have varying strategies and operations in their manufacturing and distribution. In comparison with MI, both organizations applied quick bound product development process where sample and prototypes are designed which includes the mix of the shape and the identity of the line design while depended on the outsourcing various components. Therefore, Huawei and Mi can be described as contract manufacturers.

Mi started operating in an already volatile and competitive market which necessitated differentiation. First, the organization MI Global prompted to restructure their operations through the adoption of more seamless and effective operation management practices. For instance, they restructured their smartphone hardware, supply chain, quality management as well as Research and Development initiative. Besides, the marketing of the end product and delivery to the consumer was exclusively online which made it inaccessible to many less tech-savvy clients (Kline). The organization had to implement therefore a unique and multistep production system which was more platforms based to facilitate production and supply. After their fall, the organization has become one of the super houses in tech in China competing with Huawei. In contrast, Huawei’s also invested greatly in research and development but they had a different marketing strategy which was both through outlets and online platforms.

 Besides, the production design and development entail outsourcing of various components including processors, casing, or camera from other organization for profound and seamless manufacturing. This process culminates with detailed quality tests which are critical in value and sensitivity analysis. Each phase of product development is closely monitored, and any mishap is remedied accordingly before mass production and supply of the product to the final consumer.

Additionally, Xiamo has been a market leader in terms of competitive prices on high quality products. This has been enhanced by sustainable and value-based procurement of components facilitated by quality controls and value analysis. For instance, the Mi3 has a Sony Camera with a sharp LG display and Phillips flash. The organization, however, is purposed toward zero inventories as they only manufacture based on orders hence inventory holding cost is automatically reduced. They procure components only when they get orders (Ghong). This has enhanced the effective alignment of their business model and operations hence meteoric rise.

Huawei Strengths

Huawei had various strengths as compared to Mi in terms of and manufacturing and distribution. For instances, their approach on stock-to-order was favourable in term of logistic and inventory management. Mi implemented a zero inventory management practice where they solely depended on customer orders to procure components. Although this method can save a lot of inventory cost, it can be constraint in case of inventory shortage or delays in delivery. In addition, Huawei had a clear procurement and tendering scheme which facilitated the selection of supplier hence facilitated suppliers’ involvement in the manufacturing process.

Adoption and implementation of seamless and profound operation management concept in the production and delivery of goods and services is a blueprint to the organizational success. They main operations management principles and knowledge adopted by the company included; the principle of reality where Huawei didn’t focus only on lean management or total quality management but rather focused on tools and time-based approaches to provide nearly universal successful operations management.

Besides, the principle of organization is clearly highlighted in the case study. Both organizations had organized their production process coherently as manufacturing, marketing, and distribution are interconnected set of processes. Other principles addresses in the study were the principal of variance, change hence the manufacturing and distribution must be bound with struggles with regulations, benefits, and wages to facilitate competitive advantage. Besides, the concept of lean manufacturing and inventory management are greatly highlighted in the Huawei and Mi manufacturing process. Additionally, the quality assurance and research and development are critically addressed. For instance, these principles enhance the process of procurement through manufacturing to delivery of the final product to the customers.

First, the organization is able to achieve or move toward lean production hence facilitating reduction of wastes which in return results in the eco-friendly operation and competitive advantage in the market (Onwuka, Ugwu & Ndife). For example, Xiamo was able to cut the cost of its products through inventory management and quality control initiatives. Reduced inventory costs and effective supply chain strategy enhances more competent, faster, and accessible products (Francis). To sum-up, adoption of operation management concepts and practices will enhance organizational efficiency, effectiveness, quality, lead time, capacity utilization, and cost objectives through value creation and value addition when transforming inputs to outputs.

Works Cited

Feixiang, Mao et al. “Making Manufacturing Productive Again With Iot – Huawei Publications” Huawei, 2018.

Francis, Abey. “Operations Management – Definition, Objectives and Functions”. MBA Knowledge Base, 2018.

Ghong. “Xiaomi: China’S Threat To Apple And Samsung – Technology And Operations Management”. Rctom.Hbs.Org, 2015.

Kline, David. “Behind The Fall And Rise Of China’s Xiaomi”. WIRED, 2017.

Onwuka, Ebele Mary et al. “Evaluation of Operations Management and Its Impact on Improved Logistics Control”. International Journal Of Economics, Commerce And Management, III, no. 5, 2015, pp. 591-602.

Tao, Li. “Huawei To Improve Supply Of All Key Smartphone Components”. South China Morning Post, 2018.

Wang, Lucy. “Xiaomi – Mobile Disruptor from China – Technology And Operations Management”. Rctom.Hbs.Org, 2018.

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Supply Chain Mapping MBA Project

Supply Chain Mapping is crucial to any organisation regardless of its size, specialization or region.  A typical supply chain system is composed of resources, activities that facilitate the movement of products from the supplier to the client and vice versa, i.e., upstream and downstream (Kozlenkova et al., 2015). However, the keeping track of all these supply chain activities, i.e., delivery and supply of necessary materials, information and other elements is getting complicated day by day.

Henceforth, it’s essential for organizations to manage these activities through visualizations which can help in identifying supply risk factors for necessary actions to be taken (Ho et al., 2015). And this is where supply chain mapping comes in handy. Supply chain mapping refers to the use of visual maps in monitoring the activities linking suppliers and customers.  The supply chain map shows how all partners and actions are connected such as supply, transport, warehousing, retailing and so on.

Moreover, a supply chain map takes into account the transactions and information exchanged by all parties, both upstream and downstream (Jayaratane et al., 2018).  Breaking down the composition of the supply chain mapping reveals interesting factors such as how it’s mapped, parts that are included in the map and criteria used to select. This paper thus discusses these elements of supply chain mapping in addition to the implications of various types of integration in the supply chain management.

Supply Chain Mapping Deployment

Mapping is meant to reveal opportunities and obstacles so that an organization can be able to formulate a winning strategy. To do so, a supply chain map has to indicate two crucial components; the supply chain flow and supply chain entity (Dujak, 2017). This can be achieved by following these steps.

Mapping the Physical Structure

An existing supply chain model already has physical locations that contribute to its value stream. These include the warehouses, factories and retail stores that support the movement of products and services upstream. However, the networks that support that these facilities can be at times complex, even for established organizations. For instance, it may be hard determining who supplies to the organization’s suppliers.

Which facilities or methods do suppliers or producers use to ensure that the raw materials are produced legally and ethically? This requires an organization to step up its involvement by in its analysis of supply chain structure.  Nuss et al., (2016) claims that identifying the relevant physical structures during mapping helps in determining the degree centrality of the supply chain.

Degree centrality is used to determine the level of physical sites that a particular organization owns. This, in turn, determines how the level of control they have on the supply chain and associated risks.

Networking Environment and Context Analysis

The environment that a company operates comes in handy in understanding the supply network system that they can tap into.  Rodriguez (2016) claims that this stage of supply chain mapping entails determining four different types of ties: similarities, relations, interactions and flows. These elements affect how a company is perceived by the society that it operates in.

For companies to successfully succeed in this state, they should take into consideration factors such as;

  • Cultural and ethnic differences,
  • The geography covered,
  • Politics and legal systems within the target markets,
  • Expectations of the end users.
  • The environmental protection laws.

A company that understands these factors will experience more success since it will be able to determine the trends, the drivers and conditions that affect the flow of goods and service both upstream and downstream.

An organization should consider any unique factors which present in the supply chain to determine if they are risks, threats or opportunities. This affects how the organization responds (Rodriquez, 2016). For instance, an organization can critically analyze:

  • Whether to standardize or customize the products:
  • The complexity of the products
  • Customer tastes and preferences
  • Bureaucracy and complexity within the organization
  • Cost of switching for customers
  • The degree of Competition in the market.

All of these factors affect the type of supply chain an organization selects. The more complex and customized the products are, the more complex the supply chain will be.

Supply Chain Mapping
Supply Chain Mapping

Considering the Buying Process:

This organization must consider how many hands the raw material or finished product pass through before reaching them or their target client respectively.  For instance, the company should determine if it buys the products directly from the producers, or from brokers and third-party companies.  To do so, a chart is created, showing how the current transactions and exchange of products are carried out in the supply chain. From this, the organization can determine which parties that they can away with to loosen up the supply chain model.

Dujak (2017) claims this part of the analysis can be classified under the extended value supply map. Brokers and re-suppliers can at times be adding no value to the whole production process, especially if the main producers of raw materials are within reach. In addition to hoarding products and inflating prices, brokers may also become unreliable parties when transacting with them. For instance, if products are not delivered on time despite being paid for, should you hold the broker or the producer accountable?

Can you eliminate the broker and purchase directly from the producer or supply directly to the final clients? Analyzing these elements will help determine how to approach non-value adding-component of the supply chain such as bypassing them.

Supply Chain Mapping – Accounting for Transparency of Information 

Mapping a successful supply chain model entails ensuring that the information being passed across the various parties is consistent and credible. For this reason, a company has to define the types of reports that it expects from all the actors in the supply chain. The expectations will be based on the type of contract that an organization has with these parties.

The suppliers should provide information on their production process and their transport mechanisms (Gardner et al., 2015).  Passing information on sample products or services ensures that expected standards have been met before the commercial production start. In this case, the information being passed down or up the stream covers concepts such as order status, product testing and such. There two ways of ensuring consistency information flow, i.e., manually or electronically.

Moreover, each actor should be provided on information about their expected roles and limitations (Gardner et al., 2015). When all these factors are considered, the supply chain mapping will be based on the transparent information. This implies that each of the party will be accountable and responsible for any issues that they are expected to handle. This stage is usually called the current state map.

Should the map include connected firms or primary firms?

The supply chain map mandates that every activity within the supply model must be accounted for. In doing so, the visualization of how the raw materials are produced to how they reach the final customer must be accounted. Henceforth, this takes into account all the primary and secondary activities that facilitates this process. For this reason, it’s essential to include the connected firm in the supply chain map

Means of determining who should be part of the supply chain map

Heat mapping:

This method entails identifying the main company priority regarding the products that it produces. Each activity of the firm is assigned a grade/ colour/size in the order of its overall importance to a company. In doing so, the company can be able to trace the main parties behind such activity. The parties that become part of the supply chain are those whose roles are found to be invaluable to the company, i.e. those whose grades are much higher (Bryan, 2015).  Regarding this, the supplier of a company has a high priority since the raw materials that they provide; facilitate normal running activities within the firm.

The degree of Risk:

Oliveira et al., (2017) claim the supply chain activities are proliferated with operational threats due to uncertainty in business environments. Such threats can lead to immense losses for a firm. For instance, Boeing suffered a loss of $2.25 Billion, while Cisco lost $2.25 Billion due to supply chain problems (Oliveira et al., 2017). Henceforth, when considering who to include in the supply chain, the main question should be if the party selected is ready to partake in the losses due to risks?

Secondly, how can the party help in mitigating risk? How accountable is the party in the organisational objectives? If a party feels the wrath of consequences related to risks and threats, then they should be included in the supply chain map.

Florian et al., (2015) break down this concept by assigning each risk category with the composition of risks that may proliferate it. All of these activities have a domino effect on the whole supply chain, any parties supplying these activities must be included in the supply chain map.

Supplying Risks: Poor quality good, non-delivery of agreed products, inflated prices, delayed delivery schedule.

Transporting Risk: Loss and damage to good when in transit

Warehousing Risks: Spoiling and damage to goods; changes in storage costs and taxes being levied on them.

Marketing Risks: Wrong promotional strategies, excessive, demand volatility.

Production Risk: Equipment failure, overproduction, poor quality outputs (Florian et al., 2015).

From the above, it’s evident that these are high-risk issues that may face an organization. Henceforth, an organization should monitor all activities carried out by these parties to ensure everything goes as planned. Moreover, when an issue arises, it can be easy for the organization to track through the use of an already established supply chain map. Henceforth, under this criteria, the supplier, the transporters, warehousing companies and marketing agencies must be included in the supply chain map.

Benchmarking

If a company wants to have a successful supply chain, it must study its competitors or other companies who have established a successful supply chain model. This is where benchmarking comes in handy where a company studies the processes, performances and products from the best practices (Routroy et al., 2015).  This strategy helps a company select the right partners for its supply chain model, who are more likely to help it achieve its objectives fast.

Hettiarachchi (2016) claims that Apple Inc. has probably the most successful supply chain strategy due to how it has mastered mapping and visualization technologies in monitoring the movement of all products, both upstream and downstream. Once the company has benchmarked other companies supply chain maps, it then decides on how it can visualize its map for maximum benefits. The bigger the firm and the more complex its activities, it might find itself integrating even the secondary parties to the map, just like Apple Inc does (Hettiarachchi, 2016). On the other hand, if the company activities are just simple and use basic raw materials, its supply chain map should include the basic parties, i.e. supplier, warehouses, the firm, and the retailers.

The Importer-Exporter Criteria

The Importer (Buyer):  This is a connected firm who supplies to the organization supplier. The importer is usually the source of goods within that region if he got them from the foreign nations. The importer negotiates purchase terms with the main supplier, which affects the final price of the raw materials when the reach a firm.  This party offloads and inspects the shipment to ensure that all the products that had been ordered are in place. This importer is categorized as a source to pay (S2P) within the supply chain map.

Supplier (Exporter):  Usually categorized as an Order-to-Cash Component in the Supply chain map.  The exporter receives the purchase order from company clients and validates their credentials.  After confirming the order, they fulfill their services by shipping the goods to the clients. He then collects the payment from the clients and reconciles them for analysis. The reason the exporter is accounted for in the Supply chain map is that he can help a company determine the level of demand from customers. The exporter is a connected firm within the supply chain model.

Exporter (Supplier):  This type of exporter falls under the connected firm category and is a Fulfill-to service component.  This supplier is in charge of fulfilling the order of all the raw materials scheduled for production. The exporter procures materials from their direct sources and delivers them to the company for processing. This type of exporter is placed in the Fulfill-to-service component.

Implications of a Good Supply Chain Management Practice

Vertical Structure:

More Control: Under this arrangement, the company control major activities within its supply chain, e.g. Apple Inc.  As a result, the company can make amendments or any changes in the supply chain with minimal tussles (McCandless et al., 2015). For instance, when a manufacturer acquires its product retailers, he can be able to dictate the prices of all the products, just like he would if he were to acquire the supplier. As a result, they may have more bargaining company than the customers’ especially if there are no alternatives.

Differentiation:  Having more control over the distribution channels, retails outlets, production materials inputs can enable a company to distinguish itself from competitors. Consumers may be able to notice these differences which can be leveraged upon further by clever marketing tactics.

Higher Profit and Revenue margins: Upstream and Downstream markets such as selling products to the customers or accessing raw materials directly from the source may become new sources of revenues.  For instance, a company can also supply raw materials or provide transport and warehouse facilities to other companies on a fees basis. Moreover, having access to these elements eliminates middlemen and intermediaries who usually hike the prices by the time the products are reaching the company or end users. Henceforth, eliminating these intermediaries implies all these profits they were enjoying will be redirected to the firm.

Higher Level of Certainty: Florian et al., (2015) claimed that the more the parties involved in the supply chain, the higher the risks due to reduced control the company may have in overseeing all the activities. With vertical integration, all the acquired companies are acting as subsidiaries to the main company; hence it may be easy to standardize products and regulate their quality. This implies that a company is guaranteed of quality raw materials, quality freight and transport, warehousing and even retailing of goods.

Supply Chain Mapping Horizontal Integration

Market Expansion: Horizontal integration refers to the process of acquiring business activities that are at the same level. For instance, a fast-food company can try to gain a footing in another country by merging with another fast-food company in that nation. This enables a company to have a larger market share, which in turn leads to more revenues and profits for a company.  The supply chain model also becomes flexible and loosens up, since they can experiment with different supplier simultaneously to determine the best one.

Industry Control: the merging of two similar businesses implies that their bargaining power also increases. As a result, they can use this power to set the market prices for their products, set standards for customers as well as dictate the quality they expect from their suppliers and prices.

This is an immense power which may lead to more third-party vendors focusing more on such companies due to being assured of continuous contracts and high demand for their goods.

Economies of Scale: An integrated company will be able to order quantity raw materials, engage in more productive activities at a much lower cost than if it were ordering low quantity products.  This may in turn, lead to bigger profit margins and optimal use of all the facilities within the company.

Increased Differentiation: if the company continues acquiring and merging with businesses along with all lines it operates in, it can have more control over the features of its products.  For instance, the products may be either cheaper, high quality, long lasting in a way that other companies which have not integrated themselves cannot replicate.

Focal Company:

Better relations with consumers: Under this structure, the company has a direct contract with the end users (Wang et al., 2016). This may help the company gain more trust and loyalty, leading to repeat sales from customers.

Better insight for better marketing and product strategies: The company taps to first-hand information from clients from matters about complains, suggestions that they may have on the type of services provided. The company may use this information to re-align and strategize itself so that it meets their demand or needs adequately.

Increased Accountability of suppliers and distributors: Since the company has contact with the end user, it may also provide guidelines that their vendors should follow to provide the best quality services and products for their customers. This may lead to the company monitoring the activities within the supply chain more closely than with other forms of integration (Wang et al., 2016). This may lead to a domino effect where the suppliers and other service providers to the company are also more keen, leading to quality products in the end.

In conclusion, it’s evident that supply chain mapping is very crucial for companies. It supports information distribution, shows channel dynamics and enhances strategic planning process for an organization. This enables the company can track all activities.  It helps companies get more insight on all activities that are crucial to its functioning, be it upstream or downstream.

How can a supply chain mapping be successful? Well, the answer lies in who is the parties that are included in the map, criteria used to select them and their contribution to overall organizational goals It’s also worth noting that the supply chain map will be dependent on the type of integration that a company uses in its acquisition and delivery of goods/services, both upstream and downstream.

References

Dujak, D. (2017, January). Mapping of natural gas supply chains: Literature Review. In 17th International Scientific Conference Business Logistics in Modern Management 2017.

Florian, G. L., & Constangioara, A. (2014). The impact of risks in supply chain on organizational performances: evidence from Romania. Series Economy Management17(2), 265-275.

Gardner, T. A., Benzie, M., Börner, J., Dawkins, E., Fick, S., Garrett, R., … & Mardas, N. (2018). Transparency and sustainability in global commodity supply chains. World Development.

Hettiarachchi, H. (2016). Apple’s Supply Chain Strategy. 10.13140/RG.2.2.32075.49448.

Ho, W., Zheng, T., Yildiz, H., & Talluri, S. (2015). Supply chain risk management: a literature review. International Journal of Production Research53(16), 5031-5069.

Jayaratne, P., Styger, L., & Perera, N. (2018). Role Of Supply Chain Mapping In Sustainable Supply Chain Management. 2nd International Conference on Management Proceeding.

Kozlenkova, I., Hult, T., Lund, D., Mena, J.,  & Kekec, P. (2015). The Role of Marketing Channels in Supply Chain Management. Journal of Retailing. 91. 10.1016/j.jretai.2015.03.003.

Bryan, C. (2015). Handbook of Research on Global Supply Chain Management. IGI Global. ISBN-10: 1466696397

Mccandless, E., Abitbol, E., & Donais, T. (2015). Vertical integration: A dynamic practice promoting transformative peacebuilding. Journal of Peacebuilidng and Development. 10(1).

Nuss, P., Graedel, T. E., Alonso, E., & Carroll, A. (2016). Mapping supply chain risk by network analysis of product platforms. Sustainable Materials and Technologies10, 14-22.

Oliveira, U.R., Espindolar, L.S & Marims, S.F (2017). Analysis of supply chain risk management researches.

Rodríguez, R. R. (2016). Social network analysis and supply chain management. International Journal of Production Management and Engineering (IJPME)4(1), 35-40.

Routroy, S., & Shankar, A. (2015). A benchmarking approach for supply chain risk management. International Journal of Services and Operations Management20(3), 338-357.

Supply Chain Mapping Protocol. (2017).  Supply Chain Sustainability. Version 1.

Wang, X. & Wood, L.C. (2016). The Influence of Supply Chain Sustainability Practices of Suppliers.

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