Global Procurement Change
Discuss About The Integrated Selection A Suppliers Scheduling?
Supply chain management is one of the most important business functions because it manages the supply and exchange of products and services, raw materials and management of inventories from the start to the finish. The management of supply chains at Dubai within the automobile industry has helped in monitoring and executing the supply chain activities easily to create better value of the business, gain competitive advantage and increase supply to meet the demands globally as well (firststop-mea.com 2018). One of the major example is First Stop in United Arab Emirates, which has managed to open over 200 stores worldwide by providing the best quality products and services to the customers and fulfilling the four C’s including convenience, comfort, care and confidence (Christopher 2016). The company has provided high performance services for the cars through products like shock absorbers, air conditioning, brakes and better batteries.
Global procurement is one of the most convenient ways of achieving success in international business. The changes within the organization has been possible by gaining the full potential of international sourcing through capitalization of the best quality suppliers in UAE and other parts of the world. While entering new foreign markets, it has become easy for First Stop to meet the challenges in the international markets and from the competitors (Stadtler 2015).
The exchange goods and services with the suppliers have assisted in making purchases worldwide and setting up new locations everywhere. It is one of the prime causes of First Stop’s success at the present and that is why, it has nearly 20 stores all around in UAE. The selection of international suppliers has helped in enhancing the production level and become the only suppliers of Bridgestone brand tyres and many others including Firestone, Bosch and Total even (Hong and Kwon 2012). The changes has been brought by increasing the range of products including battery, oil, tires and services.
The selection of foreign suppliers has enabled First Stop to gain cost advantage in terms of products and raw materials. The production cost at Dubai is lesser and those are later exported to the foreign countries and sold at higher prices. The foreign countries also exhibit higher amounts of raw materials and resources which can be used to lower the cost during production as well. Because UAE has good trade relations and agreements with other countries, it has become easy for importing and even find a way around various landed costs, thus making the transaction more cost efficient (Yeniyurt, , Henke and Cavusgil 2013).
Justifying the changes
One of the most effective tool that can be by First Store to evaluate the foreign suppliers can be performance indicators through use of metrics and measure whether the needs and requirements can be met by the suppliers or not. The most suitable tools used as performance indicators are FDA approval and the other is fast delivery taken. The low cost shipping and the least damage done during the shipping process are other services provided by the company while sourcing raw materials and heavy machineries (Dekker et al. 2013).
To purchase the inventories and raw materials from the global suppliers, it would be important for the company in UAE to understand the behavior of theirs, which could be possible by understanding their culture and prevent any flaws or misunderstandings which might get in way of the closing deals. By understanding the cultural differences, the company could become more demanding of a foreign supplier in the other country. INCOTERMS measure the responsibilities of both purchaser and seller while managing the customs process and shipping. The risks of transfers and transaction problems between the buyer and seller would be identified easily and resolved. Another useful thing that must be considered while managing selection of global suppliers is the time taken for transporting goods and services (Wisner, Tan and Leong 2014).
The exporting of raw materials and supply chain consisting of manufacturers, logistical services have helped First Stop to overcome barriers of global outsourcing too. By managing export activities and through more investments, the scopes and opportunities have increased for targeting the targeted market segments. By operating with teams all over the world, it has become easy for First Stop to gain market intelligence information and about the export processes. The exporting activities, until now, has immensely benefited First Stop, UAE for the growth in economy of the country as well as enabled the brand to obtain enough resources and skills to produce new products and services (Mangan and Lalwani 2016). There arte tariffs and import quotas that are major trade barriers, still the exporting activities could definitely allow the company to achieve its global objectives and sustain trade surplus too.
The global network management has surely been possible with the huge advancement in technologies, which has improved the abilities to transfer and exchange the resources and result derived from research to the companies’ best practices.
First stop, being focused on fulfilling the major criteria of four C’s, has provided convenience, comfort, care and confidence for the car owners who come to avail the services of the company. To enable proper global network management, it would be essential for selecting the partners wisely and maintain smooth flow of information. It has facilitated the decision making process as well as represented supply chains as networks to optimize the systems and users and ensure successful operations management (Sarkis 2012). The complex networks including shippers, distributors, carriers and retailers and managing the multi tiered financial networks have been managed properly by First Stop, which has further assisted in using social media platforms to engage with more customers and suppliers.
Selection of foreign suppliers
The network theory sis useful for managing the involvement of customers, suppliers and the company itself all throughout the management of supply chain activities. The major factors based on which the supply chain network management is possible has been the selection of foreign suppliers to monitor the competitors and even gain a competitive position. The network theory could not only allow the company to understand when or where to buy or sell and what kind of strategic alliance partners can be selected. Thus, relationships are developed, which are one of the most important aspects of supply chain management network (Chang, Gong and Peng 2012). The network theory also could encompass the competitive position gained by the company and create a better central position within the entire network through creation of stronger relationships with the suppliers. With the implementation of this supply chain network theory, First Stop would be able to achieve better flow and exchange of information, furthermore facilitate the supply chain process. The global network management at First Stop is improved through the manufacturing dispersion for covering the whole areas of local and global production. The domestic approaches followed by the company enabled in managing the production at UAE and then serving the export markets while the regional approaches were beneficial for developing networks in geographical areas including North America, Far East, Europe and South Pacific areas as well (Roberts et al. 2012).
By using these approaches and theories, First Stop has created more facilities, brought more tyre brands including Goodyear, Continental, etc. The cost of transportation was reduced largely and this helped in providing better on road assistance services to the vehicles while the customers make purchases from there (Yeniyurt, Henke and Cavusgil 2013). The network could be improved, which could create better chances for global business expansion and enhanced logistics management and distribution. The Cycle inventory has improved the services related to the receipts of shipments made by suppliers whereas information sharing was possible by scanning the Bar Codes through RF scanner (Qian and Acs 2013). This was done to obtain information about the pattern, size and the tyre’s date of manufacturing to maintain steady customer relationships, online orders and bookings could be now placed, which had made it easy for the customers to make purchases and get the desired services immediately from First Stop, UAE.
The absorptive capacity enabled the company to obtain information from external knowledge sources and innovate the products and services. The information accuracy and performance are responsible for enabling innovation and First Stop has managed to optimize that by exploiting the external knowledge and extracting the best quality information (Chai, Liu and Ngai 2013). Research and developmental activities could be carried out for utilize the information available externally and analyse the market conditions. The information and knowledge absorbed from external sources could also assist the organization to understand the value of those information required for the automation and reorganizing (Sawik 2013). This would enhance the organization’s capability as well as improve the potential of workers through necessary training and development programs.
Tools for International Sourcing
Few recommendations are stated below:
- It is recommended for First Stop to develop more facilities and even establish mini stores in the local gas stations so that the customers could get fuel and at the same time, manage fixing and repairs of the car parts. This would allow for better road assistance and enhance the safety level of the cars for the respective clients.
- First Stop is also recommended to sell other tyre brands including as Continental, Pirelliand, Goodyear, Michelin, etc. for allowing the customers to select among multiple choices of the branded tyres. This would increase the customer base and generate more revenue in business as well.
- Own transport fleet management is recommended for reducing the costs of transportations and ensure successful delivery on time and reaching of products to the customers within less time.
- Another useful recommendation could be the providing of on road assistance, which could make customers more responsive towards the company and cater the needs and requirements of theirs with ease.
Conclusion
Supply chain management ensures production of right product and in the right quantity and then delivered to the right person at the right time. Sometimes, the costs of operations might be increased, which could create problems while producing the products and services and delivering those to the customers on time. The business often could face misunderstandings with the foreign suppliers, which might hinder the exchange and flow of inventories and supply chains and even deteriorate the information and knowledge sharing. First Stop could resolve all these problems during implementation by carrying out proper research and developmental activities for obtaining information from external sources, making purchases from foreign supplier and through management of export activities. It could be a systematic approach to develop skills and promote innovation.
References
Chai, J., Liu, J.N. and Ngai, E.W., 2013. Application of decision-making techniques in supplier selection: A systematic review of literature. Expert Systems with Applications, 40(10), pp.3872-3885.
Chang, Y.Y., Gong, Y. and Peng, M.W., 2012. Expatriate knowledge transfer, subsidiary absorptive capacity, and subsidiary performance. Academy of Management Journal, 55(4), pp.927-948.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dekker, R., Fleischmann, M., Inderfurth, K. and van Wassenhove, L.N. eds., 2013. Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
firststop-mea.com, (2018). [online] Available at: https://www.firststop-mea.com [Accessed 16 Jan. 2018]
Hong, P. and Kwon, H.B., 2012. Emerging issues of procurement management: a review and prospect. International Journal of Procurement Management 4, 5(4), pp.452-469.
Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. John Wiley & Sons.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
Qian, H. and Acs, Z.J., 2013. An absorptive capacity theory of knowledge spillover entrepreneurship. Small Business Economics, 40(2), pp.185-197.
Roberts, N., Galluch, P.S., Dinger, M. and Grover, V., 2012. Absorptive capacity and information systems research: Review, synthesis, and directions for future research. MIS quarterly, 36(2).
Sarkis, J., 2012. A boundaries and flows perspective of green supply chain management. Supply Chain Management: An International Journal, 17(2), pp.202-216.
Sawik, T., 2013. Integrated selection of suppliers and scheduling of customer orders in the presence of supply chain disruption risks. International Journal of Production Research, 51(23-24), pp.7006-7022.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Wisner, J.D., Tan, K.C. and Leong, G.K., 2014. Principles of supply chain management: A balanced approach. Cengage Learning.
Yeniyurt, S., Henke, J.W. and Cavusgil, E., 2013. Integrating global and local procurement for superior supplier working relations. International Business Review, 22(2), pp.351-362.
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