Strategic Logistics Management at Walmart Essay
- Length: 10 pages
- Sources: 10
- Subject: Business
- Type: Essay
- Paper: #39268899
Excerpt from Essay :
Critically assess any additional logistics strategy approaches that could have been used to develop existing logistics capabilities.
The company initially failed to adopt flexible strategic approaches to its logistical needs in its international operations based on longstanding corporate practices and an ingrained organizational culture. According to Canals, "Marks & Spencer's growth was based upon the values and policies that had served it so well for so many years. Its achievements were a springboard for new challenges. However, in 1999 Marks & Spencer was facing challenges that seemed to require approaches that were different from the ones the firm had executed so well in the past" (p. 74). In fact, the company had a lot at stake during these early years as it sought to apply the same approach to logistical management that had proven effective in the past. In thi regard, Canals reports that, "As the British retailer faced the reality of a mature market at home, with stagnating retail sales, it had to reconsider wholeheartedly its timid and so far not very successful -- international expansion" (2000, p. 74).
The research is consistent in describing Marks & Spencer's branding efforts as being highly effective, but the same approaches to marketing were not being matched by responsive logistical management practices to support them. As Canals points out, "Marks & Spencer was overwhelmingly dependent on the home market, and only a few of the international ventures in the retailing industry had been successful. A more aggressive international expansion would mean that some of the experiences, values, and policies that had been so successful in the past in the British market would have to change" (p. 74). Based on the foregoing, in order to overcome these initial challenges to the internationalization of its operations, Canals suggests that there was more involved than just fine-tuning the supply chain, and the changes needed had to begin at the top. According to Canals, "The British retailer would have to forgo some of its most cherished practices to adapt to a new world -- among them its branding 'Buy British', its buying policies, its network of British suppliers, and its strong centralization around the corporate centre at Baker Street" (2000, p. 74).
More importantly, the company was faced with the need to identify better ways to coordinate its supply chain to facilitate the design-to-market process. In this regard, Baker and Bass (2003) report that:
Having greater consistency and control over production realizes savings. The biggest advantage, however, lies in the reduced amount of time it takes to get a design on to the shop floor; the organization can react quickly to the fickleness of pre-teen fashion. Traditionally, this process has taken 28 weeks and [the company] aims to reduce this t 12 weeks. The potential rewards are great as children's wear accounts for about 10% of Marks and Spencer's non-food sales. (p. 155)
This level of consistency, though, does not just fall out of the sky but is rather the result of technological solutions that are used to promote a company's strategic goals for growth, but implementing and sustaining these initiatives over time requires more than seat-of-the-pants management and these issues are discussed further below.
Identify the management issues caused by implementing a new logistics strategy with consideration for available capital, technical and human resources.
According to Baker and Bass (2003), Marks & Spencer was faced with a number of factors when it first expanded its operations abroad. For instance, in its primary domestic market in both clothing and groceries in the UK, the company was confronted with more and more consumers purchasing online, but from suburban and even rural regions of the country, further complicating its logistical operations (Baker & Bass 2003). The company needed to decentralize its operations in some ways, and centralize them in others, but there was little room for experimentation and no room for false starts since customer satisfaction was at stake. With around 78,000 employees, the company possesses the human resources capacity to implement and administer new logistics strategies, but organizations by nature are unwieldy and require time to change.
At present, the company appears to possess the corporate know-how and requisite resources to achieve logistical harmonization along its entire supply chain if it applies the lessons learned from its earlier failures to coordinate its logistical function abroad by taking into account local cultural preferences and business practices as well as the purchasing clout to make its requirements stick. For instance, according to the company's "How we do business" report from 2011, "Marks and Spencer is one of the UK's leading retailers with around 21 million customers visiting our stores every week. We source our products responsibly from 2,000 suppliers around the world. Over 78,000 people work for Marks & Spencer in the UK and in 42 territories overseas, where we have a growing international business" (p. 2). Clearly, the company did not achieve this level of growth without learning from its mistakes, and it is reasonable to suggest that the corporate leadership team will demand a formalized approach to its logistical management function that does not rely on informal long-term commitments from suppliers and the strategic implications of this are discussed further below.
Outline the strategic significance of new technology developments and business trends on future logistic strategies for the chosen case study.
Because a great deal of the company's growth has been attributed to its online presence, the degree to which Marks & Spencer is able to avoid developing an inflexible organizational culture that fails to include all of the company's stakeholders will likely be the degree to which it fails to achieve its organizational goals abroad. In this regard, Canals (2000) suggests that, "Generally speaking, an organization's internal context conditions, shapes, and influences its members' behaviour in various ways. In particular, this context has a significant influence on investment or growth decisions, as we have observed in companies such as Marks & Spencer" (p. 74).
Therefore, the strategic significance of new technology development and business trends on future logistic strategies depends on the ability of the leadership team to coordinate timely responses to changes in the marketplace along its entire supply chain. Fortunately for the company, Canals concludes that even corporate giants can change: "[T]he context not only determines growth decisions, but also an organization's capacity to perceive and tackle opportunities, discover new ideas, turn these ideas into projects, make decisions with respect to these projects, and, finally, implement them. The effects of the internal context, however, are not irreversible, because people are not totally conditioned by the context in the decision-making process, even though it can be very influential" (p. 74). Taken together, the company's succeeded in overcoming these initial challenges to the expansion of its operation abroad by learning from its early failures and applying technological solutions in more informed ways. As Baker and Bass (2003) point out, "Marks & Spencer has made cost savings by changing its traditional relationships with suppliers, eliminating areas of duplication and increasing the speed with which its goods come to market" (p. 155).
The research showed that Marks & Spencer employs about 78,000 people in the United Kingdom and 42 territories abroad, with almost half of its revenues being generated by its home products and clothing business unit, and slightly more than half of its revenues being generated by its retail food operations that include conventional grocery items as well as prepared meal products that are finding a receptive market among the growing middle classes in its overseas markets. The company attributes much of its growth to its effective use of technological solutions to grow its business in these overseas markets, but the research also showed that the process has not been seamless and Marks & Spencer experienced some early failures its applying these solutions to its logistical management needs. Nevertheless, in spite of these early failures, the company appears to have learned some valuable (and expensive) lessons concerning the need to avoid allowing complacency and an ingrained organizational culture to prevent responsive and timely communications with its thousands of suppliers and tens of millions of customers in its increasingly globalized operations.
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