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Learning Outcomes to be assessed:
1. CRITICALLY ASSESS THE ROLE OF STRATEGIC SUPPLY CHAIN MANAGEMENT IN ACHIEVING COMPETITIVE ADVANTAGE IN AN INTERNATIONAL SETTING
2. EVALUATE VARIOUS MODELS OF SUPPLY CHAIN STRUCTURES AND RELATIONSHIPS
3. ASSESS THE IMPACT OF GLOBALISATION ON SUPPLY CHAIN MANAGEMENT
The case study:
GreatCar is a privately owned South East Asian company that designs, develops and manufactures three models of car at the budget end of the market. It is the biggest car manufacturer in its own country, which is the seventh largest car market in the world. It has grown organically over the years by increasing sales and also by acquiring smaller local rivals. GreatCar currently has a solid financial position, with turnover of $4 billion and profits of 4%. Although GreatCar has a dominant position in its own country, where most of its profits are earned, it is struggling to compete in a global market of excess capacity, intense competition and low profit margins.
A number of recent threats have arisen and mean that GreatCar needs to take steps to meet them or risk a downturn in its successes. Firstly, a number of large foreign car companies have started to take over local rivals and are threatening GreatCar’s home market position. Secondly, there have been a number of recent labour disputes (including strikes) that have caused production stoppages within GreatCar, and the resolution of these has led to higher wages and other additional employment costs. In addition, the national economy is no longer based on low wages and is rapidly achieving developed country status. Thirdly, GreatCar manufactures all their own vehicles, whilst relying on a number of local suppliers, as well as three (3) key suppliers who are based in the USA. GreatCar has begun experiencing quality and delivery issues, as well as rising prices with their suppliers. The procurement and supply chain function does not have a high status in the organisation and does not work with sophisticated techniques and systems. In addition, decisions are also taken by individual functional departments in isolation and there is a lack of internal collaboration. Finally, GreatCar was at one time ridiculed in the large markets of the West for its cheap and unreliable vehicles. However, great advances have been made over the years in terms of build quality, and the company now enjoys a considerably better reputation for reliability in its domestic market. However, Western consumers still associate GreatCar with its old image and there is a lack of suitable routes to market to try and overcome these challenges. GreatCar has also suffered from outdated models, but this has been overcome to a great extent by investing in research and marketing, and improving product development times.
Recognising the need to respond to these challenges, the management team of GreatCar have engaged a firm of supply chain consultants to advise them how best they should be tackled. You are a consultant for this firm and you have been contracted to provide guidance to GreatCar as per the four (4) questions below.
Question 1 [worth 25% of the total mark for this assignment]:
Critically analyse GreatCar’s current supply chain and propose how it should be structured to achieve its organisational aims.
[Suggested word limit = 500 words]
Question 2 [worth 25% of the total mark for this assignment]:
Critically analyse how the challenges of supply chain integration may be overcome.
Question 3 [worth 25% of the total mark for this assignment]:
Assess how having an international supply chain may affect GreatCar.
Question 4 [worth 25% of the total mark for this assignment]:
Discuss how GreatCar can improve how it deals with its suppliers.