B07667 OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Introduction
Operations and supply chain management is the primary process to improve their productivity level and business operation in the existing marketplace. Thus, this report will focus on three supply chains of Amazon, British Airways and Lego respectively to produce this report while analysing key strategic and operational issues faced by the businesses. Furthermore, the entire report will suggest few recommendations for improved supply chain management while having a comparison between them as well.
Discussion and analysis
Description of organisations and its business context
Amazon is a multinational technology company, which has focused on e-commerce, digital marketing along with retailing all of the products and services of different brands (Amazon, 2022). Due to the extensive focus on innovation, the organisation has been attaining high revenue as reflected in the figure below.
Figure 1: Amazon’s revenue
(Source: Statista, 2022)
In terms of British Airways, the organisation is a UK based transport carrier, which has a fleet size of 257 along with having annual revenue of £13.020 million (British Airways, 2022). The business context of British Airways is to offer a full service airline with reasonably low fares. Apart from this, they are also focusing on carbon net zero by 2050 in order to offer a sustainable initiative (British Airways, 2022). On the other hand, Lego is a line of plastic construction toy organisations with a process of continuous innovation and creativity towards its respective consumers (Lego, 2022).
Figure 2: Growing brand value
(Source: Toybook, 2018)
From growing brand value of the organisation, Lego is able to improve the business context while focusing their vision on corporate goals along with offering the best possible fun elements to its customers (Lego, 2022).
Analysing each supply chains
Amazon
The supply chain of Amazon is mainly focused on two main elements which drive the organisation towards success such as Amazon fulfilment centres and Amazon delivery fleet (Amazon, 2022). It enables Amazon to support different types of customers and adapt to the changes in consumer demand. The first type of supply chain in Amazon is the Amazon delivery fleet, it enables the organisation with the capacity to make room for inventory and fulfil consumers’ orders within a given period of time (Amazon, 2022). Thus, it also relates to all the different transportation and delivery partners that are linked with Amazon to provide superior services to their consumers in the online retail industry.
Figure 3: Supply network of Amazon
(Source: Case study)
The second aspect of the supply chain is the Amazon fulfilment centres which help the organisation to provide superior services such as a two days delivery system to the members of Amazon prime (Zhang et al. 2019). However, Amazon is linked with several alternative suppliers in the supply chain system which enables them to provide the consumers with the preferable products that they demand. Hence, this supplier provides the ability for the consumers to have affordable pricing options based on a particular product in the market (Rikap, 2022). As per the service delivery system of Amazon, it has been noted that the sellers that are listed on the Amazon website showcases the products in the marketplace by adding item description and ensuring Amazon delivers the product to the end consumers.
British airways
British Airways’ supply chain is concentrated on increasing commercial performance, strengthening the organisation’s technological foundation, and maintaining the necessary standard of customer service quality (Jackson and Tozer, 2020). These supply chain techniques may vary as a result of shifting customer expectations to remain flexible on the global market, manage costs and service quality, boost corporate performance flexibility, and maintain competitiveness. The company that provides sustainable aviation fuel (SAF) is said to be one of the British Airlines’ alternative suppliers (Independent, 2021). As a result, British Airways will be able to reduce operating expenses and become more sustainable thanks to the alternative suppliers. The primary objective of the high-quality services provided by supply chain members of British Airways is to transfer passengers and their belongings in a secure, timely, and comfortable manner. British Airways has adopted the process system of providing superior services to their consumers while keeping the cost low and performance high in the airline transporters market (Chun and Park, 2019). Hence, the organisation utilises transportation such as missionaries to adjust products in the supply chain, cargo lifters, aeroplanes and others.
Lego
The supply chain of Lego is mainly focused on innovations and is constantly changing as per the change in consumer demand and trends. The supply chain of Lego is focused on the toy manufacturing market (Bruzzone et al. 2020). The major product and services that are being supplied by the suppliers to the labour supply chain are majorly plastic that the toys and products are made of. The company focuses on manufacturing Lego bricks, which enables them to provide every type of consumer with the demanded product from Lego. Although, there might be a significant change in their production lines as consumers may not demand Lego bricks and shift to other types of plastic toys manufactured by Lego. There are significant steps that are being taken by Lego into the supply chain system and each of these steps has significance based on their importance (Andersen and Gadde, 2019). The primary step in the supply chain of Lego highlights is to collect the plastic from the suppliers, the second highlight is the moulding of Lego bricks from raw materials, and the third is focused on the packaging process. The fourth stage of the supply chain is focused on the distribution of products to retail stores. Lego has major alternative suppliers all around the globe such as GREINER, GBOX, and many others who provide significant raw materials that are needed for production in their supply chain (Lego, 2022). Lego spontaneously spread products to the distribution centres, which enables them to reach the retail stores (Acimovic et al. 2018). The infrastructure includes the transportation systems, heavy machinery and warehouse for providing the space to store the finished products. The supply chain system of Lego has been efficiently working as they intend to change as per the consumer’s demand and adapt to the latest technologies and innovations.
Recommendations for each supply chain
Amazon
It is recommended that Amazon should focus on more intensive management for efficient supply chain process and operation performance. In terms of effective management Amazon is required to have an expense, which might cost around $300. The benefits with intensive management are increased internal productivity, consistent customer focus along with automatic self service function in operational procedure (Flechsig et al. 2022).
British Airways
It is recommended that British Airways should improve their transparency in their supply chain along with focusing on offering key details while issuing vouchers to its respective customers. In order to abide by transparency measures, British Airways should improve their organisational culture, which does not require expenses, as it needs to be embedded in the workplace. This will bring shared information, productivity in the supply chain along with all over organisational performance stability (Malik et al. 2021).
Lego
It is already known that Lego has faced a huge debt during its initial phase; thus for better business operations, hiring a consultant is recommended which might cost around $2250. This will help the organisation to improve their high expenses in the supply chain along with reduced wastage of an incredibly large range of products.
Comparing the supply chains
Different markets
It has been identified that three of the organisations are operating in different marketplaces where Amazon is from the e-commerce marketplace, British Airways is from the aviation industry and Lego is from the toy industry. The e-commerce supply chain consists of different processes in terms of logistics, raw material, finished products, warehousing, fulfilment along with inventory management as well (Bhattacharya et al. 2020).
However, the supply chain of the aviation industry helps the business operation to save cost along with yielding traffic airlines, cost cutting strategies along with mounting pressure to improve the outsourcing and insourcing effectively (Spieske and Birkel, 2021).
On the other hand, the supply chain of the toy industry needs to be incorporated with regulations that can help in incorporating safety measures along with preventing injuries. The US safety Regulation and Standards (ASTM F963) is found to be the mandatory law in the child toy industry supply chain law, which needs to be abided by most of the toy manufacturers (Buoniconti, 2017).
Competitors
The global e-commerce market is estimated to reach $13 trillion in 2021; however, it is expected to grow at an extensive rate of $55.6 trillion by 2027 with a CAGR of 27.4% (Imarc group, 2022).
Figure 4: Growth of global e-commerce market
(Source: Imarc group, 2022)
From the above figure, it can be understood that the competitiveness in the e-commerce market is growing and the key competitors for Amazon are “Walmart”, “Alibaba”, “Flipkart”, “Jingdong” and many others. Moreover, in terms of the global aviation analytics market it has been investigated that the market is growing at the rate of 11.58% by 2028 with a $4.36 billion market size (Fortune Business Insights, 2022).
Figure 5: Quality score in aviation services
(Source: Comparably, 2022)
In terms of competitors of British Airways, it has been identified that “easyJet”, “Virgin Group”, “Singapore Airlines” and “Cathay Pacific Airways Limited” are the ones (Comparably, 2022). On the other hand, the Toy market size is expected to reach $103.8 billion by 2027, which reflects a high competitiveness in the industry (Allied Market Research, 2022). Moreover, the primary competitors of Lego are “Mattel”, “Hasbro” and “Takara Tomy” (Owler, 2022).
Approaches
From the case study of Amazon, it has been identified that Amazon established a distribution network that is regarded to be one of the most efficient in the world to make sure that goods are delivered rapidly, dependably, and for a minimal price. The company approach has been focused on supply network feasibility as mentioned previously.
Moreover, in terms of British Airways, their approach is to improve through operations and services while influencing best services to their respective consumers. According to the case study, British Airways has intensified its efforts to enhance Heathrow Terminal 5’s operational excellence and customer satisfaction, which can be showcased through their performance compared to other companies.
Figure 6: Operational performance of British Airways
(Source: Case study)
Furthermore, concerning the case study, Lego has improved their focus on operations and supply chain with redefined innovation, reconfigured innovation and adjusted innovation, which specifically focus their approach on customer experience and optimising solution of industry trends.
Challenges
In terms of challenges in the supply chain of e-commerce, aviation industry along with toy markets are facing equality due to the COVID-19 outbreak (Montoya-Torres et al. 2021). In this connection, the main problem with supply chain is found to be shift in demand, structural factors, labour shortages along with highly integration of technology.
Figure 7: Supply chain challenges
(Source: Morgan, 2022)
Furthermore, the supply chain bottleneck is expected to continue due to evolving global factors with new risks and political impact such as port congestion, Russia-Ukraine conflict, air freight restrictions, lockdowns along with disruption in rail freight as well (Morgan, 2022).
Learning for other organisations
From the above comparison and understanding, it can be identified that high innovation in supply chain management is required along with increased transparency that can improve the way the organisations are operating. Therefore, focusing on this all of the organisation Amazon, Lego and British Airways requires to focus on their supply chain attentively with having an efficient management with transparency along with technology integration successfully.
Moreover, numerous organisations can take this report as a professional study where they can improve the focus on supply chain along with identifying possible challenges that are lingering over most of the organisation nowadays. Apart from this, the context of COVID-19 needs to be understood along with the recommendations suggested above. To operate in a market successfully, it is very important to understand rivals’ strategy and their weaknesses, which can be effectively understood through this research.
Conclusion
Based on the overall study, the following report has focused on a brief description of the organisation context with suggesting the requirement of transparency, effective management and consultant. Moreover, the organisation was compared with respect to different markets, competitors, approaches and challenges respectively. The most common challenges, which have been identified, are structural factors, shortage of labour along with global factors such as political wars.
Reference list
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