MANAGING SUSTAINABLE GLOBAL VALUE CHAINS ASSIGNMENT SAMPLE
1. Introduction
The report describes “global value chains”, which manage sustainability in the global market and help in creating an innovative design of a product. Value chains emphasize innovation to think about creating value for customers, companies, and enterprises in a sustainable way. The “supply chain management” has a lot of challenges like equipment unavailability, lack of knowledge, labour shortage, costing, and quality control. The report has chosen a challenge as “lack of knowledge in managing sustainability in global value chains” of the retail industry in the UK. “Global supply chain” creates many sustainability opportunities in the UK retail industry by increasing efficiency in operational resources and managing supply chain.
The flexibility component in the global value chain is necessary to improve corporate responsibility and supply chain performance in the UK retail industry. Proper maintenance of Value chains helps to make affordable business, reliable supply, and permission from investors, consumers and improve “sustainable performance”. The supply chain guides the retail industry in reducing global impact, social cost, and fulfilling consumers’ demands. The components of the “global value chain” are “design, production, marketing, distribution, and support to the final customer”. The value chain benefits the retail industry with economic growth, sustainable product selling, lower resource intensity, and builds a positive impact on society.
2. Academic literature review
2.1 Sustainability opportunities of the UK retail industry in a “global supply chain”
The “global supply chain” of the UK retail industry creates sustainability opportunities and manages the distribution of goods from manufacturer to customer. The UK retail industry faces many problems in managing the supply chain like cost optimization, poor knowledge, unreliable logistics, labour shortage, employee turnover, and others. The supply chain helps to remain competitive in the global market and create value for customers, and products, and ensure the fulfilment of consumers (Ollivier De Leth and Ros-Tonen, 2022). Retail companies struggle to keep competitiveness in the market due to the increase in customers’ expectations and changes in market trends. “Digital supply networks” enhance the capabilities of the “global supply chain” in the retail industry and fulfil customer-driven experiences in shopping. This provides opportunities to achieve competitiveness, earn profitable growth, build a brand image and develop services.
The risk possibilities are increasing in the UK retail industry and the backbone of the industry, supply chain supports to mitigate risks in international retailing. The processes and strategies in the supply chain help to manage supply, raw material, and labour for the production and distribution of products (Oubrahim et al. 2022). Restructuring of the global supply chain can help to achieve huge economies and increase the efficiency of working through cost reduction and good savings.
2.2 Critical aspects of sourcing strategy
Figure 1: Benefits of strategic sourcing
(Source: Hadi and Pramuhadi, 2022)
“Sourcing strategy” helps to find the appropriate product from the appropriate suppliers and find possible values, and manage the supply chain in the market. This benefits the retail industry in achieving business goals, mitigating risk factors in the supply chain, and utilizing tools, and platforms effectively in the market (Ruiga et al. 2022). A sourcing strategy is important to manage market conditions, maximize profits, increase productivity, and earn a competitive edge in the market. Strategic sourcing lowers potential risks, identifies possible disruptors, and fosters a good relationship with suppliers. This process is beneficial for continuous improvement in the retail industry and creates a better alignment for fulfilling business objectives and maintaining the sourcing process in a better way (Šafář et al. 2022). This optimizes ideal suppliers for business growth, and expansion and adds the highest value, creating a lower cost for maximizing profit and building a brand image in the UK market.
Figure 2: Cycles of strategic sourcing
(Source: Kourtis et al. 2022)
“Forecast and planning” in strategic sourcing ensure documentation, maintenance of plans, and forecasts for all strategic communities. “Supplier evaluation” provides potential customers, and successfully meets all needs for the commodity. “Strategic sourcing oversight” creates documents for executive sponsorship, client management for development, and proper execution of sourcing strategy (Saptana et al. 2022). “Commodity market analysis” ensures the market is well understood, and the determination of methods for leverage. “Development of Sourcing strategy” ensures well maintenance of sourcing strategy with respect to respective priority. “Execution of sourcing strategy” helps to set minimum requirements for the execution of a plan in strategic sourcing. “Contract Implementation” ensures effective contract of contract owner in the retail industry and maintains appropriate communication for building administration with stakeholders. “Contract management” helps to monitor original documents and company requirements by safekeeping, and tracking all activities. “Construct complaint and utilization” ensures the right utilization and contract compliance. Therefore, a Sourcing strategy is important to gain efficiency, lower supplier risks, boost supplier relationships, and minimize “direct and indirect costs” in the retail industry.
2.3 Issues in managing supply chain
“Global supply chain management” faces several complex challenges like cash flow, language barriers, supply of investors, and others. The primary challenge of the value chain is to satisfy consumers’ demand quicker and make products at an affordable price in the market (Pînzaru et al. 2022). Another challenge of the retail industry in managing its value chain is to maintain quality standards, manage all moving parts and lower waste, and succeed in the present market. “Lead times” is a major challenge due to increasing buyers’ expectations of faster delivery and making a balance effectively between supply and demand. Effective planning is a proper solution to maintain the sudden demand increase and longer delays are another challenge (Hohn and Durach, 2021). Cash flow is a serious problem in the retail industry and it’s becoming complicated due to logistics problems and enhancing expenses.
Quality control is a major issue, it can harm consumers, and therefore, companies need to maintain quality for building sustainable development. Language barriers create problems in managing daily operations and time zones make the communication process difficult. Effective Communication helps to lower workplace conflict, build a good working environment and provide a food output. Fluctuations in exchange rates and “foreign transaction cost” increase the prediction cost and lower the profitability of the organization. Developing countries offer the cheapest labours but efficiency and skilled workers only can help in building sustainability in the retail industry (Xie et al. 2022). The right quality of the product can engage more customers, make customer satisfaction and fulfill needs. The investment in advanced technology can increase productivity, lower risk factors, and improve product quality. Affordable rates, good quality, constant monitoring, good brand value, and economic position can help to keep operations of the retail industry running.
3. Country case
The global supply chain is a process of “goods and services” distribution in global networks for profit maximization and minimization of waste (Mayer and Phillips, 2017). This benefits trans-national organizations by achieving a competitive advantage against their competitors in the market. Implementation of the supply chain helps to specialize global needs in sourcing and manage effectively manufacturing and reduce overhead costs. The present problems in the UK supply chain are material shortage, transport delays, and staff shortage due to the high demand for consumer goods (Gereffi, 2019). Disruptions in the supply chain reduce the capacity of production; enhance the delivery time, and lower tiger customer engagement.
Figure 3: Biggest Challenges faced by Global Supply Chain
(Source: Statista.com, 2022)
This figure shows a 2018 survey, which found challenges by executives in the “global supply chain” where 21.8% of respondents proceed with this above response. “Fluctuating consumer demand” is in 2nd position with 19.7% in 2018 and 13.3% in 2017 and data management is in the last position with 1.3% (Statista.com, 2022). The pandemic also affected the supply chain in the UK and created issues in labour supply and “difficulty in filling vacancies” in the organizations. Goods shortage is an acute problem affecting the overall productivity and profit maximization (Nikolakis et al. 2018). Only the UK is not experiencing a material workers shortage, this is seen globally and it leads to a rise in price. The imbalance in public demand and disrupted supply create higher costs in transportation and production, which affects the manufacturing process.
Figure 4: Supply chain management in the UK
(Source: Statista.com, 2022)
This figure shows the efficiency of supply chain management in the UK, where manufacturing is in the top position with 4.04 billion GBP. The efficiency of local government’s Supply chain management is in the last position with 0.97 billion GBP, while telecommunications is in the 2nd position with 1.46 billion GBP in benefits (Statista.com, 2022). Inflationary pressure for companies is a global issue in managing the supply chain and it raises concerns about living costs and price inflation. The industry leaders take effective initiatives to mitigate issues and it needs better coordination with the government (Ponte, 2022). Strategic planning can encourage investment in the supply chain and better training can improve the skills of workers.
4. Industry case
Supply chain issues are becoming a global challenge for UK retailers and these issues can hinder the recovery of the retail sector. The United Kingdom can take 12 to 18 months to return to normal after the pandemic affected the world and the global supply chain (Heron et al. 2018). The crisis and problems create an opportunity for the retail industry to restructure its operations and keep the focus on “localization and automation” in the UK. Other reasons for disruption in the UK value chain are “Brexit and HGV driver shortage”, which became a considerable headache in the supply chain of the UK retail industry (Schmitt et al. 2018). The global retail business was struggling due to the pandemic by manufacturing closures, port, and pent-up customers’ demands in the global market.
Figure 5: Annual sales in the UK retail industry
(Source: Statista.com, 2022)
This figure shows the value of retail sales in the UK from 2009 to 2021, where 2021 annual sales were the highest at 465.248 million GBP and in 2009 it was the lowest. Brexit explains the challenges of the UK supply chain and the lowering of European workers negatively impacts the logistics of the retail industry. The pandemic created a significant increase in the demands for goods, energy, products, labour, and transport. Structural changes impact the overall growth of the UK retail industry in the “worst possible time”. RTT members help to increase retailers’ performance and mitigate the current crisis (Yang. and Yan, 2020). The crisis in the value chain of the UK retail industry stimulates the manufacturing process and emphasizes the “localized supply chain”.
Figure 6: Retail trade in the UK
(Source: Statista.com, 2022)
This figure shows the UK retail trade, which earned 92 billion British pounds in 2019, and the leading retailer company is Tesco. The total value of UK retail industries’ sales is 465.25 billion GBP and the annual percentage of retail sales is 7.8% (Statista.com, 2022). The retail sector in the UK needs to invest money, and time to make the retailing business an attractive proposition and develop more career options for employees. The Development of skills for the manufacturing process can help to kill the workforce in the retail industry. Cheaper overseas labour in the UK retail industry helps to earn more profit and lower the production cost by enhancing productivity (Dallas et al. 2019). Inflation and uprising of energy bills in the UK hit the confidence of consumers and create high demand during festive seasons.
5. Conclusion and recommendation
Recommendations
“Global value chain has a lot of issues like labour shortages, the impact of global bottlenecks, equipment ability and lack of knowledge”. The Retail industry should focus on mitigation of risk factors in the value chain to improve services and enhance customers’ engagement. Lowering the transportation and production costs and enhancing priority to public health can help to fulfil customers’ desires and get goods at affordable prices. The industry should recruit more effectively and provide better opportunities to mitigate the labour shortage problems. The management should train employees in a better way to make them skilled and enhance their knowledge in value chain management. Fighting practices of anti-competitive can help to encourage domestic production and mitigate all possible implications. Mitigation of the Retail industry’s geopolitical tension can help to improve the supply chain, enhance capabilities and engage more suppliers. Therefore, the recommendations in the study are very important to create efficiency in production, and management for achieving sustainable development.
Conclusion
The study concludes the value chains are global to make sustainable development in the retail industry of the UK and contribute to the country’s economy. The study is very important to fulfil the future trends, and customer demands, and mitigate issues in the “global value chain”. The study is beneficial for the leaders of the UK retail industry to maintain the value chain effectively, operational activities, service distribution, and run business in the global market. The value chain enhances competitiveness, creativity, and productivity and benefits entrepreneurs to achieve success in the retail industry. “Global value chain” helps to improve infrastructure and business environment, maintain foreign trade and straighten trade and facilitate measures. This is significant to gain productivity, and improve manufacturing and it plays an important role in generating growth. Automation is the key area to reducing the Retail industry’s reliance to enhance productive activities.
References
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Ollivier De Leth, D. And Ros-Tonen, M., 2022. Creating Shared Value Through an Inclusive Development Lens: A Case Study of a CSV Strategy in Ghana’s Cocoa Sector: JBE. Journal of Business Ethics, 178(2), pp. 339-354.
Oubrahim, I., Sefiani, N. And Happonen, A., 2022. SUPPLY CHAIN PERFORMANCE EVALUATION MODELS: A LITERATURE REVIEW. Acta Logistica, 9(2), pp. 207-221.
Ruiga, I.R., Vasilyeva, Z.A., Kovzunova, E.S., Durnovo, N.A. And Danilova, N.N., 2022. Sustainable cluster interaction models of agro-industrial sector’s subjects in the Russian Federation regions: food security. IOP Conference Series.Earth and Environmental Science, 981(2), pp. 022086.
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Saptana, Apri, L.S., Perwita, A.D., Sayaka, B., Gunawan, E., Syahrul, G.S., Nur, Q.H., Yusuf, Sumaryanto, Yufdy, M.P., Mardianto, S. And Atika, D.P., 2022. Analysis of competitive and comparative advantages of potato production in Indonesia. PLoS One, 17(2),.
Xie, R., Huang, H., Zhang, Y. And Yu, P., 2022. Coupling relationship between cold chain logistics and economic development: A investigation from China. PLoS One, 17(2),.
Hohn, M.M. And Durach, C.F., 2021. Additive manufacturing in the apparel supply chain — impact on supply chain governance and social sustainability. International Journal of Operations & Production Management, 41(7), pp. 1035-1059.
Pînzaru, F., Dima, A.M., Zbuchea, A. And Vereş, Z., 2022. ADOPTING SUSTAINABILITY AND DIGITAL TRANSFORMATION IN BUSINESS IN ROMANIA: A MULTIFACETED APPROACH IN THE CONTEXT OF THE JUST TRANSITION. Amfiteatru Economic, 24(59), pp. 28-45.
Mayer, F.W. and Phillips, N., 2017. Outsourcing governance: States and the politics of a ‘global value chain world’. New political economy, 22(2), pp.134-152.
Nikolakis, W., John, L. and Krishnan, H., 2018. How blockchain can shape sustainable global value chains: An Evidence, Verifiability, and Enforceability (EVE) Framework. Sustainability, 10(11), p.3926.
Ponte, S., 2022. The hidden costs of environmental upgrading in global value chains. Review of International Political Economy, 29(3), pp.818-843
Gereffi, G., 2019. Economic upgrading in global value chains. Handbook on global value chains
Heron, T., Prado, P. and West, C., 2018. Global value chains and the governance of ‘embedded’food commodities: the case of soy. Global Policy, 9, pp.29-37.
Schmitt, E., Dominique, B. and Six, J., 2018. Assessing the degree of localness of food value chains. Agroecology and Sustainable Food Systems, 42(5), pp.573-598.
Yang, T.K. and Yan, M.R., 2020. The corporate shared value for sustainable development: An ecosystem perspective. Sustainability, 12(6), p.2348.
Dallas, M.P., Ponte, S. and Sturgeon, T.J., 2019. Power in global value chains. Review of International Political Economy, 26(4), pp.666-694.
Websites
Statista.com, Annual sales value of all retailing in Great Britain from 2005 to 2021, viewed on 10/08/2022, https://www.statista.com/statistics/287912/retail-total-annual-sales-value-great-britain/
Statista.com, Supply chain management efficiency benefits as a result of the Internet of Things (IoT) in the United Kingdom (UK) from 2015 to 2020, by industry, viewed on 10/08/2022, https://www.statista.com/statistics/608357/iot-supply-chain-management-efficiency-benefits-uk/
Statista.com, What is the biggest challenge you are facing in your supply chain, viewed on 10/08/2022, https://www.statista.com/statistics/829634/biggest-challenges-supply-chain/
Statista.com, Retail trade in the UK – statistics & facts, viewed on 10/08/2022, https://www.statista.com/topics/8671/retail-trade-in-the-uk/#dossierKeyfigures
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