Understand What Makes An Effective Supply Chain Assignment Sample

Introduction Of Understand What Makes An Effective Supply Chain

Supply chain management is the exercise of managing the numerous practices which are necessary to manufacture and provide goods and services to the company's clients. It can include designing, transporting, producing and farming. Supply Chain Management (SCM) first gained traction as a management concept in the 1980s, when academics and manufacturing firms began to show a keen interest in the subject. It seems that there are more definitions of "Supply Chain Management" than there are for "Supply Chain," and it is challenging to obtain a clear meaning of this term. In the context of manufacturing organizations, effective SCM is highly required for ensuring uninterrupted production. For the report, the chosen organization is Volkswagen, which is the world's largest automobile manufacturer and carmaker in Europe. The group includes twelve kinds of brands from seven European countries.

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The report will put light on key supply chain areas of Volkswagen, which can make this strategy efficient currently. The report will emphasize on understanding the idea of an effective supply chain and its real-world applications in the setting of Volkswagen, a well-known global automaker. Due to strong competition, Volkswagen competes in a sector where efficient handling of supply chains is crucial for fulfilling customer demands, simplifying production, and edging out other companies. The aim of this reportis to look at the vital elements of Volkswagen's supply chain and assess the extent to which they contribute to the business's capacity to gain a competitive advantage. Using appropriate instruments and procedures, we will conduct a strategic study to evaluate the manufacturing chain's advantages and disadvantages. . Report also highlights the obstacles that get in the way of the supply chain's effective functioning along with alternatives.

Strengths and weaknesses of the supply chain network of Volkswagen

Volkswagen has the larger supply chain in the world; this has numerous strengths and weaknesses because of it the organization has to face some challenges

Strengths

• Volkswagen has an enormous global expansion, with manufacturing facilities, providers, and delivery systems distributed throughout many different countries (Blanchard, 2021). With their capacity to acquire parts and resources from different locations, they are able to create and distribute goods quickly and effectively while lowering the possibility of disruptions in the supply.
• Volkswagen has a track record of collaborating with numerous distinct suppliers, which ensures a steady and dependable supply of supplies.
• Competent relationship with stakeholders emphasizes on respect for one another and collaboration. This in turn enhances collaboration, assurance of quality, and expense reduction. Volkswagen's supply chain network includes advances in technology.
• To improve the management of stocks, forecasting demand, planning of production, and general supply chain visibility, they utilizethe use of automation, digitization, and information processing. Better judgmentsand flexibility in response to market advances are made available as a result.

Weaknesses

• Volkswagen has come under fire and faced litigation over environmental problems, particularly those regarding emissions from its cars.
• With its efforts to deal with these problems, the company still has to guarantee sustainability through its supply network (Zekhnini, et.al, 2020).
• It includes reducing the adverse impacts of manufacturing processes, transportation operations, or the processing of natural resources on the natural world.
• The organization has a vast supplier network because of this the company has faced failure in the effective management of the quality and status damage and legal effects.
• The company is related to inflexible production and generally follows the centralized model, this can put impact the flexibility and condition of the market.

By doing assessment, it has found that Volkswagen is placing more emphasis on collaborative working practices for ensuring smooth functioning of operations. Further, company has maintained prominent relationship with suppliers in order to ensure competent SCM. In this way, by catering the need of target market organization can get desired level of outcome or success. In addition to this, company should lay more focus on eco-friendly operations. Through this, organization would become able to enhance brand image and market share as well.

Strategic analysis model related to the supply chain

• Numerous countries with clear self-determining and transparent permit Volkswagen to have resources that should be needed which makes the supply chain easier and the organization can invest in new facilities in countries.

• Evaluate the patterns and economic circumstances that may have an effect on Volkswagen's supply network (Monczka, et.al, 2020). In this regard, company needs to make focus on considering factors such as spending trends, inflation, exchange rates and growth in the economy rates. Economic shifts can have an impact on consumer appetite for motor vehicles, manufacturing expenses, and the affordability and availability of transportation and supply chain services.
• Examine what might occur on Volkswagen's supply chain through social and cultural factors. This includes elements like consumer tastes, societal norms, lifestyle developments, and demography, or population For instance; changing buyer tastes for environmentally friendly and sustainable vehicles may force Volkswagen to change the supply chain to adopt environmentally favourableprocesses.
• Assess the environmental factors that could have an impact on Volkswagen's supply chain. This includes elements like environmental laws, environmentally friendly development methods, global warming, and the availability of energy from renewable sources (Wieland, 2021). In order to deal with sustainability issues and adhere to laws and regulations, Volkswagen must take into consideration the adverse effects of its supply chain operations and adopt sustainable procedures.
• Think about how legal as well as regulatory issues may have an effect on Volkswagen's supply chain. This includes things like labour laws, rules regulating the security of goods, trademark rights, and compliance standards. Modifications to regulations could have an effect on the supply chain's broad terms legal and moral environment, relationships with suppliers, and manufacturing procedures.

Supply chain management challenges faced by Volkswagen

Opaque Governance and Threat from China

The profits of Volkswagen halved in 2023 because of the opaque governance and the existing threats from China (Nathen Eddy, 2023). VW's revenues are declining because the company is struggling in gaining traffic from China as there is a fast-growing electric vehicle market.

Electric vehicle market

VW's brands are falling, because of the vast leading market of electric vehicles. A French automotive named Inovev mentioned that VW's sales of electric vehicle batteries have fallen less than the last year (2022).

Covid-19 pandemic

The coronavirus has rapidly changed the demand for services and products in every sector. It had negatively affected the supply chain of VW by exposing its points of weakness and fragility. VW business dimensions like cybersecurity, integration, IT, and governance faced a huge hit due to the pandemic (Remko, 2020.). The delay in the supply of certain parts shows a slowdown and the process of reduction had stopped due to the pandemic. The supply chain of VW had suffered because of the closedown of other factories as well.

Russia- Ukraine war impact

Due to the shortage of raw materials, there is a slowdown in smart technology and automotive electrification. The pandemic had already hit the supply chain and now the war has affected it badly. There is a hit faced by VW in production due to the shortage of EV batteries, catalytic converters and roiling semiconductors. VW has plants in Russia that are made to assemble engines and PVs have been affected the most. Due to the war between Russia and Ukraine, VW faced many constraints on the supply chain related to its component imports (Ngoc, et.al, 2022). The combined monthly sales of VW recorded was almost three quarters more in total of the PV sales accounted in Russia. VW has faced a halt in production due to COVID followed by the war.

Adoption of new technology

Volkswagen is undergoing some important advancements including self-directed driving and electronic automobiles. Accepting new technologies into the supply chain may be extra challenging for the organization. This includes employing data analytics and Connectivity of Things (IoT) abilities, bringing together innovative manufacturing procedures, as well as making sure supplier technology and systems are suitable.

Sustainability and climate regulations

Customers and representatives are placing more importance on the implementation of environmentally conscious and sustainable business practicesby the automobile industry. This involves reducing emissions of carbon dioxide, ensuring responsible raw material sourcing, managing waste and recycling. It can be difficult and constant work to comply with changing environmental standards and implement sustainable practicesthroughout the supply chain.

Confirmation of product quality and safety.

In the motor vehicle sector, maintaining strict quality and security-related demands is essential. Volkswagen could face serious consequences from any quality assurance or safety-related incidents, including remembers, harm to its company, and legal responsibilities (Forbes- Neil Winton, 2023). The administration of high-quality requirements and ensuring the implementation of quality control processes throughout the manufacturing chain continue to pose challenges.

Some suggestions which can be applied to resolve the challenges

Digitalization

Planning, manufacturing, procurement, and logistics are required to create an environment for an autonomous supply chain. To overcome the covid-19 pandemic reduction in supply chain cost is required. This can be done with the help of resilience and strategies that include operational excellence (Allam, Bibri and Sharpe, 2022.). This Can be more beneficial to improve the sale and product quality. Lead times ought to be shortened and efficiency in operations increased. To improve communications and hasten to makechoices, look at the possibility of online communication with vendors and consumers.

Environment protection

Volkswagen can focus on the environmental issues which are occurring by the production of the products (Liadze, et.al, 2023). The organization should focus on the Work alongside manufacturers to ensure that they source ethical materials, cut emissions of carbon dioxide, and promote waste and recycling reduction. Apply measurements as well as reporting systems for tracking and evaluatingsustainability achievements.

Engage with Industry Partners

Form cooperation and collaboration with other automobile manufacturers, trade groups, and colleges and universities to share best practices, access collective expertise, and resolve shared supply chain issues. This may include cooperating on the supply chain adaptability, consistency, and sustainability initiatives.

By using these kinds of suggestions Volkswagen can work better and more effectively. Being focused on the environment can have beneficial effects on the organization and can make it more convenient to work with ease. It can help in improving supply chain management and the challenges. Volkswagen has to periodically evaluate its supply chain strategy and make changes to keep up with evolving marketplace and industry situations.

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Conclusion

By summing up the report, it can be entailed that supply chain management includes all the processes that turn raw materials into completed goods and services. It involves consciously reducing a company's supply-side activities to increase customer value and gain a competitive edge. The supply chain is the organization's "face" that customers and consumers see the most. The better and more efficient supply chain management, the more it will protect a company's reputation and long-term existence. Volkswagen's worldwide operations face several kinds of supply chain management challenges.

These challenges involve managing a complicated network of suppliers, ensuring the quality and safety of goods, correctly forecasting demand, adopting new technologies, conforming to sustainability laws, and monitoring the supply chain risks. Volkswagen is able to solve these challenges and enhance the efficiency of its suppliers by putting its strategic goals and best practices into practice. Volkswagen ought to emphasizeencouraging efforts to promote sustainability, extendthe supplier base, improverisk management methods, embracedigital transformation, encouragecontinual enhancement, and work with industry partners. It should also put a greater focus on strengthening relationships with suppliers. These measures will aid Volkswagen in simplifying its supply chain, improving efficiency, sustainability, and quality as well as increasing its capacity for reacting to market interruptions and developments.

References

Books and Journals

• Allam, Z., Bibri, S. E. and Sharpe, S. A., 2022. The rising impacts of the COVID-19 pandemic and the Russia–Ukraine war: energy transition, climate justice, global inequality, and supply chain disruption.Resources.11(11). p.99.
• Blanchard, D., 2021.Supply chain management best practices. John Wiley & Sons.
• Liadze, I., Macchiarelli, C., Mortimer?Lee, P. and Sanchez Juanino, P., 2023. Economic costs of the Russia?Ukraine war.The World Economy.46(4). pp.874-886.
• Monczka, R. M., Handfield, R. B., Giunipero, L. C. and Patterson, J. L., 2020.Purchasing and supply chain management. Cengage Learning.
• Ngoc, N. M., Viet, D.T., Tien, N. H., Hiep, P. M., Anh, N. T., Anh, L. D. H. and Dung, V.T.P., 2022. Russia-Ukraine war and risks to global supply chains.International Journal of Mechanical Engineering.7(6). pp.633-640.
• Remko, V. H., 2020. Research opportunities for a more resilient post-COVID-19 supply chain–closing the gap between research findings and industry practice.International Journal of Operations & Production Management.40(4). pp.341-355.
• Wieland, A., 2021. Dancing the supply chain: Toward transformative supply chain management.Journal of Supply Chain Management.57(1). pp.58-73.
• Zekhnini, K., Cherrafi, A., Bouhaddou, I., Benghabrit, Y. and Garza-Reyes, J. A., 2020. Supply chain management 4.0: a literature review and research framework.Benchmarking: An International Journal.28(2). pp.465-501.

Online

• Forbes- Neil Winton, 2023. Volkswagen faces a 2023 profit hit, while its biggest challenge is electric. Online. Available through: < https://flipboard.com/article/volkswagen-faces-2023-profit-hit-while-its-biggest-challenge-is-electric/f-8eec2dd0d5%2Fforbes.com> Accessed on 08/07/2023.
• Nathen Eddy, 2023. VW group's 2021 sales fell to the lowest in 10 years on a chip crunch. Online. Available through: < https://europe.autonews.com/automakers/vw-group-s-2021-sales-fell-lowest-10-years-microchip-crunch-porsche-seat-only-brands> Accessed on 08/07/2023.