Essay on "Strategic Logistics Management"

Essay 10 pages (3714 words) Sources: 10 Style: Harvard

[EXCERPT] . . . .

Strategic Logistics Management at Walmart

Major clothing, home product and food retailers such as Walmart, Costco and Marks & Spencer are faced with some daunting challenges in their efforts to keep in touch with changing consumer tastes and preferences in ways that can promote more effective logistical management of their far-flung global resources. In order to gain some new insights into what is involved in this area, this paper provides a review of the relevant literature to develop (a) a listing and corresponding justification of the business strategy tools that could be used to identify the current strategic position of Marks & Spencer based on a case study by Canals (2000) from a logistics perspective; (b) an evaluation of the key strategic approaches to logistics management used in the Marks & Spencer case study; (c) a critical assessment of additional logistics strategy approaches that could have been used to develop existing logistics capabilities; and, (d) an identification and discussion of the management issues caused by implementing a new logistics strategy with consideration for available capital, technical and human resources at Marks & Spencer. Finally, a summary of the research and important findings are presented in the paper's conclusion.

Review and Analysis

List and justify business strategy tools that could be used to identify the current strategic position of the subject company in the chosen paper from a logistics perspective.

A number of business strategy tools are available that can be used to identify the current strategic position of Marks & Spencer, including Six Sigma, balanced scorecard as described by Kaplan and Norton (2001), total quality management (or improvement) and others (Neely 2002). According to Johnson (2006), Six Sigma and other relatively new business strategy tools can be used to help business managers better understand how their products and services provide benefits to their customers, both internal and external, as well as identify opportunities for improving internal business capabilities, all the while using these tools to effectively respond to competitors' initiatives and counter-moves in a timely fashion.

Other business strategy tools include a historical analysis of a company and how it has responded to changes in the marketplace as it pursued its organizational goals, particularly with respect to expansion abroad where different cultures required different business practices (Neuman 2003). In this regard, in his case study, "The firm's history and its effect on the internal context," Jordi Canals (2000) reports that, "The evolution of Marks & Spencer provides some reflections about the role of history in a firm's evolution and growth, in particular, its past policies and the learning ingrained in the firm. A British institution venerated almost as much as the royal family, Marks & Spencer performed impressively for some thirty years. Its shares systematically outperformed the market. To get a job with Marks & Spencer would mean a job for life in one of the most admired European firms" (p. 73).

Despite these valuable corporate attributes, though, the case study quickly makes it clear that there is no "one-size-fits-all" approach to logistical management but the company developed an approach that was appropriate to its needs at the time. As Canals puts it, "At the heart of Marks & Spencer's success there was a unique combination of factors. The first was its culture, kept under constant care from Baker Street, its corporate centre" (p. 73). The organizational culture that was in place at Marls & Spencer during its formative years was responsible in large part for its initial success in growing its domestic market and even its overseas operations to some extent. In this regard, Canals (2000) emphasizes that Marks & Spencer's corporate culture "involved a very effective formal and informal communication flow within the company, a close connection between the corporate centre and the shops, a permanent 'dissatisfaction' and willingness to improve, and an obsession about quality and customer's reaction" (p. 73).

The effectiveness of this original organizational culture in managing Marks & Spencer's logical practices, though, tended to erode as more and more countries and territories were added to the company's operations. Indeed, the company's Web site boasts: "We are one of the UK's leading retailers, with over 21 million people visiting our stores each week. We offer stylish, high quality, great value clothing and home products, as well as outstanding quality foods, responsibly sourced from around 2,000 suppliers globally. We employ over 78,000 people in the UK and abroad, and have over 700 UK stores, plus an expanding international business" (2021, p. 2). The company's international businesses extend to 42 overseas territories, where it seeks to leverage its well established UK-based brand in these foreign markets.

The company also reports that in the UK market, it is the leading provider of womenswear and lingerie, and it continues to grow its market share in menswear, kidswear and home products; the company attributes its impressive growth in this business unit in large part to it is increasing presence online (About us 2012). The clothing and homeware business unit account for almost half (49%) of the company's revenues, with the other 51% being generated by its food retailing operations (About us 2012). In this regard, the company notes that, "The other 51% of our business is in food, where we sell everything from fresh produce and groceries, to partly-prepared meals and ready meals" (About us 2012, p. 2). Clearly, the logistics required to deliver a shirt or dress to market in good order are far different than those required for perishable items such as lettuce or artichokes, but there are other corporate priorities that will affect how its supply chain is managed and how its suppliers are selected, as well as its responses to governmental regulatory requirements concerning carbon emissions and effective waste management practices. For instance, the company reports that, "Now more than ever, we're also known for our green credentials as a result of our five-year eco plan, Plan a, which will see us, amongst other things, become carbon neutral and send no waste to landfill by 2012" (About us 2012). These are ambitious and laudable corporate goals, of course, but the company has experienced its fair share of mishaps and failures over the years in achieving its organizational goals, and these issues are discussed further below.

Evaluate the key strategic approaches to logistics management used in the chosen case study.

The key strategic approach described in the case study involved the use of an all-but-in-name ethnocentristic organizational expansion model to grow the company's business in international markets. To its credit, Marks & Spencer has largely succeeded where many competitors have failed in projecting its operations into new overseas markets by applying an across-the-board approach to its logistics management operations through computer-based networks that facilitate communications between corporate headquarters and the company's overseas operations (Visich, Suhong & Khumawala 2007). These initiatives have also facilitated coordination with the company's thousands of suppliers that are increasingly being held to higher standards dictated by the company (Christopher & Peck 2003). Indeed, corporate leaders such as Marks & Spencer can model the way for others in developing best industry practices, even if the lessons learned are based on failures. For instance, Canals emphasizes that, "In a nutshell, Marks & Spencer's trouble in 1999 shows how history has helped Marks & Spencer's managers develop a sense about key success factors in this business and provided them and the whole company with an incomparable set of learning and knowledge in retailing. but, in a changing world, the factors that history had proved to be so successful seemed to be stopping the firm's progress" (2000, p. 74). In this regard, Canals (2000) reports that, one of the driving forces behind Marks & Spencer's impressive early growth was its use of technology that was controlled in large part by the organizational culture that had been in place since the company's founding, but which ultimately failed to provide the responsiveness needed for effective integration of these systems in ways that could facilitate logistical management. According to Canals, technology at the company:

. . . was covered by a group of people who kept Marks & Spencer in constant contact with its suppliers and maintained contact among the stores. A close network of suppliers had been developed by Marks & Spencer to provide the merchandise needed. This network was in many ways a natural extension of the purchasing department. The integration between Marks & Spencer and its suppliers was backed up by a range of formal and informal, but regular meetings, and a close electronic connection. Marks & Spencer always considered these relationships as long-term commitments. (2000, p. 74)

The historical analysis of the organizational culture in place at Marks & Spencer over time is useful in identifying how complacency and ingrained attitudes can adversely affect the ability of corporate leaders to respond to changes in the marketplace, as well as their efforts to expand their operations into new overseas markets. A different outcome to the company's early failures in expanding its operations abroad might have been avoided… READ MORE

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