Why and how had the competitive market place for SAB changed in the last five to seven years?

Supply chain management now part of the business vocabulary. The impact of global marketplace drastically changed the landscape of business. Change was rapid and continuous in the 1990s. Doing business in the comfort zone was no longer synonymous with success.

The competitive market place for SAB had changed in the last five to seven years because:


Globalization is the most prevalent factor in the changing business world. This environment manifests itself in opportunities and threats both economically and politically. However there are three important issues or challenges for supply chains of the global economy which are (i) more volatility of supply and demand, (ii) shorter product life cycles, and iii) the blurring of traditional organizational boundaries.

Global economic crisis The latest economic crisis happened because of dropped in US dollar value. It is because most of the foreign countries affected by this situation.

Global economic liberalization

Global network sourcing, manufacturing, marketing and distribution Recently, outsourcing has become the trend for many companies to adopt in order to cut cost of operations, such as Crocs and Toyota that happen to locate their factories in China due to lower labour costs. Whereby India is well-known with their customer service and call center setup.

(2)Technology and information

Technology has made a major impact as a facilitator of change as companies have transformed their processes.

Allow connection Technology has allowed individuals and smaller organizations to connect to the world’s knowledge pools to create various information systems in managing supply chain. For example, the integrated make to stock system, build to order system, and channel assembly.

Information Age Information Age provides new and unrestricted access to the place aspect of business. The access to latest knowledge and information open the opportunity for new comers to compete with multinational companies. The fundamental of Information Age is whoever holds the power of latest information will grow and succeed faster than others.

Warehouse technology Warehouse technology has changed dramatically with computer devices in use from the office space to the forklifts. For instance, warehouse management system (WMS) act as a key part of supply chain and primarily aims to control the movement and the storage of materials within a warehouse and process the associated transaction including shipping, receiving, put away and picking. WMS often utilize automatic identification and data capture technology such as, bar codes scanner, mobile computer, wireless LAN, and RFID (Radio Frequency Identification) to efficiently monitor the flow of the products.

(3)The Empowered Consumer • Impact on logistics is more direct.

• • •

Informed consumers have low tolerance for poor quality in products and services. Changing demographics commands 24/7 service. Increased customer service increases the importance of logistics and supply chains.

(4)Power Shift in the Supply Chain • • • Large retailers more demanding and commanding. Focus upon distribution costs and their impact on “everyday low prices”. Changing logistics and supply chain strategies resulted from shifts in the balance of economic power.

(5)Deregulation • • • • • Changing economic controls empowered creativity and competition. Changes in transportation – fewer or no economic controls over rates and services. Change in financial institutions blurred traditional differences and increased competition. Change in the communications industry also resulted in more competition. Changes in the utility industry allows more competition.

The competitive market place for SAB had changed in the last five to seven years by:

1. Improve warehouse efficiency. 2. Made customer orders quicker and with fewer errors 3. Arranged for more products to be shipped which lead to lower rates and better service

4. Bought technology that reduced cost and improved order fulfilment to

2. What advantages might Central experience in the proposed new venture? Wider pool of information available for business decision and marketing opportunities. Combine different perspectives – eliminate possibility of errors arising out of failure Gain new skills Synergy Opportunity widen on network

3. What issues would SAB and Central face in the proposed new approach? Conflict in making decision Redundant management position Red tape & bureaucracy (kerenah birokrasi) o Longer decision time/process

Conflict of interest Matching customer needs and requirements (Wegman) o Chance to counter back proposal

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