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Global Supply Chain Management

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Instructor’s Name and Title

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Global Supply Chain Management

The supply chain plays an essential role in availing goods and services to people and

organizations in different locations. The global supply chain increases organizations’ profits by

reducing expenses and enhancing expansion into the international markets. Disruption of a single

part of the supply chain interferes with the entire distribution process. For example, economists

and industry experts argue that the current Ukraine-Russia War disrupts the global supply chain

for delivering critical products like oil. The high global population outstretches the services and

products distributed by supply chains through increased demand. In effect, firms face global and

regional challenges in supply chain management. To address the exploding demand by

customers, companies create multi-faceted and compelling supply chains. Supply chain

management is a business strategy for networking suppliers, consumers, and businesses. The

essay analyzes the supply chain networks of Virgin Group, Vodafone, and Etihad Airways and

recommends solutions for improving their SCM strategies on a global scale.

Overview of Global Supply Chain Management

Supply Chain Management (SCM) is a system that allows organizations to source the

resources required to create goods or services and deliver the finished products to consumers

(Heizer et al., 2017). Jaiswal (2021) points out that global SCM integrates and manages supply

chain processes in three subsystems: distribution, suppliers, and manufacturers. To meet these

entities' needs and analyze customers, companies must perform demand forecasting, fulfil orders,

manage inventory, transport and store goods, manufacture goods, and create purchasing or

supplying partnerships. The SCM concept entails storing and moving inventory and finished

goods from the producer to consumers. The end consumers of SCM products rely on the

networks and interlinks in the supply chain that ensure goods and services reach their
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destinations. Chopra and Meindl (2013) inform that SCM entails planning, regulating, designing,

and implementing supply chain actions to increase business net value, harmonize demand with

supply, and evaluate global performance. In the telecommunications industry, supply chain

performance is measured based on effectiveness and efficiency. These sectors’ effective supply

chain indicators are inventory turns, logistics, safety stocks, and control costs such as asset

turnover, outward and inward activities, and warehousing costs. Effective supply chain

performance allows firms to meet long-term and short-term business goals by minimizing

operation costs and generating value (Carter & Rogers, 2008). Global SCM helps firms achieve

and maintain international competitiveness.

Figure 1. The global concept of the supply chain by Smartsheet (2021).

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A green supply chain encompasses sustainable life cycles from raw materials sourcing,

design and testing, production, and product distribution. The factors affecting sustainable supply

chain activities include the environmental factors, the type of suppliers, and purchasing activities

(Cankaya & Sezen, 2019). Green manufacturing enhances supply chain sustainability by using

less energy to produce goods. A sustainable distribution reduces environmental degradation and

minimizes fuel consumption, frequency, and transport distance. Firms can achieve supply chain

efficiency by using green packaging to reduce the weight of products and limiting the release of

harmful wastes to the environment. Some of the factors affecting supply chain management in

the telecommunication and airline sector are suppliers, network configuration, inventory,

environmental factors, distribution strategies, product demand, facilities or technology,

transportation models, the location of the distribution centres, warehouses, and consumers

(Ahmad & Saifudin, 2017). For instance, effective inventory management helps companies

locate the resources needed to distribute goods to various destinations. Efficient management of

these factors and information helps organizations deliver goods to the customers faster and at

lower costs.

The rapid global population growth, innovations, and trade have improved information

technology and transport systems. These developments have increased global organizational

connections and purchasing power. Business organizations consider environmental factors such

as politics, demographic issues, culture, and economics when creating and developing global

supply chains (Greasley, 2013). From a business perspective, these factors can be classified into

operational and collaboration strategies, demand forecasting, inventory and materials

management, global sourcing, logistics, and physical distribution management.

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International logistics is the art of creating and implementing systems that direct the flow

of services and goods and planning and implementing procurement strategies to support the

production and distribution of products to the end consumers. Logistics ensures a smooth flow of

goods by creating value chains. A high logistics integration increases operational profits and

value. An efficient structural relationship between the mediating effects, supply chain

performance, and management improves logistics integration. Before developing logistics for

global SCMs, managers evaluate different nations’ transport and supply systems (Krajewski,

2013). Logistics, directly and indirectly, affect global sourcing and materials management.

Materials management involves procuring inputs and processing components (Gunasekeran,

2000). Global integration of sourcing inputs eliminates boundaries that limit the international

procurement of inputs. International business operations and market forces influence global

sourcing (Mangan et al., 2012). These forces compel companies to lower costs and increase

product quality to achieve a competitive advantage over rivals. Global sourcing provides firms

with goods not available domestically, improves technology, and creates price differentials,

making goods from foreign markets affordable (Kotabe & Murray, 2018). Essentially, global

sourcing is achieved through overseas contract production, global joint ventures, and the

importation of goods from foreign producers (Krajewski, 2013). Physical distribution

management is a downstream part of the supply chain involving inventories, transportation, and

warehousing activities to avail goods and services to the end consumers.

Organizations gain a competitive advantage over their rivals by developing value chains.

Every business organization aims to create value by designing, marketing, manufacturing, and

distributing goods to the end customers at lower costs. A reliable value chain entails procuring

inputs, services, resources, operations, technology development, logistics, human resource

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management, marketing, and support infrastructure services like planning and financing (Skijott-

Larsen, 2007). Global companies create value for their customers by performing these activities.

Figure 2. The concept of the value chain (Business to You, 2018).

Company Description

Virgin Group

Virgin Group is a renowned multinational company based in London, England. Sir

Richard Branson and Powell Nick formed the company in 1970 to provide telephony, music,

vacation, financial, railways, and healthcare services. Virgin is one of the largest U.K-based

firms, with about fifty thousand employees in fifty countries (Muegge & Reid, 2018). Virgin

Group consists of Virgin Holiday, Blue Virgin, Atlantic Virgin, Virgin Mobile, Virgin Green

Fund, Virgin Money, Virgin Balloon Flights, Virgin Festival, and Virgin Galactic. Virgin Mobile

is a wireless telecommunication company with a single communication brand shared by eight

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independent brand licensees globally. The firm, Virgin Group, has outlets in various regions of

the world, such as the United Kingdom, Chile, the United States, Mexico, South Africa,

Columbia, Russia, Saudi Arabia, Canada, The United Arab Emirates (UAE), and Ireland

(Henderson, 2020). Virgin Group is arguably the fastest-growing company globally.

Vodafone

The company is a renowned public limited firm with approximately 315 million clients

globally. The firm has a market capitalization worth $3.5 billion and is based in London (Kresak

et al., 2016). Vodafone operates in the UAE, Africa, Middle East, New Zealand, Qatar, Chile,

Australia, United States, India, Fiji, Brazil, and Europe. Based on this geographical distribution,

Vodafone is a major global communications network. The firm has approximately four hundred

million clients in more than thirty countries. The company provides information technology and

telecommunication services for large corporations. It also deals in smartphones, tablets, and

mobile handsets (Mahmoud & Medina, 2018). Specifically, Vodafone provides integrated

communications solutions in unified communications, network collaborations, and cloud

computing.

Etihad Airways

Etihad Airways is an airline company based in Abu Dhabi, the United States of Emirates

(UAE). The company was formed in 2003 and mainly operated in the UAE. Nevertheless, it later

expanded to Europe, Africa, Asia, and Australia. Etihad Airways has over 1000 destinations

globally for cargo and passenger flights. On approximation, the firm has increased by 20.0%

since 2012, equivalent to $ 40.0 billion in revenue (Etihad Airways, 2021). Etihad Airways is the

leading airline company in the UAE after Emirates Airlines. The firm also invests in equity
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shares in various countries, a strategy that has increased its network strength. Companies like

Lufthansa and Jet Airways supply Etihad Airways with spare parts and aircraft equipment (Rana,

2018). The firm has diversified its services to cater to the needs of passengers and food suppliers

and tries to source airline products to reduce SCM expenses.

Analysis of Supply Chain Management

Virgin Group

Virgin Group’s SCM is based on efficiency and the formation of long-term supply chain

relationships. The company strategizes on strengthening management and supply chain partners

to create a relationship that limits time wastage when sourcing raw materials and distributing

finished products. The firm uses Sand Cone Model to gauge and improve supply chain

performance. The model helps Vodafone decide supply chain objectives bias based on

performance, supplier dependability, quality, speed, reliable distribution routes, and supply chain

cost. The Sandcone SCM model helps Vodafone emphasize quality and constancy. The pioneers

of the model, Ferdows and De Meyer, defined it as a multi-layer model with various facets.

Vodafone uses a primary layer of advancement and preconditions to ensure quality performance

(Stock et al., 2018). As a result, Vodafone enjoys long-lasting relationships with suppliers and

consumers, hence a stable supply chain. Additionally, the model assists the firm in assessing and

improving client satisfaction needs by nurturing responsible and competent employees. The

company has won awards for using the best product outsourcing models and offering the best

customer services globally.

Unlike other telecommunication companies that focus on price, Virgin Group emphasizes

quality and fast supply by globally outsourcing resources and availing them to the local
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representatives. The logistics goals of the firm include competitive marketing, product cost, fair

price, market value, networking, and sales profits. This sourcing approach efficiently meets as it

ensures that goods are dispatched from the local storage points rather than global warehouses.

Virgin Group reduces time wastage in the supply chain and satisfies customers' needs (Estampe

et al., 2017). The company uses regional centres to train local representatives and provide phones

that match consumers' service needs to boost customer satisfaction. Virgin Mobile uses policies

that ensure its supply chains adapt to service and demand changes, such as changing stock and

warehouse strategies. It is important to note that the company uses Supply Chain Networks

(SCN) to effectively compete, create reliable internal structures, and address rapid technology

advancements (Muthee, 2019). For instance, external suppliers and production centres

characterize external suppliers, and production centres characterize the organization's supply

chain structures. The firm's SCM is based on the SCN model and these features. Virgin Mobile’s

SCM is robust, convenient, and increases the demand for its goods.

Virgin Group uses a generic value chain to gain a competitive advantage over its global

competitors. The company distinguishes between support and primary activities and applies

strategies that add value to its SCM. Under primary activities, Virgin’s inbound logistics involve

working with higher-level suppliers to provide quality and long-term products and services.

Virgin’s supply chain operations entail the distribution of high-quality goods to different global

destinations. Additionally, it has websites for all its operations to enhance service and product

delivery to the end consumers (Muthee, 2019).

A good example is an online platform for purchasing trains and airline tickets. Virgin’s

goods and services reach global clients with success and value. Concerning outbound logistics,

the company uses incentives to empower supply chain staff and innovates services and goods
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that satisfy customers’ needs—Virgin partners with researchers and analyses the industry to

improve its supply chain operations. The firm offers competitive prices, which attract consumers

and suppliers from different countries. Under firm infrastructure and global distribution, Virgin

operates in over 30 countries and consists of approximately 300 sub-companies. Virgin's services

and products: financial, airline, music, and computing services get across various industries

(Grant, 2005). This diversification allows it to easily supply its goods and services across

different nations.

Virgin’s value chain uses effective business strategies to implement excellent sales and

services. For instance, it provides premium discounts on flight seats, which increases business

and first-class seat sales. The firm also analyzes load factors to implement competitive prices

that allow them to supply many goods, passengers, and services to various destinations at

affordable costs (Grant, 2005). This strategy helps Virgin maintain a stable global supply chain.

Virgin uses skilled personnel and modern innovations to identify complacencies in its supply

chain and resolve them. High-risk vehicles help Virgin overcome barriers to entry and

competition in the global supply chain. The vehicles have advanced mechanical features to allow

them to distribute goods even to the most remote areas (Sadq, 2016). A decentralized SCM

increases the number and type of goods and services the firm can receive from international

suppliers and distribute to consumers.

Vodafone

The products that Vodafone sells most are mobile phones, marketing information

technology services, and network equipment. Global suppliers are the primary buyers of these

products. Vodafone’s SCM team manages its relationships with global suppliers and provides
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cost benefits using scale and scope strategies. Vodafone uses multi-layered global supply chains

to coordinate various suppliers who rely on other global distributors. The supply chain also

consists of merchant wholesalers and retailers who mediate between Vodafone and customers

(Ibbott, 2017). Vodafone’s supply chain management is based on the One SCM principle, where

different legal entities, collectively called Vodafone Procurement Companies (VPC), procure all

goods and services. These entities verify supplier qualifications and supply chain segments. The

VPC oversees and investigates international suppliers to bolster their operations and capacities.

Through the VPCs, which ensure a steady supply chain administration, Vodafone screens and

improves supplier performance. The One SCM principle enables Vodafone to utilize a

centralized structure to procure and manage its supply chains globally (Kresak et al., 2017). In

addition, it manages supplier performance and procures goods to create competitive focal points.

The organization has implemented efficient SCM systems, relying on policies, not individuals.

Chen and Dawande (2020) reiterate that the company has a supply chain comprising e-sourcing,

e-auctions, category management systems, and analytic tools, which helps create a global supply

chain that provides a higher competitive advantage than the competitors. The firm has a sourcing

structure characterized by a lead warehouse located in Luxembourg and China's sourcing centre.

All products are assembled and sorted in the lead warehouses before distributing to the sub-

warehouses. In other words, the materials and goods sourced from various regions in the world

are taken to one central warehouse, where they are assembled and repacked before redistribution

to other regional warehouses. The approach is based on a code of conduct policy and principles

such as supply analysis and e-sourcing to enhance satisfactory and safe supply chain operations.

Vodafone centrally acquires services and goods from the VPC and then distributes them

to regional centres. Additionally, the firm uses demand zones and distribution centres to
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determine strategic warehouse locations and the regions with higher distribution numbers that

best relate to its SCN model. The VPCs diminish and address coordination speculations using a

cost reduction approach. Saka-Helmout and Ibbott (2014) posit that VPC managers centrally

acquire and distribute goods globally to leverage transportation costs and get better terms for

Vodafone. However, a centralized SCM structure exposes the firm to warranties, hedging,

foreign exchange, low volume discounts, high payments terms, intellectual property, and

discriminative selection risks.

Vodafone has a logistics department, which collaborates with the logistics departments of

other international firms such as the Gulf Warehousing Company (GWC). Most of the logistics

companies that Vodafone collaborates with are leading logistics services providers for designing

smartphone Apps and online ordering systems for effective SCM (Trade Arabic, 2017). This

collaboration helps Vodafone set global standards in logistics operations. The telecommunication

company has a smartphone and order management system for inventory visibility and allocation,

order placement, customer delivery, real-time inventory and distribution, and workflow approval.

The ordering system provides digital proofs for all the materials delivered, cash collected, and

signed documents. Vodafone used a digital device for all the goods received from suppliers and

delivered to clients. Consequently, the system promotes efficiency and reduces the delivery time

of goods to consumers, hence facilitating a better client experience.

Vodafone commenced a pre-planning stage and incorporated the extrinsic and intrinsic

stakeholders, suppliers, and departments to resolve Coronavirus-associated risks. The company

recognized and invested in four critical pillars for maintaining a stable global supply chain:

consumers, contingency planning, employees, and suppliers. Addressing the needs of these

pillars helps Vodafone efficiently manage crises (Hawkins, 2020). Also, the SCM strategy
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prepares and anticipates crises instead of waiting for them to strike. Vodafone transformed its

ERP system to Oracle Fusion to digitize its processes and procedures to reduce the time wastage

in the supply chains.

Etihad Airways

The aviation company has various departments that perform specific supply chain roles.

These departments include human resources, procurement, finance, software engineering,

marketing, and hardware engineering (Ivy Panda, 2020). Etihad’s SCM deals in airport services,

fuel, aircraft equipment, and in-flight services (Etihad Airways, 2016). An advanced information

system helps resolve challenges that may threaten the stability of its supply chains, like flight

cancellation and failed flight booking. An efficient and digitized procurement system helps

people access flight services in real-time. The clients do not have to queue for the flight

attendants to serve them. Therefore, integrating technology into the firm’s procurement system

reduces time wastage in the supply chain. The Code of ethics policy also increases the stability

of Etihad’s supply chain. Ethical policies allow employees and vendors to work professionally,

thus supplying goods on time and helping avoid conflicts, which may interrupt SCM

(Sandybayev, 2018). Under order and inventory fulfilment, suppliers register with the company

and must comply with its minimum requirements. After registration, the vendors can log into

Etihad's portal and apply for tenders. These conditions help Etihad keep order and effectively

manage inventories from different parts of the world. A digitized inventory management system

makes it easy to track and verify suppliers’ documents, thus boosting supply chain efficiency.

The Request For Proposal (RFP), Request For Quotation (RFQ), and Request For Tender (RFT)

forms are some of the most typical documents that suppliers must have to engage in Etihad’s
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supply chain (Sandybayev, 2018). Etihad Airways only issues the RFQ document to the

suppliers and clients who want specific products and services.

The firm has a highly advanced sourcing portal, which only registered users access. To

limit supplier bias, especially those from outside the UAE, Etihad ensures that all partners follow

the terms and conditions set. The firm also has an interactive vendor system where suppliers can

forward their prospects and discuss issues affecting them (Sandybayev, 2018). Operational

strategies help translate and explain the strategies applicable on the air and ground. Etihad's

operational strategies are based on its goals and missions. The firm’s networks have various

departments equally distributed in the company's countries. The departments have equal

importance and play critical roles in bringing positive changes. Through the operation strategy of

linking all departments, the company monitors and ensures constant product and service

reorders. This system also assists Etihad in forecasting product replenishments (Kamarudeen &

Sundarakani, 2018). Global supply chain operations are also enhanced by highly qualified staff

such as pilots and engineers and efficient aircraft-related items. The major challenge in Etihad’s

SCM is associated with products and services. Inefficient tracking devices cause high product

wastage. The SCN challenges limit essential operations in the company. Therefore, Etihad

should improve the network of its supply chains.

The company has procurement and supply chain department to supply airline services

and materials on a global scale. The procurement department handles incoming logistics and

ensures that they are of the set standards. Etihad partners with other organizations to reduce

supply chain operating costs and increase profits. Specifically, the company engages in code-

sharing partnerships to supply passengers. For instance, a collaboration with Berlin Air increased
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its traffic by 300 000 passengers in 2015 (Etihad Airways, 2016). The procurement department

performs the most crucial SCM roles.

Managerial implications on the Supply Chain Management

Virgin Group

Virgin Group can apply various managerial actions to improve its SCM. For example, it

should adopt a sustainable supply chain to increase customer satisfaction. Moreover, the

company should re-evaluate device compatibility to improve its competitive advantage in the

supply chain. Integrating modern SCN strategies in the SCM can also improve competition needs

and minimize complexities. Virgin Group can also develop a sustainable global supply chain by

improving the credentials of its goods and services in ways that enhance environmental

conservation and safeguard employees', customers', and societal members' rights. For example, it

should recycle its uniforms and partner with organizations that embrace green technology

techniques like Vivienne Westwood.

Moreover, partnering with organizations with excellent procurement teams, such as Delta, can

help it maximize synergies, engage in profitable joint sourcing, and ensure its supply chain

operates in collaborative ways (Jacobs, 2019). A cluster and holistic approach can help improve

Virgin Group’s distribution network. These approaches entail reviewing the distribution network

components and grouping documents together to identify operational malfunctions (ILS

Company, 2022). In short, Virgin can improve its SCM by sourcing consistently, supplying

effectively, planning strategically, using competent teams, governing appropriately, and

satisfying customers’ needs.

Vodafone
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Vodafone has many years of experience in the telecommunication industry and has

experienced many business challenges. One of the recommendations for improving its SCM is

applying a more representative structure. One SCM principle is centralized and does not meet all

consumers' needs. The company should use regional and representative-based supply chains as

One SCM does not fill all the product distribution gaps. Moreover, Vodafone should embrace

more integration in its SCM. Integration is a technical approach for enhancing the close

coordination of functions between different channels (Mosteanu et al., 2020). The integration

allows SCM supervisors to see the details of their actions, interactions, and transactions.

Considering that the organization has two companies (VPC and Vodafone Operations) with

different lines of operation, it should synchronize its operations to minimize the procurement and

supply chain gaps. The SCN model can also help reinvent Vodafone and increase sustenance and

growth. Vodafone should ensure that its supply chain remains stable during crises by signing

contracts with all suppliers.

Vodafone should focus on engineering its operations by applying appropriate

cybersecurity controls in its systems and introducing safe operational technologies to minimize

warehouse accidents. Including a distribution and issuance mechanism can help the firm ensure

that the goods released are of high-quality design and meet the expected design, safety controls,

and standards. Enhancing flexibility in all the supply chain channels and stages and supplying

ICTs should be a priority for improving the company’s SCM and software assurance efforts.

Etihad Airways

Etihad can improve its SCNs using four strategies. First, it should create policies to

regulate and increase payment options. This strategy will assist Etihad to have a clear image of
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what is spent on the supply chain and make appropriate improvements to cut costs. Etihad should

adopt an effective distribution network, ensuring that all employees and partners know essential

operation parameters. The software used to deliver data to various departments should always be

up to date to enhance credible information sharing and minimize cybersecurity breaches. Lastly,

the firm should introduce practices that promote international trade. The staff should be rewarded

to motivate them to maintain an efficient supply chain. The organization can also improve its

supply chain by optimizing its inventory system. Inventories can be optimized by keeping what

is needed as the cost of holding and storing documents increases SCM expenses. Demand

planning and forecasting can also help optimize inventories. Etihad Airways should design a

sustainable supply chain by minimizing carbon emissions and using environmentally friendly

logistics.
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