Supply Chain Management Practices in Automobile Industry in the UK (GC01532)
Acknowledgements
There is a number of people that I would like to take the opportunity to thank who helped and support me throughout the research project.
- At first, I would like to thank my supervisor and programmed leader Rajib Mustafa, for all the support, assistance, encouragement and guidance during the completion of the research project.
- I would also like to thank Dr Nataliya Siraj, my research method lecturer for her guideline and support during the period.
- I also like to thank my module tutors of the Global business department Nyhro Odje and Bushan Mohan for their help and guidance over the past four years.
- Moreover, I also tribute my friends Mamun, Arafat, Riad, Rakib and all my fellow classmates for their mental support and strength throughout the years.
- Finally, the Contribution of my parents Shirin Akter, Zakim Uddin, my siblings Shimanto and my motivator Naznin Tuli who always been there to fulfil my learning paradigm throughout my entire study life.
Abstract
The purpose of the research study was to evaluate and investigate the impact of the supply chain on business performance with specific reference to the automobile industry of the United Kingdom. In this regards, the study has considered pragmatism philosophy, deductive approach, case study strategy, mixed-method choice, and primary data collection method (through semi-structured interviews and surveys – questionnaire) which was analyzed through descriptive, correlation and regression analysis (quantitative) and thematic analysis (qualitative). The findings of the study revealed that supply chain management had a significant impact on business performance; however, there were a variety of challenges that had limited the performance of the businesses operating in the automobile industry to a significant extent. For instance, the study unveiled that quality has become an integral issue in the case of the supply chain; thus increasing the overall product recall rate, even for leading companies in the automobile industry.
In reference to the quantitative data analysis, it was found that the supply chain has a strongly positive (uphill) linear relationship with business performance, which was depicted through the Pearson Correlation value of 0.739. In addition, the 0.000 sig (2-tailed) value depicted the existence of a relationship between both variables. This was further revealed that an impact exists amongst supply chain and business performance, where it was found that 1 unit change in the supply chain can lead to 111.4 per cent change in the overall business performance; thus indicating the importance and prevalence of effective supply chain management in the overall growth and success of the business, especially in the technologically advanced era. Considering the findings, the study proposed the automobile industry consider the use of Total Quality Management or the tools that are specifically designed to focus on improving quality on a continuous basis, which could lead to resolving the quality issues. In addition, the study also proposed that flexibility and change can help the businesses in accurately predicting the seasons for sale while ensuring that their supply chain is adjusted accordingly to meet the changes in the demand.
CHAPTER-1
1. Introduction
The business environment has become more competitive over the past decade where Supply chain management (SCM) accounted as the most prominent methods to define the competitive edge in the fast-moving world (Wahyuni, 2010 pp. 1-2). The essence of SCM accounts for operations because the globalization of SCM forced corporations to turn into global sources for their suppliers. In addition, the economic recession of 2007-2009 increases the focus on supply chain management impact towards the organizations because it generates shareholder value by providing outstanding product availability and also proliferates revenue by managing the cost of the inventory (Dittmann, 2010). According to Lambert et.al – SCM are the integration of business process that add value for customers and other stakeholders by providing products, services and information from end-user to the actual supplier (Enarsson, 2009). The direct or indirect approach to fulfil customer request is one of the key functions of the supply chain while it is not only fulfil manufacturer and suppliers request but also meet transporters, retailers, and customers demand (Chopra and Meindl, 2007 p. 1-7). The prime objective of the supply chain is to maximize the overall value generation where planning, designing and operation decisions play a significant role in the success or failure of a business.
Among all other industries, the supply chain process in the automobile industry is very crucial, complex and competitive because it’s dealing with global production network make complex web throughout the industry (SMMT, 2016). Not only this, Luthra et al. (2011, p. 233) opined that complex supply chain nature throughout the automobile industry enforces a number of challenges that are largely linked to changes in market demand, globalization, compliance, quality and confidentiality. Almost all the outlined challenges impact manufacturers, suppliers, management and customers where cost leadership and product differentiation act as principal forces of SCM due to attain sustainable competitive advantage in the market (Crandall et al., 2014). Supply chains in the automobile industry are vastly important as it is a cardinal part of the UK economy and it contributed about £15.8 billion towards the economy in 2016 (Mor and Brown, 2017). At present customer, demands are changing rapidly and it does not only affect overall supply chain activities of an organization but also degrades goodwill in the market. So, there will be a wider scope of this research study for the UK automobile industry in terms of forecasting the critical challenges that arise towards the supply chain process.
Contextual Background:
The increased global competition in business encompasses the automobile industries outstretch into foreign markets and that largely become more dependent on the effective management of the supply chain.UK is the home of the wider automotive industry where over 30 automotive manufacturers and 18 of the top 20 global automotive suppliers operate within the complex supply chain of the UK that heavily occupy multiple sourcing. On the global web, third parties are managed distribution center where multiple locations are utilized to hold finished goods inventory which also signifies the essence of managing the supply chain. The evolution of SCM in the motor vehicle industry has been an area of growing interest since the 1970s in regards to the benefits of collaborative relationships beyond the own organization.
However, a major movement appears in SCM after a decade where manufacturers occupied on reengineering supply chain cost structures, internal integration of logistics within the companies and costs reduction towards improving the customer service. After that information technology has been accelerated and markets are being globalized in the 1990s companies began to focus on “core competencies” and introduce Enterprise Resource Planning (ERP) systems to adopt with integrated logistics system. Although the development takes place supplies chain planning still primarily based on centralized planning and distributed collaboration while utmost conditions emerge companies to meet demand fluctuations for assembling quality, safety, and sustainability standards (Christopher 2016, p. 65). However, proposed legislation changes across the EU enforce enormous challenges as the EU exported over £30 billion cars across the UK which accounts for about 57.5% of cars sold in the UK (SMMT, 2018).
In addition changes in tariffs or regulations will impact the sourcing of assembly parts and distribution of finished vehicles which also emerge organizations to rethink medium and long-term strategies. Moreover, moving towards World Trade Organization arrangements may lead to a 10% tariff imposed on finished vehicle movements over the UK and EU where approximately 4.5% imposed tariff may be absorbed by the automotive supply chain or passed to customers(Campbell and Pooler, 2007). Therefore, firms can no longer effectively compete in isolation of their suppliers and other entities in the supply chain so the interest in the concept of supply chain management has been a growing concern throughout the automotive industry.
1.2 Statement of the Problem:
The concept of Supply chain management has now become an indispensable phenomenon for the UK automobile industry as it increases profitability and develops an image of the industry. The automotive industry is time-sensitive and key challenges behind the Supply chain signatories noted an overall decline in production levels which largely linked to customers overstocking in past years. The increased pressures on companies to reduce costs tend to face issues in their supply chain for meeting the global demands because consumer demands for quality automobiles with acceptable cost.
The UK and European automotive suppliers are heavily integrated with each other where narrowing production cost and weak vehicle sales across the continent significantly prompt supply chain risk (William and Apperley, 2014). In addition, almost all UK automobile manufacturer facing key issues about the design of their global production and distribution network (Chopra and Meindl, 2007). Therefore the current research is focused on identifying these complexities and challenges in supply chains while presenting the past ten year trends of the UK automotive industry to understand the emergence of these challenges.
1.3 Purpose of the Study:
The ultimate aim of this research is to scrutinize the utmost challenges of SCM in the UK automobile industry. To examine the depth of the issue the researcher will study the background of the UK’s automotive supply chain in regards to define the current factors that impact the automobile industry. In addition, the research will also focus on the current trends of the automobile industry and the overall impact of trading block segregation in the UK automobile industry. Moreover, the researcher will explore the challenges of the supply chain management system and government strategies for the future advancement of the UK automobile manufacturing process………..
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