Pearson (Edexcel) BTEC Level 7 SSCM Strategic Organizational Supply Chain Management and Logistics Assignment


Assignment Task : Read the following Scenario, and prepare a report with the guidelines provided. Scenario: The learner selects an organization, understands and undertakes a full review of how it manages its supply chain and logistics. They will need to produce a report that includes how the management of the supply chain impacts on business performance, the role of IT in managing the supply chain, the role of procurement and logistics management.  The final part of the report will be a plan for a strategy to improve the organisation’s supply chain and logistics management. The report should include the following:
  1. Executive Summary
  2. Introduction of the Chosen Organization
  3. Explain the importance of effectiveness of supply chain management in achieving organizational objectives and the link between supply chain management and business functions in the organization.  What is the supply chain strategy of the organization and discuss the key drivers for achieving an integrated supply chain strategy ? (AC 1.1, 1.2, 1.3)
  4. Assess and evaluate how information technology has contributed in effective management and integration of various parts of the supply chain management. Explain the strategies employed by the organization to establish relationship with the suppliers and evaluate them. Discuss how IT can be used to develop systems and strategies to enhance and maintain the relationship with suppliers.   (AC 2.1, 2.2, 2.3, 3.1, 3.2, 3.3)
  1. Evaluate the procurement practices in the organization and the role of logistics in effectively managing the supply chain management in the organization. Also, discuss the factors to be considered to help improve the logistics and procurement practices in the organization. (AC 4.1, 4.2, 4.3)
  1. Propose a plan with a strategy to improve the organization’s supply chain and assess how the proposed strategy will benefit the overall business performance of the organzation. Identify the internal and external barriers and explain how the barriers would be overcome when the proposed strategy is being implemented. (AC 5.1, 5.2, 5.3)
  1. Findings, conclusions and recommendations.
  2. References (Adhering to Harvard Referencing Format)
The report shall not exceed 10,000 words and should include relevant examples and illustrations.


1.0 Introduction of the Chosen Organisation The company of focus which is Etihad Airways has been in active operations since 2003 after an Emirati decree. In this case, over the years, the company has significantly expanded in terms of their operations to offer services to more than 30 million clients as at 2017/18 financial year. It is headquartered in Abu Dhabi and involved in actively flying of more than 15 passenger’s planes at any time; cargo freights to diverse destinations in the Middle East, Africa, Europe, Asia, Australia, and in America. The company has more than 200 Airbus and Boeing aircraft and more than 500 aircraft ordered by different firms (Etihad Airways, 2017). In this context, operating through manual and conventional means is a challenge to the operations of the company and as such the need to integrate contemporary technology in their overall operations. This phenomenon is complex as the company has recently expanded its operations to collaborate with Airberlin, Air Serbia, Air Seychelles, Alitalia, Jet Airways, Virgin Australia and Etihad Regional. This development is coupled with active participation by different Etihad Airways partners with a common aim to deliver clients with an increased choice through improved networks and schedules and holistic flyer gains. Taking into account of the complexity and success of the organization, it is essential to evaluate how the management of the supply chain impacts on business performance, the role of IT in managing the supply chain, the role of procurement and logistics management. In this report, the areas of focus has been on the supply chain impacts on business performance, the role of IT in managing the supply chain, and the role of procurement and logistics management. 2.0 Explain the importance of the effectiveness of supply chain management in achieving organizational objectives and the link between supply chain management and business functions in the organization.  What is the supply chain strategy of the organization and discuss the key drivers for achieving an integrated supply chain strategy? (AC 1.1, 1.2, 1.3) AC 1.1 Importance of Effective Supply Chain Management in Achieving Etihad Airlines Objectives Adopting the definition of Zhu and Sarkis (2004), supply chain management (SCM) is a process involved in maximizing added value and reducing total cost across the overall trading process through a focus on speed and certainty of response in the market. Taking this into account, the SCM is a process used in integrating all practices involved in the supply of goods and products to the end consumers and ensuring that they are satisfied to the core. Ultimately, the client satisfaction is directly proportional to company bottom-line and an increased number of satisfied clients leading to increased market share and profitability. Further, as Zhu et al. (2008) pointed out, the SCM is equally involved in ensuring that all the activities in the provision of goods and services to the client are carried out in the most cost-effective manner and as such gaining positive impact on the company profitability and market dominance.  In this case, for any entity to be successful in attaining their set mission and objectives in a profitable manner, they must have an efficient, functional and effective SCM. There are three areas in which the supply chain management can be used in achieving the organizational objectives.  This include the purchasing strategy being integrated in the company competitive strategy, cross-functional teams and training of purchasing professionals and permanent lines of communication. In regard to the Etihad Airlines objectives, it is involved in the provision of airline carrier services to their esteemed clients globally with the dedication of attaining all their clients’ satisfaction. Also, the airline company is involved in providing modern flights for their customers and as such creating a competitive air transport market for their competitors. Furthermore, Etihad Airline is established with the core objective of ensuring that it unified the Eastern countries and the Western countries through a provision of its air services with Abu Dhabi being ranked as a core center of all the business operations. To achieve this, the organisation has delved into the provision of luxurious tourism airline services which are safe for their clients and quality air cargo services to their clients alongside other partners. Further analysis of the organisation objective, SCM plays an instrumental role to harness their success and holistic attainment of their objectives.  To become the industry best, they must be in a position of having the best information system to communicate with their clients, have effective ground handling services and fuel. All these practices involve sourcing, storage, supply, and satisfaction. For the customer satisfaction, SCM must be employed through an expertly manned logistics for the sake of ensuring that appropriate services are offered to their clients at the proper time and the right destination. After securing the appropriate function is being provided to their clients, SCM would ensure that they are in constant communication with their clients and any challenge of operations effectively highlighted. This role of SCM is amplified by the need to deliver safe and luxurious services which are highly technical demanding a strategic involvement of high capital equipment with their operators with high compliance to safety essential for different stages of operations. Therefore, based on the above analysis, it is evident that the effectiveness of the SCM would play an instrumental role for Etihad Airline in attaining all their objectives tied to profitability issues. In a general perspective, an active SCM would assist Etihad Airlines in identifying their fundamental competencies and restructuring of their overall operations through outsourcing processes that are not within the facets of their competencies. The strategy of adopting an active SCM would positively impact their market positioning and would be of value to the organization in attaining their objectives of being market leaders. This would be coupled with a selection of appropriate partners, resources and human capital hence ensuring all their fundamental stakeholders are actively involved in objectives implementation. AC 1.2 Link Between Supply Chain Management and Business Functions in Etihad Airline According to Stadtler (2008), the supply chain management is an integrated business model assuming a process-oriented view of the extent in which business functions are supposed to act collaboratively and the relationship between the business and their suppliers and clients. Inferring from the definition, SCM harness interconnectedness of all business functions. As a consequence, for Etihad Airlines, it must possess a significant business function and effective supply chain for business functions management. Hence, the supply chain is a link assisting an entity in their core business operation rendering goods and services to end clients (Seuring, 2013). In order to understand the link between the SCM and other business functions in Etihad Airlines, it is essential to consider the other business functions;
  • Sales and Marketing Function: In every year, the sales and marketing department is tasked with providing sales forecasts offered to the management and subsequent approval provided. After their consent, it is later presented to SCM who must calculate and estimate coordination with operations and understanding of the available fleet and resources are sufficient in meeting the forecasted demands in sales or if there is a need of further capital investment. This is through coordination with the capital budget in coordination with the finance in Etihad Airlines.
  • Finance: Through active coordination with the finance function of Etihad Airlines, they are actively involved in the preparation of the capital budgets and approaches to the management to approve it for further and future investments. The finance department pays all suppliers in areas of Fuel, IT, ground handling among others after SCM direction.
  • Operations: Part of the coordination by the SCM is ensuring that all available human resources force are available in meeting the overall sales budget and necessity of any further hiring to meet any additional demand. SCM is equally involved in coordinating with the operation department for estimating the demands and initiating any further purchases of the products essential for Etihad Airlines.
  • Human Resource: Any procured product or service by SCM is based on the availability of the workforce. In this case, SCM is actively involved in HR coordination in terms of recruitment and attaining the overall training needs of their new employees. It is equally involved in coordination with the HR department to meet all quality standards of services delivery.
Hence, from the above analysis, it is evident that SCM is actively integrated in all the business functions in Etihad Airlines ERP system in coordination with SAP who provides the system in collaboration with a range of cloud-based products across their vital business functions and inclusive of HR, finance, procurement and supply management and business intelligence. This is as evidenced in figure 1 below; Figure 1: Link between Supply Chain Management and Business Functions in Etihad Airline AC 1.3 Key Drivers for Attaining an integrated Supply Chain Strategy in Etihad Airlines According to Musawa and Wahab (2012), the history of integrated supply chain strategy can be traced back to 1970s when the Electronic Data Interchange (EDI) was developed and improved to the 21st-century Enterprise Resource Planning (ERP) (Almutairi, 2015). Also, the increased establishment of an Internet-based collaborative system has promoted the integration of business processes leading to the businesses becoming increasingly transparent and client friendly. Nevertheless, such strategies are not possible unless ideal and effective strategy and planning for implementing such a process are made for integrating the business functions. In the context of Etihad Airlines Company, the relevant internal and external drives to be integrated into the supply chain strategy include;
  • Customer Relationship Management: real-time information can be offered to clients in terms of service availability, the status of their flight or luggage and flight scheduling hence increasing the level of transparencies and customer information for utmost satisfaction. Also, the client’s complaints can holistically be addressed and subsequently rectified in the minimal lead time.
  • Supplier relationship management: Suppliers can always be kept updated on the change in the Etihad Airlines business dynamics, required supplies in advance. Any failure or a situation of goods return would be informed promptly hence providing sufficient space and time for the arrangement of deliveries. This would guide the suppliers in adequate planning for logistics and storages.
There are also internal factors acting as drivers of an integrated supply chain strategy of Etihad Airlines. They include;…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Please click the icon below to download this assessment assessment in full