Supply Chain Management
Tutorial - 1
In the early 1900s, companies like Ford Motor Company revolutionized production and
distribution by integrating manufacturing and supply operations under one roof. Fast forward
to the 21st century, global companies such as Amazon, Apple, and Unilever have adopted
complex, technology-driven supply chain models that span multiple continents. FreshGro
Logistics, a medium-sized company in the Maldives specializing in importing and distributing
fresh produce, is looking to improve its supply chain operations. Their current model faces
delays, inconsistent inventory levels, and high transportation costs. The management has
recently hired a new Supply Chain Manager to redesign their operations using modern SCM
concepts.
Case Study Questions:
1. Define Supply Chain Management (SCM) and explain how its core principles can
help FreshGro Logistics address the challenges it faces.
Supply Chain Management (SCM) refers to the coordination and management of all
activities involved in the production, movement, and delivery of goods and services,
from raw material suppliers to end consumers. It involves planning, sourcing,
manufacturing, delivering, and returning products efficiently and effectively.
For FreshGro Logistics, SCM can offer solutions to its current issues by applying key
principles such as integration, responsiveness, and cost-efficiency. Integration helps
ensure better communication and coordination across suppliers, transporters, and
retailers, which can reduce delays and improve inventory consistency. By building a
more responsive supply chain, FreshGro can react faster to changes in demand or
supply conditions, minimizing waste and ensuring fresher produce reaches customers.
Lastly, focusing on cost efficiency through route optimization and better supplier
contracts can reduce transportation expenses.
2. Using a historical perspective, compare traditional supply chains of the early 20th
century with modern supply chain models. What lessons from history could
FreshGro apply in its transformation?
In the early 20th century, supply chains were largely localised, linear, and heavily
reliant on physical infrastructure and manual processes. Companies like Ford Motor
Company controlled most of their production vertically, owning factories, raw
material sources, and even transportation networks. These traditional models
emphasized control and consistency but lacked flexibility and speed.
Modern supply chains, by contrast, are far more global, interconnected, and
technology-driven. Today, businesses use digital tools for real-time tracking,
forecasting, and coordination across multiple partners and countries. Flexibility and
adaptability are now as important as control once was.
FreshGro can learn from the past by adopting the discipline and structure of early
supply chains while avoiding their rigidity. For example, creating strong relationships
with a few reliable suppliers, investing in logistics assets that provide control over key
operations (like cold storage or delivery vehicles), and maintaining close oversight of
inventory could improve reliability. At the same time, embracing the agility and
connectivity of modern SCM will allow them to handle disruptions and meet consumer
expectations in today’s fast-paced market.
3. Discuss how advancements in technology and globalization have shaped the
evolution of SCM. What tools or strategies could FreshGro adopt to modernize its
supply chain?
Advancements in technology and globalization have significantly reshaped SCM by
enabling greater speed, visibility, and collaboration. Technologies such as Enterprise
Resource Planning (ERP) systems, Internet of Things (IoT) sensors, and AI-based
forecasting tools allow companies to predict demand, monitor shipments in real time,
and automate routine tasks. Globalization, on the other hand, has opened up access to
a wider range of suppliers and markets, but also brought new risks like geopolitical
tensions and supply disruptions.
For FreshGro, adopting tools like inventory management software, GPS-based tracking
for shipments, and data analytics for demand forecasting could lead to better planning
and fewer delays. Moreover, using digital platforms to communicate with international
suppliers could strengthen coordination and reduce miscommunication. Strategies such
as just-in-time (JIT) inventory, supplier diversification, and cold chain integration
(maintaining the freshness of produce through temperature-controlled logistics) can
help ensure products arrive in good condition without unnecessary overstocking. These
modern methods would allow FreshGro to be more competitive and reliable.
4. Evaluate the potential risks and benefits of shifting from a traditional supply chain
model to a more integrated and digital SCM system in the context of a small island
economy like the Maldives.
Transitioning to a more integrated and digital SCM system offers several benefits for a
company like FreshGro operating in the Maldives. One major advantage is improved
operational efficiency—real-time tracking, automated systems, and data-driven decision-
making can significantly reduce waste, manage delays better, and lower costs. Additionally,
better integration with suppliers and retailers can enhance customer satisfaction by ensuring
consistent availability of fresh produce.
However, there are also risks. Implementing digital systems often involves high upfront costs
for hardware, software, and training. In a small island economy, internet reliability and
technical support may be limited, which can hamper the performance of advanced SCM tools.
Moreover, reliance on digital systems increases vulnerability to cyber threats and system
failures.
Another challenge is the geographic isolation of the Maldives. Long distances from major
suppliers can lead to extended lead times and make just-in-time systems harder to maintain.
Therefore, any shift must be gradual and tailored to local conditions. A hybrid approach,
combining digital tools with strategic partnerships and physical infrastructure improvements,
may offer the most balanced path forward.
MOHAMED HUSSAIN
