Logistics and Supply Chain

Management: A Case Study on

Name

Course
Tutor
University
City/State
Date
 2

Table of Contents
Introduction................................................................................................................................3

Task A: Analysis of how efficient and effective Logistics Management can enhance an
organisation’s competitiveness...................................................................................................3

Cost Advantage.......................................................................................................................3

Value Advantage.....................................................................................................................4

Task B: Analysis of Relationship between e-commerce and e-business and assessment of how
the chosen organisation can benefit from recent innovations and developments in e-
commerce/ e-business................................................................................................................5

Task C: Evaluation of Best Practices, the chosen organisation can implement or has
implemented along with benefits of implementation of such three practices............................6

Conclusion..................................................................................................................................8

References..................................................................................................................................9
 3

Introduction
There was a time when there was a phenomena which don’t accepted now “good products
will sell themselves”. Moreover, it is also not acceptable that we depend on our current
success for our future success. Active management understands that it is defensible and
sustainable competitive advantage which can seriously help in getting sustainable success.
Currently, there are a number of factors which play an important role in terms of gaining
competitive advantage. It prominently include; logistics management, supply chain
management, e-commerce, e-business, etc. It especially includes effective logistic
management practices[Chr16]. This report will highlight important aspects of logistics
management, e-commerce, and e-business in context of a chosen organisation.
The chosen company is Sainsbury’s Supermarket Company. Official name of the company is
J Sainsbury plc however, it trades as Sainsbury’s. In UK’s supermarket industry the company
stands at second place in terms of its size. The company holds around twenty percent of UK’s
supermarket sector. It was year 1869 when the company was established and founded by John
James Sainsbury. Its headquarters are located in London. Its main subsidiaries include;
Sainsbury’s Bank, Argos, and Home Retail Group.
Let’s analyse different aspects of logistics management, e-commerce, and e-business in
context of Sainsbury’s.

Task A: Analysis of how efficient and effective Logistics Management can enhance an
organisation’s competitiveness
There are a number of benefits of effective logistics management which helps in enhancing
organisational competitiveness. Below are few of benefits of efficient and effective logistics
management. Let’s analyse how these contribute towards organisational competitiveness.

Cost Advantage
It was considered earlier that in order to control or reduce cost it is important for an
organisation to either increase its sales or increase its market share. However according to
model or theory developed by Christopher (2011) profitability can’t be improved always
through volume increase with the help of economies of scale concept. The theory or model of
Christopher was based on this point that in today’s increasing global village market a major
portion of product cost does not lies inside four walls of a business instead, it is outside
environment where major portion of product cost lies. It is due to development of wider
supply or logistics chain system on account of increasing globalisation. Therefore, theory or
 4

model of Christopher is that it is effective and efficient logistics and supply chain
management which can be seriously helpful in reduction of costs. Reduction in cost can
provide opportunity for an organisation like Sainsbury’s to offer its similar quality product at
lower price in comparison to its competitor. Such situation will give cost advantage to the
organisation which will ultimately enhance organisation’s competitiveness.

Value Advantage
A product or service would be considered as an ordinary commodity and sale would be
achieved by a commodity which has lowest price. However, in case a product or a service has
unique features or offers higher value to customers then the previous scenario wold not apply
to such a product or service. Target customer would still be willing to buy the service or
product even it is offered at a higher price in comparison to its competitors. On this account,
it is important for an organisation like Sainsbury’s to add additional value to its products and
services in order to gain or increase its competitive advantage [Gon09].
In order to add value to its products and services the organisation will have to develop a
strategy by focusing on adding value. However, the strategy also will require a segmented
approach. Different groups of target customers can look for different added benefits and value
in a particular product or service offered to them. According to model or theory developed by
Christopher (2011) again there is an important role of logistics and supply chain management
in terms of adding value to a product at low cost. If an organisation has effective and efficient
logistics management then the organisation can procure and supply product with higher value
at minimum cost to its target customers. In such scenario the target customers again will
prefer the product of the organisation over its competitors as they will be getting a better
product at similar price. It will be helpful for the organisation in terms of increasing
competitive advantage of the organisation. Again, it will be effective and efficient logistics
management which would be helpful in enhancing competitive advantage. Analysis of only
these two aspects of effective and efficient logistics management highlight key role of
effective and efficient logistics management in enhancing an organisation’s
competitiveness[Chr16].
 5

Task B: Analysis of Relationship between e-commerce and e-business and assessment of

how the chosen organisation can benefit from recent innovations and developments in e-
commerce/ e-business
Even though e-commerce and e-business have difference but these are strongly interrelated.
E-commerce refers to buying and selling of products through internet. On the other hand,
there is not such limitation in terms of e-business. All the activities conducted through
internet related to a business are covered under e-business. E.g. technologies used by
Sainsbury’s for information and technologies are also covered under e-business term. E-
commerce and e-business are strongly interrelated as e-commerce is e-business’ main part.
There are researchers who say when a business totally carried out through electronic medium
then it would be termed as e-business however, if a business conducts its business through
electronic medium as well as through physical presence then the online part of the business
would be termed as e-commerce. Overall, all money related business transactions are
included in e-commerce while, all the supporting activities along with monetary activities are
included in e-business. It reflects that e-commerce is an integral part of e-business. For
example, e-commerce requires internet as well as other electronic mediums and tools to
perform monetary and supporting business activities, the internet related monetary business
transactions are addressed by e-commerce [Mag16].
Organisations around the world including Sainsbury’s can benefit from recent innovations
and developments in e-commerce and e-business. The organisations including Sainsbury’s
can benefit in a number of ways like; flexible business hours, tracking business growth,
reaching to customer faster, etc. [Mag16].
Main benefit which Sainsbury’s can achieve through the developments and innovations is
reducing time and money spent for its business. Sainsbury’s have to bear a number of costs
for its physical location or physical store. The costs can include; rent, salaries, wages,
telephone bill, electricity cost, etc. The company can easily reduce or even the company can
eliminate such costs through recent developments and innovations in e-commerce and e-
business. The innovations have ability to make Sainsbury’s tasks simpler. For example,
instead of printing thousand brochures and despatching through post it is relatively easy and
cost effective to send it through e-mail [Mag16].
Other important benefit of the recent innovations and developments is tracking business
growth. There are a number of useful tools available in the market which can be helpful for
Sainsbury’s to track its business growth. For example, the company can track how many
 6

customers have returned to the company or which product is best-selling during a specific
time period [Mag16].
Other main benefits of the developments is flexible business hours. Due to 24/7 availability
of internet Sainsbury’s can easily earn money even if its physical locations are closed.
Removing restriction of location is another major benefit which Sainsbury’s can enjoy. The
internet has reach to almost all parts of the world. Due to innovations in e-commerce and e-
business Sainsbury’s and its customers will not have to face limitation of physical store
closing timing. Through recent innovations and developments the e-commerce or e-business
is now in reach of mobile devices and smartphones. This reflects that Sainsbury’s can enjoy
doing business with its customers on the go[Mag16].

Task C: Evaluation of Best Practices, the chosen organisation can implement or has
implemented along with benefits of implementation of such three practices
There a number of effective practices which can be helpful for Sainsbury’s for its logistic
management as well as in its e-business operations. First such practice is Just in Time (JIT). It
is very expensive to keep so much inventory. JIT is one of best practices as it helps in
controlling inventory costs. Under this practice an organisation does not have to keep a stock
pile of products round the clock. Instead, small amount of products are kept in inventory.
Other best practice can include; increasing inventory velocity, implementing lean logistics,
improving supplier performance, compress cycle time, etc. For example, under increasing
inventory velocity the inventory is moved very quickly instead of storing it for longer period
of time before delivering to actual customer[LTD15].
Other best practices which can be added to the list include; building strategic relationships,
optimising intelligent consolidation and routing, and continuous evaluation of logistics
network design. Let’s analyse these practices along with its benefits for Sainsbury’s [Inf16].
Top organisations around the world focus on logistics service providers. They try to build a
good relationship with these providers in order to simplify bidding and negotiation process,
streamlining process of customs clearance, and for compliance avoid any delays on account
of proper documentation. This practice is very beneficial for the organisation. The
organisations enjoys long term benefits by focusing on concerned parties and developing
good relationship with the parties. This is because it simplifies its logistics management
process and supply chain main process. Their customer clearance process is streamlined; it
 7

simplifies their bidding and negotiation process; and they don’t have to face delays on
account of compliance of proper documentation [Inf16].
As for optimisation of intelligent consolidation and routing is concerned, it is very critical to
identify optimum supply chain cycles. The optimum supply chain cycle is one which is
shortest one however, provides required supplies within time. Such cycle is helpful for
organisations like Sainsbury’s in long run as the organisations is able to save big. However, it
order to benefit from this practice it is necessary that unnecessary processes should be
eliminated from logistics management. And also identify such methods which can help in
maximise utilization of containers so that resources are used at optimum level and at reduced
cost [Inf16].
The last but not least practice is helpful for organisations around the world including
Sainsbury’s is continuous evaluation of the design of logistics network. There was a time
when there was not much focus on evaluation of certain factors like; capacity requirements,
physical distribution networks, etc. However, now business environment has changed
dramatically. The companies have to be on their toe due to ever evolving supply chain and
logistics management strategies. The companies including Sainsbury’s have to keep a
constant eye of evaluation on their existing logistics processes and network. This practice
also has long term positive implications for the organisation. It not only help in effectively
competing with other players in the market but, also helps in reducing costs and increase
overall profitability of the organisation[Inf16].
 8

Conclusion
From the above limited analysis it has been found that there are a number of factors which
play an important role in terms of gaining competitive advantage. This report highlighted
important aspects of logistics management, e-commerce, and e-business in context of a
chosen organisation. There are a number of benefits of effective logistics management which
helps in enhancing organisational competitiveness like cost advantage and value advantage.
Even though e-commerce and e-business have difference but these are strongly interrelated.
Organisations around the world including Sainsbury’s can benefit from recent innovations
and developments in e-commerce and e-business. The organisations including Sainsbury’s
can benefit in a number of ways like; flexible business hours, tracking business growth,
reaching to customer faster, etc.
There a number of effective practices which can be helpful for Sainsbury’s for its logistic
management as well as in its e-business operations. First such practice is Just in Time (JIT).
Other best practice can include; increasing inventory velocity, implementing lean logistics,
improving supplier performance, compress cycle time, etc. Yet other best practices which can
be added to the list include; building strategic relationships, optimising intelligent
consolidation and routing, and continuous evaluation of logistics network design.
 9

References
Ballou, R. H., 2007. Business logistics/supply chain management: planning, organizing, and
controlling the supply chain. [Online]
Available at: https://books.google.com/books?hl=en&lr=&id=4cyN3lVFe-
UC&oi=fnd&pg=PR19&dq=supply+chain+management&ots=DlQqLW5qK2&sig=utGuuU_
ZdeBc30cVw_ErmKD7j9s#v=onepage&q=supply%20chain%20management&f=false
[Accessed 18 12 2017].
Bisk, 2016. Steps to Improve Your Supply Chain Procurement and Maximize Supply Chain
Efficiency. [Online]
Available at: https://www.usanfranonline.com/resources/supply-chain-management/steps-to-
improve-your-supply-chain-procurement-and-maximize-supply-chain-
efficiency/#.WKQmxGjJjIX
[Accessed 18 12 2017].
bizcem.com, 2014. Relationship Between E-Commerce And E-Business. [Online]
Available at: http://bizcem.com/conceptual/relationship-between-e-commerce-and-e-
business/
[Accessed 18 12 2017].
Christopher, M., 2016. Logistics & supply chain management. [Online]
Available at: https://books.google.com/books?
hl=en&lr=&id=NIfQCwAAQBAJ&oi=fnd&pg=PT7&dq=supply+chain+management&ots=
x1a6CsLqiw&sig=O0SUOE3_sz6Wv7J9ZW3uNRi0l14#v=onepage&q=supply%20chain
%20management&f=false
[Accessed 18 12 2017].
Christopher, M. a. H. M., 2011. “Supply Chain 2.0”: managing supply chains in the era of
turbulence. International Journal of Physical Distribution & Logistics Management, 41(1),
pp. 63-82.
Fawcett, E. S., Magnan, G. M. & McCarter, M. W., 2008. Benefits, barriers, and bridges to
effective supply chain management. [Online]
Available at: http://business.utsa.edu/faculty/mmccarter/files/FawcettMagnan%26McCarter
%202008%20SCMIJ.pdf
[Accessed 18 12 2017].
Gonzalez, A., 2009. A Google Approach to Supply Chain Management. [Online]
Available at: https://logisticsviewpoints.com/2009/02/19/a-google-approach-to-supply-chain-
 10

management/
[Accessed 18 12 2017].
Hult, G. K. D. a. A. M., 2007. Strategic supply chain management: Improving performance
through a culture of competitiveness and knowledge development. Strategic management
journal, 28(10), pp. 1035-1052.
InfinitiResearch, 2016. Best Practices in Logistics Management: The Right Way Forward.
[Online]
Available at: https://www.infinitiresearch.com/thoughts/best-practices-logistics-management
[Accessed 18 12 2017].
LTDManagement, 2015. GLOBAL LOGISTICS / SUPPLY CHAIN BEST PRACTICES - TO
SUPPORT AND DRIVE BUSINESS SUCCESS AND TRENDS. [Online]
Available at: http://www.ltdmgmt.com/logistics-best-practices.php
[Accessed 18 12 2017].
MagentoExpert, 2016. E-Business vs E-Commerce, Know The Differences. [Online]
Available at: https://medium.com/@Magento_expert/e-business-vs-e-commerce-know-the-
differences-151ec9baf0fe
[Accessed 18 12 2017].
Narimanhb, 2012. Relationship between E-commerce and E-business. [Online]
Available at: https://narimanhb.com/tag/relationship-between-e-commerce-and-e-business/
[Accessed 18 12 2017].
sainsburys.co.uk, 2017. About. [Online]
Available at: http://www.sainsburys.co.uk/
[Accessed 18 12 2017].
searchmanufacturingerp.techtarget.com, 2010. supply chain management (SCM). [Online]
Available at: http://searchmanufacturingerp.techtarget.com/definition/supply-chain-
management
[Accessed 18 12 2017].
www.cips.org, 2013. The top three barriers facing the next generation of supply chain
professionals. [Online]
Available at: https://www.cips.org/supply-management/opinion/2013/october/the-top-three-
barriers-facing-the-next-generation-of-supply-chain-professionals/
[Accessed 18 12 2017].