Abstract

This paper presents a five year strategic business plan for a bicycle manufacturing
company called Real Cool Bicycles. The report has been presented through hiring a
business tool called MikesBikes Advanced Single playerA business simulation tool.
Prior to the proposition of business strategy, an extensive marketing audit had been
conducted through using major marketing analysis tools such as PESTEL, SWOT,
Ansoff, Porters 5 forces etc. The paper identifies business objectives, business strategy,
implementation plan, and performance monitoring and performance evaluation. The plan
concludes with the presentation of performance evaluation of five years of the implied
strategic pan. The performance evaluation has been drawn as generated through the
implied business simulation tool.

Strategic business; marketing audit; performance monitoring; performance evaluation

Introduction

Business management is highly influenced by the rapidly changing practices in our

external environment. Increasing market competition, technological advancements,
increasing globalisation, savvier and demanding customers than ever before, regulatory
and legislative bodies who enforce legislative and ethical business requirements on the
organisations are some of the major factors that are operational in our external
environment and shapes up the way businesses are managed today. Supply chain
management is a management discipline which is deemed by the researchers and experts
as a key business driver that builds organisations competitive advantage through
enhanced inter and intra-organisation relationship with its supply chain partners (Ellinger
2000). Supply chain management claims to be crucial business driver (Thomas 1999) and
the realised benefits are enhanced business efficiency, reduced cost of doing business,
effective and long-lasting business relationships and so forth.
The paper aims to review the literature available on the subject of supply chain
management and its best industrial practices so that an organisation

could be

evaluated for its hired supply chain management practices in accordance to the reviewed
industrial practices. For the reason, the paper has been structured upon answering
following questions so that the context of supply chain management best practices has
been formed to evaluate the empirical implication of the management discipline:
1- What is supply chain management?
2- What is the strategic role of supply chain management in business operations?
3- What are key performance indicators for supply chain management?
4- What are the best practices of supply chain management?

1- What is supply chain management?

Supply chain extends from the eventual supplier or source of the product to the eventual
customer (Blanchard 2007). In simpler words, Blanchard depicts a supplier as a framer or
a seed and a customer who consumes the product. The paper will review different
definitions of supply chain management as articulated by different experts however
defining the supply chain management in the easiest way, the Supply Chain Council
defines supply chain management as a process of plan, source, make and deliver (Supply
Chan Council; cited by Blanchard 2007).
Supply chain management is an approach adapted by the management of an organisation
that is implied to effectively incorporate suppliers, logistics, manufacturers and customers
(both internal and external to an organisation) so that improved, effective and efficient
on-going business performances of the organisation can be realised through the supply
chain; holistically (Chopra and Meindl 2001; Lambert and Cooper 2000; Zhao and
Simchi-Levi 2002; cited by Hong and Jeong 2006). This management discipline works
upstream and down stream. Upstream refers to supply and manufacturing processes
where as down streams refers to logistics and distribution processes (Hong and Jeong
2006). Christopher (2005) presents a more concise definition of supply chain
management as the management of downstream and upstream relationships with
suppliers and customers so that premium customer service is delivered at lowered product
cost (Cristopher 2005; cited by Jespersen and Larsen 2005). Jespersen and Larsens
(2005) addition to this definition finds a more strategic perspective that has been
presented in context to the supply chain management process. The researchers cite that
supply chain management process is the integral effort of organisational relationships,
effective business processes and information sharing at an advance level. It is therefore
suggested that supply chain management facilitates knowledge management across
organisational levels and at cross functional levels. The concept of supply chain
principally entails the coordination of the business processes and supplier relationships

through weighing the over all effectiveness, efficiency and competitiveness of firms
supply chain.
While examining the implied approach by the organisations for their successful supply
chain management practices, it has be learnt that management requires to establish an
understanding of their market positioning and strategic positioning so that the
organisations operational capabilities and supply chain relationships are managed in
alignment with the dynamic market conditions. It is of high importance that any
organisational practices should strive to take an account of rapidly changing market
environment so that any current initiative / activity can be reviewed and transformed in
the view of changing external circumstances.
Supply chain management extends beyond the incorporation of the supply chain partners
and market dynamics. The management discipline is also concerned with the
organisational competencies that are required in order to attain the objectives. This
management process also encourages the process of development of core competencies
by the supply partners (Halley and Beaulieu 2009). As an example an organisation will
train and develop its suppliers (manufacturers of a product) according to their own
organisational standards that are aligned with the industrial / regulatory requirements. It
is a common practice for organisations to do so with an ambition of earning competitive
advantage in the market place. This practice also adds value to the product, thus attain
customer satisfaction targets.
Cohen and Roussel (2005) articulate that it is of equal significance that organisations
continue to expand their supply chain as businesses grows. Business growth further on
requires to be accommodated through enhancing manufacturing technologies which also
needs to be enhanced, improved and accommodated. The real challenge that businesses
are faced today with is the accommodation and facilitation of existing supply chain of the
organisation to meet the future business growth needs. In addition to prosperity, business
growth also brings in complexities such as sourcing and hiring of new business tools
technologies, inventory and so forth.

2- What is the strategic role of supply chain management in business

operations?

Designing supply chain practices, it is imperative to note that strategic decisions and
planning is required so that the chain remains intact. This means that the management
should hire practices such as strategic location of production, storage / inventory,
distribution and retail facilities. Strategic decision also means that production task and
capacities are allocated to facilitate all the elements of supply chain (logistics, inventory,
procurement etc.) while establishing supplier and distribution channels through an
integration of production processes (Kouvelis et al. 2006). Hong and Jeong (2006) cite
that the success of supply chain process requires suppliers, manufacturers / producers,
logistics and distributors to be aligned and collaborated so that the process of information
exchange, knowledge sharing, material and cash flow etc. can be realised through
synergising these forces. As a matter of fact while examining the strategic role of supply
chain management in the business operations, it is pivotal to note that many researchers
agree over the fact that supply chain management process is dynamic in nature and needs
to be integrated with the production and manufacturing processes in addition to other
functions such as marketing, sales, customer relationship, inventory / procurement,
information technology (IT) (Garg and Lee 1998; Gaukler and Hausman 2005; Cohen
and Mallik 1997). Another important aspect that some researchers identify through
researching over the supply chain management practices of 100 of organisations is that
one-size doesnt fit all. Cox (1999) articulates that it is often a mistake to devise business
strategy and operational practices based upon the practices observed by market
successors or competitors operational in different markets and circumstances since these
practices may not be entirely reproduced. The researcher further adds that even if some
companies may be able to reproduce the operational circumstances such as marketing
competition, economy etc. these circumstance never remain static and are prone to
change. This means that the concept of strategic supply chain management implies that it
is imperative for the policy and decision makers to establish an understanding of the
critical success factors of the supply chain process more than the process of bench
marking. Having said that, the paper doesnt challenge the role of benchmarking and
observing and following industrial best practices, nevertheless it is recommended that
organisations should customise their supply chain management practices according to

their circumstances however the industrial best practices can be used as guidelines.
Strategic supply chain management also signifies towards business growth where supply
chain partners work as facilitator towards enhancing their performances so that success
can be acclaimed at the strategic level of their organisations and the organisations for
which they work in the role of supplier / distributors / manufacturers (Hong and Jeong
2006).
The role of supply chain management gains its importance due to increasing market
competition, increasing concentration of businesses towards adapting customer
orientation approach and globalisation of business operations (Shepherd and Gunter
2005). The benefit realisations of the management discipline as identified by Ferguson
(2000) are reduced cost of doing business, increased market share, increased sales
revenues and enhanced customer relationship. The literature review of supply chain
management also yields that customers can be both internal and external to an
organisation and strategic supply chain management, caters both.

3- What are key performance indicators for supply chain management?

Key performance indicators reflect the performance targets (KPIs) identified for the
organisation by the management. These are indicators to measure accomplishment of
critical business goals through evaluating those factors which are crucial to any business
success (Slack and Lewis 2002). However it has been stressed by researchers that
development of key performance indicators should follow a- precisely pre-defined
business processes, b- clearly identified business objectives and c- quantitative and
qualitative measurements of performance of business processes (Ugwu and Haupt 2005;
Tsang 1998; Feo and Janssen 2001). As identified earlier, it will be un-realistic to state
standardised performance measures that works for all the supply chain management
practices for all organisations, however taking a broad account of key performance
indicators that signify success of supply chain management process implied by
organisations Stadtler (2008) categorises supply chain processes in to four areas namely:
a- delivery performance, b- organisational assets and inventories, c- supply chain
responsiveness and d- cost of doing business. Each of these areas falling under the

umbrella of supply chain process has been adapted by Stadtler (2008) and briefed and
assessed below:
1- Delivery performance level:

Delivery dates are met in a timely manner as committed with the customer.

Delivering the right product at the right time and date

100 % shipment that carries all requested items which means that even 95 % of
requested items doesnt meet customer satisfaction levels, hence not a good
indicator either.

Accomplishment of service delivery levels.

Well-managed stocking of inventory.

Clearly identified and agreed upon order lead time. Order lead time is the average
time period from the date when the order has been placed by the customer to the
date customer receives the shipment of the requested order.

2- Organisational assets and inventories:

Accurately measured organisational assets and inventories to facilitate the supply

chain process. Poor inventory management is an added cost operational cost.

Well-managed inventory; appropriate stocking of goods as required, precise

inventory forecast in accordance with the sales forecast, asset turns (sales revenue
by assets).

Accurate observation of inventory turns. Inventory turns are defined as ratio of

total material consumption per time period over the average inventory level of the
same time period (Stadtler 2008, p. 55).

Recording and measuring the inventory age. Inventory age is the average time for
which the goods are stocked in the company warehouse; thus higher the inventory
age, weaker the KPI.

3- Supply chain responsiveness

Proactive approach of the supply chain process to respond to the rapidly changing
market demands in a timely fashion.

Flexibility of the supply chain management processes and supply chain

infrastructure to accommodate the significant changes taking place in the
competitive market.

Determined production planning cycle time in context with the cumulative level
of the planning process. Planning cycle time is the time period between two
succeeding planning cycles.

4- Cost of doing business

Accurate measure of cost of products sold.

Enhanced employee productivity in terms of value-addition.

Identification of cost drivers in the production process so that production cost can
be lowered where possible.

Observing warranty costs as a quality indicator.

4- What are the best practices of supply chain management?

In order to identify supply chain management best practices, the paper reviews the
performance measures of the supply chain management first. The paper will then form
these measures as the basis of identifying the industrial best practices so that evaluation
criteria have been established to identify the best practices. In so doing, it has been aimed
that once evaluation criteria has been ascertained, then only best practices shall be
observed and identified.
According to the Supply Chain Operations Reference (SCOR) model which is formed of
three fundamental elements i.e. a- process modeling, b- performance measurements and
c- industrial best practices (Poluha 2007), the five supply chain processes are plan,

source, make, deliver and return or customer satisfaction (Neely et al. 1995). The
following performance measures have been identified entailing these supply chain
processes. The success measures are:
a- Supply chain processes should be completed with in identified time attaining the
quality targets
b- Supply chain processes should be flexible and innovative so that the supply chain
infrastructure can cope with the rapidly changing market requirements (Shepherd and
Gunter 2005). Lee (2004) and Morgan (2004) further coin the importance of flexible and
innovative supply chain processes through rating them as significant strategic business
drivers.
c- Supply chain processes should also be objectified so that they remain aligned with the
business objectives whilst being competitive drivers (Shepherd and Gunter 2005) so that
the organisation continues to earn its competitive edge in dynamic market conditions.
Forming these performance measures as a baseline, following best practices in the
production / manufacturing industry have been identified by Shepherd and Gunter
(2005):

Organisations measure and evaluate performance targets of the supply chain

processes as strategic business drivers towards accomplishment of business goals.
This practice ensures the alignment of strategic business objectives and supply
chain objectives.

In so doing all crucial elements such as financial measures, customer service

levels etc., and elements internal or external to business such as employee
performance, relationship building with supply chain partners etc. are inclusive.

Organisations clearly identify supply chain processes and the significance of their
role and purpose in the wider scope of supply chain management.

Organisations precisely calculate cost of each process so that production cost can
be controlled and measured at identified periodic intervals and as appropriate.

Organisations identify and gain knowledge of expected benefits of the supply

chain processes on an individual and holistic basis so that performance
measurement process can be facilitated.

Continuous monitoring and review of improvement processes are performed so

that the supply chain is re-evaluated and improved or re-build as appropriate.

There exists an integration of business functions with the supply chain function so
that the business objectives are attained through resource optimisation.

Organisations ensure that none of the supply chain processes conflicts with each
other rather incorporation of the processes is practiced and observed at all
organisational and cross-functional levels.

Organisations ensure that the supply chain processes and performance measures
are aligned with the business strategies.

Organisations ensure that the supply chain management practices enforce

organisational strategies.

Strategic supply chain management is also being practiced. This means that
organisations continue to monitor and evaluate that whether or not the supply
chain management practices are aligned with organisations strategic objectives.
This is important since any business initiative that works in disagreement with the
organisations strategic objective is waste of valuable organisational resources.

Organisations avoid any kinds of misuse of power or conflicts building amongst

the supply chain partners as conflicts and abuse of power adversely affect
organisations performance (Balasubramanian and Tewary 2005) beyond
financial measures such as bad business credibility and reputation, loss of
customer trust, loss of supply chain partners trust etc.

Organisations hire modern manufacturing and business tools and practices such as
just-in-time, quality management, and information technology to enhance over all
supply chain performance management (Flynn and Flynn 2005; Green and Inman
2005; Dyapur and Patnaik 2005).

Mitchells and Butlers prime business is operations of managed bars, pubs and restaurants
that offer eating, drinking and entertainment to its customers through a chain of 2,152
outlets in the UK. Some of the known brands under which the company operates its
business are All Bar One, Toby Carvery, ONeil, Edwards and Screams. The company
also operates in Germany after a successful business acquisition of Alex brand of pubs
and bars (Datamonitor 2008). The paper now aims to gain an empirical understanding of
supply chain management through evaluating Mitchells and Butlers plc supply chain
management practices. The paper hires secondary research sources i.e. Datamonitor
company profile, companys corporate profile etc. to identify the supply chain
management practices at the organisation. However due to limitations of research
sources, the paper will be making certain assumptions that will be identified accordingly.
Upon reviewing the company profile, it has been learnt that the company recorded its
revenues of 1,894 million during the financial year 2007 (Datamonitor 2008) which is
an increase of 10.1 % in the revenues from the year 2006. The operating profit was
recorded to be 309 million in 2007; a decrease of 4.9 % from year 2006. This decrease
signifies weaknesses in the operations management of the company. Based on this
information, it has been assessed that the firms supply chain management may not be
strategically practiced since poor management of supply chain results in business
financial losses (Peck 2006). There may be many reasons for the poor performance such
as non-integration of other business functions with the supply chain, miss-managed
inventory, as However poor supply chain management may not only be the reason for
declining revenues

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