“Supply Chain Management at PC World, UK”

The research work that I wish to undertake is the study of Supply Chain Management Systems at PC World. I would be studying the organization of the SCM, analysing its value chain, identifying any loopholes in the process and putting forth recommendations for future improvements. I would be concentrating on the areas of Relationship Management at the upstream of the value chain, The Information and Communication Technologies (ICT) and the impact on Customer service.

Objectives of the Study:

The objectives of my research work are manifold. Primarily, I would be looking at studying and formally documenting the supply chain system at PC World, which at present is not to the standards. The system is good, but lacks proper documentation which has led to many minor problems in the chain. Supply chain is one of the vital components for a purchase led business and my work is aimed to improve this process. My Secondary Objectives are to analyse the ICT systems in use, Supplier Relationship Management in place and an empirical study on how the value chain is improving customer satisfaction.

Why is the Study Important?

The current economic crisis has been the most severe after the Great Depression. The much publicized GDP growth in the third quarter of 2009 did not happen for UK; instead the economy shrank a further 0.4%. While the European counterparts have published modest growth rates, we are still searching for positive triggers. With six straight quarters posting negative growth, the present financial crisis has been the most severe after the Great Depression. The last eighteen months saw 5.7% of the UK market capitalization being wiped out. When factored for inflation over the same time frame, these numbers look much more intense. With the job market in doldrums, consumer spending has virtually frozen. This has affected multiple industries. Each and every segment, including the essential needs has been affected. This has led to many organizations looking to improve customer satisfaction, reduce costs and improve profitability. Restructuring and Reorganizing has become quite common with companies looking for synergies and positive triggers. Furthermore, recent developments in the ICT systems and procedures have defined immense business opportunities by effectively managing partner relations. It is in the wake of these that my work will be a great research in one of the areas to improve organizational efficiency.

Theoretical framework

During my research, I would mostly be guided by the works of Walsham Grace. A Professor in the Computing Department of the University of Cambridge, his series of publications by the Cambridge University Press are well respected in the area. His work “Globalization and ICT: Working Across Culture” will be my primary theoretical resource. His theories explain the need of ICT in the present robust economies to achieve efficiency in the Value Chains. Furthermore, I'm inspired by the works of Cooper MC and Lambert DM towards the field of Supply Chain Management. Their series of works published in the International Journal of Logistics Management will form the primary thinking behind my proposed study.

Research Problem and Research Questions:

The research problem that I wish to address is the inefficiencies and improvement opportunities present in the PC World's supply chain. I would be studying the organization of Supply Chain at PC World, identify improvement opportunities and suggest changes to be made so as to make the business more efficient. I would be concentrating on three dimensions: Use of ICT in the process, Supplier relationship management and Customer satisfaction. Through my research, I aim to answer the following questions:

  • How is Supply chian organised at PC World?
  • A case study on the way the whole value chain is organised at PC World.
  • What is the role of ICT in the value chain?
  • A study of the PC World's ERP and related systems along with their impact on its value chain.
  • What does PC World manage its Supplier relations?
  • A case study on the way PC World manages long term relations with its key suppliers.
  • How is the supply chain affecting customer satisfaction?
  • A numerical analysis based on customer responses to structured questionnaires.
  • What can be done to improve?
  • Recommendations based on data gathered from respondents.
  • How are the proposed changes to be implemented?
  • A detailed recommendation on the way change is to be implemented ensuring minimal impact on the service delivery during the transition stage.
  • How will this improve business efficiency?

Literature Review:

Apart from the theoretical resources discussed above, I would be falling back on the following resources. “Transition to B2B e-Marketplace enabled Supply Chain: Readiness Assessment and Success Factors” by Lavassani, M. K., Movahedi B., Kumar V. would be my primary resource material. The book discusses the whole gamut of Supply Chain Management, right from its basics to the complex operational nuances, the role of IT and the recent developments in the area. Numerous cases and real world examples included in the book will be of great practical use during my work. “Knowledge management systems: information and communication technologies “ by Ronald Maier will be by primary reference material on the more technical aspects of the research. I would be looking through the Journal of Supply Chain Management and the Journal of E commerce for the latest developments and happenings.

Research Methodology:

My research is concentrated on the Supply Chain factors present both upstream and downstream of the value chain. As such, I'm interested in the supply side and the demand side; towards suppliers and the end customers. My work will be done on three dimensions:

  • Organization of Supply Chain.
  • Impact of ICT systems on the supply chain.
  • Impact of the Supply Chain on Customer Service.

Ethical Issues:

In conducting this study, I would be guided by the Guidelines set out in the British Educational Research Association (BERA) 2004 ethical issues for Educational research. The guidelines state that the researches are wholly responsible to their sponsors, the research community and participants of the research.

The guidelines state that all research work must be conducted at the highest levels of integrity. Research findings are to be published without falsifying and misstating the work done. The guidelines set out the responsibilities of the researcher to participants of the research, sponsors of the research and the research community. (BERA, 2004).


Though I would be undertaking my research as comprehensively as possible, inherent are the following limitations:

  • Time Constraints. My course semester does not allow me to conduct a detailed and an exhaustive research that I had planned for. As such, there might be a few important areas which I may be forced to overlook. However, I would be covering most of the important disciplines.
  • Security Issues. An Organization's supply chain, information about its ERP and key supplier contracts are sensitive company information which might be very difficult to reproduce. Hence, I anticipate myself as not being able to publish a few of my findings. However, I have secured the management's support for my research and should be able to publish most of my findings.
  • Financial Constraints. Few of the company's suppliers are located overseas. It would not be financially feasible for me to travel and cover every major company suppliers. Hence, my work is confined to the major suppliers having physical operations in the UK.

Contributions/ Outcome:

My study is a research led work and I anticipate building on the new and dynamic concept of Supply Chain Management Systems. Academically it would be invaluable resource focussing on the fast growing ICT systems used in Supply Chain and Supplier Relationship Management. In Business sense, my work will present ways foe PC world to consolidate their not so good supply chain, strengthen their supplier relations and to understand its customers in a better fashion; all to increase process efficiency and business profitability.

Research Project Plan:

My research work will be conducted over a period of ninety days. I have been working on my project since mid December and hope to finish it early March/ late February. I have utilised my first month for background studies and literature review. Over the nest two months, I would be allocating 20 hours a day for my work, ten of these will be spent in the actual company locations. The next thirty days will used for studying the SCM systems and practices in place, the ICT systems used, developing structured questionnaires to conduct the empirical part of my research and interview suppliers and customers over the questionnaires. The next two weeks would be utilised for data analysis and coming up with recommendations to make the Supply Chain slimmer and more efficient. In the final two weeks, I would be reporting my entire research.

Supply Chain Management

It is the efficient planning implementing and controlling of the activities in the supply chain of an organization. It co-ordinates the activities right from storage of inventory the movement of finished goods from the origin till the consumption of goods by the consumer.

Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities, it includes coordination, cooperation and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers.

-APA (American Professional Association)

Characteristics of Supply chain

  • It integrates supply and demand management in and across companies.
  • It organizes the network of business that provides products and services.
  • Some researchers distinguish logistics and Supply Chain Management, while others consider the terms to be similar.
  • Supply Chain Management can be used even as a software.
  • Supply chain event management is a study how a supply chain is organized in an organization and how solutions are created for the problems which occur during the implementation of supply chain in an organization.

Issues in Supply chain and supply chain management

Supply chain management must deal with the following limitations:

  • The major limitation of supply chain management is Distribution Network Configuration. It means the supply chain is affected by the number of suppliers, the location where they are? And the network missions of suppliers. It also influenced by the production facilities and distribution centers, warehouses, cross-docks etc. sometimes customers also affect the supply chain.
  • The Distribution Strategy also affects the supply chain .it may affect during transportation through motor carriers, truckload, LTL, parceling, railroad, ocean freight and air freight. During replacement strategy and transportation control the supply chain management gets affected.
  • While sharing valuable information regarding demand signals, forecasts, inventory and transportation that information might get integrated and affect the total supply chain management.
  • The quantity and location of inventory affects the supply chain which includes raw materials, work-in-process and finished goods.
  • The cash flow at each level of supply chain also affects the supply chain.
  • The flow of tasks in the supply chain, such as fulfillment of the order, procurement of inventory, warehousing and transporting of goods.

Activities in

Supply Chain Management

  • It is the movement of raw materials within an organization for internal processing of raw materials and converting them into finished goods which is followed by the movement of finished goods to the end user or the consumer.
  • Supply Chain Management has to reduce the ownership of raw materials by the organization for a longer time and should help the organization achieve its competence.
  • The functions of the supply chain can also be outsourced to increase the cost effectiveness the most important aspect is to satisfy the customer demand while the management of daily logistic operations is reduced.
  • Supply Chain Management has to build the trust among the members of the chain and should improve association between them.
  • Supply chain Management activities should help the organization to move their inventor rapidly and should improve visibility in the supply chain.

An SCM Model proposed by the Global Supply Chain Forum ( GSCF ) shows that Supply chain activities can be grouped into strategic, tactical, and operational activities.

Strategic Activities in Supply Chain Management

  • The Strategic activities include the optimization of the strategic network of an organization such as the number of storehouses their location and capacities, the distribution centers and their facilities etc.

    • It involves the creation of communication network among the members of the supply chain and it should create an improvement in the supply chain activities like docking, shipping, logistics, transport etc.
    • It includes the coordination of the designing and development of the products and should integrate the existing and the new products into the supply chain.
    • It should accommodate the use of It into the supply chain to support the activities in the supply chain.
    • It should integrate the supply chain activities with that of the overall organization's activities.

    Tactical Activities in Supply Chain Management

    • It involves decisions pertaining to contracts and purchase of inventory.
    • It involves decisions related to production like the location, contracting, scheduling the production, planning the production and defining the process of production etc.
    • Decision Making related to the quality, quantity, location, transport and use of inventory.
    • It involves formulation of strategies pertaining to freight such as the frequency of transport, the cost, logistics, routes and contracting etc.
    • It involves the benchmarking of the best processes in the industry throughout the operations.

    Operational Activities in Supply Chain Management

    • It involves activities and decisions related to day to day activities related to planin and production at all levels of supply chain.
    • It involves the forecasting of production facilities and requirement in the supply chain every moment.
    • It involves planning and forecasting of Demand and converting the demand into supply and sharing it with all the members of the supply chain. Planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.
    • Inbound operations, such as transport and movement of goods and inventory in the supply chain.
    • It involves production and operational decisions from consumption of inventory to the flow of finished goods in the supply chain.
    • It involves the orders promises, accounting for all activities in the supply chain right from suppliers to end users.

    SCOPE of Supply Chain Management

    Organizations rely on effective supply chain networks, to compete in the global market.

    According to Peter Drucker, the concept of business networking extends beyond the traditional enterprise limitations and extends to organize the entire business processes throughout a value chain of multiple companies involved in it.

    In globalization, Information Technology outsourcing has enabled the organizations to operate in such a way that each business partner focuses in the few key areas in which he s specialized.

    This inter organizational network is the new trend in the organizational form with the complex interactions among the players; the network structure is neither a hierarchical structure nor a market structure.

    It is unclear of what kind of level of performance impact that different supply network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among the players. From a system's point of view, a complex network structure can be rotten into individual component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of an internal management control structure is known to make an major impact on local firm performance (Mintzberg, 1979).

    During the 21st century, there have been great changes in business environment that has contributed to the development of supply chain networks. Firstly, as an outcome of globalization and the increase of multi-national companies, joint ventures, strategic alliances and business partnerships, have found to be making significant success factors, following the earlier "Just-In-Time ", "Lean Management" and "Agile Manufacturing" practices. Secondly, technological changes, particularly the dramatic fall in information communication costs, which are a paramount component of transaction costs, have led to changes in coordination among the members of the supply chain network (Coase, 1998).

    From Here …………..

    In most common terms, a structure is "a set of semi-independent organizations, each of their respective capacities and capabilities collaborating with varying business arrangements, so as to serve one or many markets to achieve collaborative goals, collectively”. The fresh titles for Supply network structures are as "Next Generation Manufacturing System" or "Extended Enterprise" or “Global Production Network" or " Keiretsu " or “Virtual Corporation" are well acknowledged by researchers and scholars as new order organizations. (Akkermans, 2001).

    The perceptional transformation towards integrating activities from managing individual functions with key supply chain processes in place could be the first major step in establishing a successful supply network. For instance; the purchasing department places orders as requirements become appropriate only, when Marketing Department responding to customer demands and communicates the same with distributors and retailers across to meet the customer's demand. The integration process leverages the Shared information among supply chain partners of an organization to its advantage.

    The key to Successful integration of Supply chain business process is by engaging the collaborative work across buyers and suppliers, joint product development, common systems along with the shared information.

    In 2000, the Lambert and Cooper emphasized the whole as “The continuous information flows in the integrated supply chain process supports an organization to achieve best product flows”. Despite such emphasis, there exists an opinion among organizations and Management networks, that optimization of the product flows cannot be realized without embedding a process approach to respective businesses.

    The enlisted supply chain key processes by Lambert (2004) are mentioned below:

    Customer relationship management

    Customer service management

    Demand management

    Order fulfillment

    Manufacturing flow management

    Supplier relationship management

    Product development and commercialization

    Returns management

    In addition to Lambert points other key are:

    Customer service management


    Product development and commercialization

    Manufacturing flow management/support

    Physical distribution

    Outsourcing and partnerships

    Performance measurement

    a) Customer service management process

    As the customer information is the basic source for customer service, the core aspect of Customer relationship Management is between the organization and its customers respectively. This real- time information makes customers aware on various details like product information, product availability, probable delivery dates through multiple information interfaces about the company's production and distribution operations.

    Steps to build an effective and Successful customer relationship:

    • Establish commonly rewarding goals between organization and customers
    • Customize and invest efforts to preserve customer rapport always
    • Generate positive outlook with customers and in the organization

    b) Procurement process

    In laying fine strategic procurement process plans, the opinions, interests and support of the suppliers is very crucial; as their confidence in the plans lay basis for newly set manufacturing flow management and it's the same in case of any new product development.

    When operations are global and far reach across, the organizations need to adapt processes to source and manage them accordingly. To succeed in creating the preferred product it is important to have mutually advantageous relationship, reduced times cycles in design and development of the product play significant role.

    Deploying tools like Internet connectivity and electronic data interchange (EDI) can boost communication systems of the purchasing function of an organization to drive activities.

    These powerful communication systems streamlines a lot of activity in obtaining, managing and tracking information about products and materials, which supports organization in successfully dealing with issues; resource plans, supply sources, negotiation phases, order placement, inbound transportation and delivery status, storage capabilities, handling and quality assurance. Also, it prompts the organizations to bear the responsibility and to coordinate commitment with suppliers over delivery scheduling, supply continuity, misrepresentation, and research support studies in creating new product and program sources.

    c) Product development and commercialization

    This helps organizations to bring down product development time cycles with aspects of customers, suppliers so as to capture markets better by staying competitive, product innovations, and scope to stay ahead of competitors in exceeding customers expectations.

    Lambert and Cooper suggests following points to Managers of product Development & Commercialization:

    Abreast customer relationship management with real needs of customer needs; by choosing right choice of materials and suppliers in line with procurement, and

    Develop practices in evolving various potential production technologies to enhance manufacturing flows in integrating them with best supply chain flows of product-Market contexts.

    d) Manufacturing flow management process

    For any organization the earlier forecast mechanism and its information and details helps in a big way in designing flexible and better manufacturing process procedures and supply efficiencies with distribution channels.

    Thus processes being mass customized and Flexible to market changes, operating processes to order processes on just-in-time (JIT) basis of lot sizes and brings down the time cycles of manufacturing flow process with improved efficiency in responding to customer demands. So the organization very easily develops operational efficiencies in work stream lining, planning, scheduling, transportation, and inventory and scales the elasticity across geographies in meeting distribution and production assemblies.

    e) Physical distribution

    In the context of physical distribution, the customer standout as the final end of movement of marketing channel for any finished product or service, in continuing to offer the availability of the product or service in each distribution channel. Also, the time and space of customer service are of high value integration in the process of reaching out its customers like Manufacturers, retailers and wholesalers.

    f) Outsourcing and partnerships

    The basic of the concept of performing the outsourcing by organizations has moved from typical procurement of materials to placing different channels and sources to deliver the services too, thus focusing on areas of value chain and its advantages.

    This trend is well embraced in logistics domain, where organizations have picked and build partnerships with leaders in transportation, warehousing and inventory control to scale in the control collective network of partners and suppliers. This strategy allows the organizations with effective monitoring over supplier performance issues and managerial command over logistics partners on a daily basis.

    g) Performance measurement

    The organization reaps the best of profits and controls market share is a direct result of supplier and customer integration process. It allows organizations to frame emphasis for performance management setting about logistics competencies with the supplier capabilities and invests in long- term objectives of customer relationships for competitive advantages.

    The researchers along with A.T.Kearney Consultants noted that organizations equipped with broader performance measurements have delivered consistent results and below are some analyzed and suggestible internal measures for any organization:

    1. Cost
    2. Quality
    3. Customer Service
    4. Productivity Levels and
    5. Asset measurement

    In benchmarking “best practices” and recorded valuable customer perceptions are powerful tools in leading an organization to measure and utilize the analysis to quantify its net value of external performance.

    The major and key integration Components of Supply Chain Management are

    1. Standardization
    2. Postponement
    3. Customization

    The integration and management components of SCM:

    To understand the level of integration and management of business process is a calculation of function of the number and level with ranges of low and high and the link of added components (Ellram and Cooper, 1990; Houlihan, 1985).The third element of the four-square circulation framework displays the SCM components.

    The application of the principle is in addition of more management components or increasing level of each component accordingly, can increase the level of integration of any business process , adding more management components or increasing the level of each component can increase the level of integration of the business process relation.

    Lambert and Cooper in 2000, suggested the below components, in balancing view of the literature on business process engineering, buyer-supplier relationships and attract the managerial attention to various possible components of SCM.

    1. Planning and Control
    2. Work structure
    3. Organization structure

    4. Product flow facility structure

    5. Information flow facility structure

    6. Management methods

    7. Power and leadership structure

    8. Risk and reward structure

    9. Culture and attitude

    A close look at the available literature will shed us more information about what makes the best structure with details on “components” and “branches” for a business process related to customers and suppliers.

    Bowersox and Closs emphasis's that “Great heights of joint achievement can be represented by the synergies exchanged mutually in establishing the cooperation” (Bowersox and Closs, 1996).

    The Primary participant is keen to carryout responsibilities of inventory ownership or in assuming the financial risk along with other primary level components (Bowersox and Closs, 1996). The Secondary participant is specialized, who is keen to perform necessary services for primary participants, along with representing channel relationships, inclusive of secondary level components. The Third level channel participants involves the components and branches of the primary and secondary level channel participants.

    The Lambert and Cooper's literature don't help us to understand comprehensively the specialized primary and secondary level components of the supply chain. (See Bowersox and Closs, 1996, p.g. 93). This speaks about the absent emphasis in understanding how these various components should be viewed, structured and examined to lay an effectively integrated supply chain. (See above sections 2.1 and 3.1).

    Later reviewing the literature by Baziotopoulos to discover supply chain components and the below are some significant suggestions of the study:

    Customer service management and benchmarking and order fulfillment comprises the top priorities for primary and secondary level components.

    For Product Data Management (PDM), the primary and secondary level components are; product development, commercialization and market share, customer satisfaction, profit margins, and stakeholders ROI respectively.

    For enterprise resource planning (ERP), the primary and secondary level components are; physical distribution, manufacturing support and procurement and warehouse management, material management, manufacturing planning, personnel management, and postponement (order management) respectively.

    The primary level components of logistics should be linked with information flow facility through organization's internal structure for performance measurement.

    Variant, direction, decision and policy measurement level comprises the four aspects of the Secondary level components and in particular, total cost analysis (TCA), customer profitability analysis (CPA), and asset management are carefully measured.

    The outsourcing comprises of the management methods, and the strategic objectives for particular initiatives in key areas of information technology, operations, and manufacturing capabilities as primary level components and logistics as secondary level components.

    The concepts of Reverse logistics are familiar as "Aftermarket Customer Services", where on any given time, the Warranty Reserve or Service Logistics budgets allow withdrawing money. The whole process Reverse logistics is aimed to generate a purpose in recovering value or proper authorization of information by planning, implementing and controlling the capable and valuable of inbound flow along with storage of secondary goods.

    A Compared study of Approaches- Traditional to Supply Chain Management ____________________________________________________________



    Supply Chain

    Inventory management approach:

    self-sufficient efforts

    combined cutback in channel inventories

    Total cost approach:

    Check on firm costs

    Channel-spread cost efficiencies

    Time horizon:



    Amount of information in sharing and monitoring:

    restricted to current transaction needs

    Need and demand based

    Amount of coordination of multiple levels in the channel:

    distinct contact for the transaction between channel pairs

    manifold contacts between levels in firms and levels of channel

    Joint planning



    Compatibility of corporate philosophies:

    No relevance

    Compatible for key relationships alone

    Breadth of supplier base:

    Large to increase competition and spread risk

    Small to increase coordination

    Channel leadership:

    Not required

    For focused management

    Amount of sharing of risks and rewards:

    Each on its own

    shared mutually on long-term basis

    Speed of operations, information and inventory flows:

    “Warehouse” orientation (storage, safety stock) interrupted by barriers to flows; Localize to channel pairs

    “Distribution Center” orientation (inventory velocity) interconnecting flows; JIT; Quick Response across the channel.


    A few recognizable changes in present total global scenario are:

    Cut down product life cycles.

    Shorter product change-over cycles

    Increased rate of scope for new product development

    Pint sized cycles of production runs.

    Zero- defect integration of Quality and productivity

    Extensive utilization of Total Quality Control (TQC) or Total Quality Management (TQM).

    Possession of strategic resources like Equipment and process technology

    Adaptable Manufacturing Systems (FMS)

    Rising significance for project management practices.

    Embracing technological changes over information and automation needs.

    Depart employees' strategic training on Technology work inputs, performance and accountability.

    Deploying Computer Aided Design (CAD), and Manufacturing (CAM).

    Understanding role of technology forecasting.

    Enhanced utilization of automated decision aids for Decision Support Systems (DSS), Expert Systems (ES), and Simulation Experiments.

    Developmental Practices for ‘hybrid' technologies as ‘technology fusion' by blending technologies.

    The following are existing dominating trends across global industrial scenario are:



    Knowledge driven production and services activities.

    Increasing belief for IT based faster economic growth across advanced nations in organizations, markets and production systems.

    Increased scope of facilitation for global strategic collaborations among organization networks and inter organizational structures.

    Below are the Factors that complicate the Issue:

    Industries with inadequate production facilities.

    Growing Saturation levels by excessive segmentation of markets.

    Fast shifting customer values increases stress to fix issues of product cost, quality, and user's performance.

    Demand to lower breakeven point with increasing segmentation of markets.

    Rise in the unexpected competitors across the world.

    An Unforeseen impact exerted by one sector or a branch or a product on network of industries by technology in equipment and processes.

    The traditional industry finds it difficult to match in customers demand with existing global context of competitiveness.



    Being conscious by the need of procurement

    Being decisive about the requirements

    Establishing specifications

    Communicating purchase requirements:

    Purchase indents/Bill-of-material (Production items)

    Purchase indents (Other items)


    Comprehensiveness in description

    Suitability to requests

    Alignment through stores

    Sorting indents into indent registrar


    By Telephonic quotations

    By Printed quotations

    Buying schedules

    Sources for selection & development


    Scrutiny of received and short listed quotations

    Negotiations in placing orders on suppliers

    Acquiring information on suppliers' acceptance of purchase orders


    Pre-delivery summaries

    Deficiency in chasing Reminders

    Paying Personal visits

    Attending Telephones/Telegrams

    Accessing Faxes/Telexes

    Locating personnel sources at suppliers' works


    Acquiring and storing end-end information in Material Consignment Register about dispatch (RR/LR/CAN)

    Through check of quantity and types of physical damages to the packages

    Noting consignment details in order in GRN register

    Quantity certification of unpacked goods

    Move up of GRN

    Enclosing and aligning receipt of materials to the indenter

    Proper Inspection of goods


    Tracking inward- outward Material mobility to respective stores

    Pitching for Quality certification

    Application of protective coating/marking

    Best utilization of rack spaces by filling storage materials

    Posting of receipt into stock card


    Receiving GRN s in accounts department

    Receiving suppliers' bills

    Posting of purchase register

    Passing of bills

    Effecting payments

    Supplier and Vendor/Ancillary



    Accommodates multiple manufacturers

    Matches up to 50% for the manufacturer (single)

    Supply Contract issue is subjective

    Supply Contracts are Long term specific

    Outward and buyer-seller relationship

    In bound and inclusive relationship with partners

    Contract violations are less effective for involved parties

    Contract break up's upsets channel partners relationships

    Collective decision making isn't encouraged

    Strong decisive making systems exists with manufactures

    B) Centralized v/s Decentralized Purchase



    uni-source purchase executions central location

    Independent and freedom to source purchases

    Pushes Discounts to match economies of scale

    Occasional practice of Discounts

    Purchase Standardization

    Non-Standardization of purchases

    Soaring Logistics costs

    Low Logistics costs

    Suppliers will be Leaders and Giants of the domain

    Suppliers will be of small size

    Centralized CSD canteen purchases

    Diversified suppliers for material purchases

    TAJ GROUP gets its stationary needs supported by an central re-cycle paper manufacturer in Delhi

    Mc Donald's, pune , sources chicken by Venky's and in Delhi by Sunrise hatcheries

    C. Make v/s Buy Decisions



    In-house manufacturing

    Outsourced manufacturing

    Cost of purchase over cost of manufacture

    Cost of manufacture over cost of purchase

    Possess strong investment abilities

    Cant afford to bear capital investments

    Nil or very limited plans to divest and focus on core competencies

    Divests plans and focus on core competencies

    L & T forges ahead into LTITL

    SBI out sources its 17 functions

    Requires 5 M's






    Non Required

    Involves secrecy

    Uninvolves any secrecy

    The Distribution Cost Analysis

    The companies need to realize respective physical distribution objectives and place in systems to bring down the total distribution costs.

    Following costs are inclusive of the total distribution costs:

    The Freight Costs

    Fixed Warehouse Costs

    Variable Warehouse (inventory) costs

    The cost of lost sales by delivery delay or out of stock of the product is the most immeasurable.

    To bring down costs at different phases needs to assess and analyze the details of costs, which leads the managers to indentify and increases the chances to minimize the existing cost gaps.

    Following are enlisted steps for better analysis of distribution costs:

    By acquiring comprehensive data details of the Costs will aid in tracking the areas of managerial effects.

    Derives simple ways to calculate the Unit Cost by using Quantitative Techniques.

    Analyzing the Information, positions in setting the Priority Areas.

    Obtaining the Details of Cost Data: Internally but can be acquired externally too.

    Tracking the Handling Effects: It is very essential to have minimum handling in order to bring down the probabilities of pilferage, breakage and other sort of damages.

    Measuring the Unit Cost: The numbers can be measured for different units in knowing the values of fixed and variable costs.

    Applying Quantitative Techniques: The quantitative techniques help to arrive at significant details to enjoy advantageous position.

    Analyzing the Information: Will lay emphasis on actions to work out.

    Placing the Priority Areas: Managers on assessing the strengths and weakness can increase scope to set cost reduction priorities.

    Managers or Organizations to make better decisions by collection and analysis of cost data and it's so easy to arrive at, as the complexity of interdepartmental nature of work and psychological constraints.

    Below are the Major categories of cost components:

    Production Costs

    Materials Movement Costs

    Warehousing Costs

    Inventories Costs

    Dealers acquired Costs

    Consumer acquired Costs

    In addition the other important costs to consider are:

    Shortage of goods

    Damaged goods costs

    Distribution and Administration Costs

    Packaging Costs

    The significant emphasis over the above details:

    Costs at the Production Point: Total costs that involves material, labour, power and energy costs.

    Costs of Storage and Handling: This cost comprises of labour and space.

    The other financial costs are Costs of working capital for inventory of finished products, cost of deteriorating products and packaging costs which sum up the costs of packaging along with cost of labours.

    Materials Movement Costs

    Freight costs is incurred in movement of goods/products from the plant/factory to warehouse and then to the distributor/dealer.

    Having hired transport arrangements with paid insurance charges is beneficial over the possession of Self transport systems, which will increase both the capital and operational costs.

    Warehousing Costs

    Costs incurred in hiring a warehouse is advantageous over costs of having own storage at ware house along with capital and operating costs. In case of uncertain location of warehouse, the incurred costs are termed as 'Improper Location Costs', apart from financial and administrative costs.

    Managing Inventories Costs

    The most likely places for inventories are:

    1. At the Production Point
    2. At the Warehouse
    3. At stock points

    Here the capital would be employed, where cost of interest will be considered at this unique way of calculating costs.

    The servicing cost of inventory contains

    1. Handling costs
    2. Insurance
    3. Pilferage
    4. Deterioration
    5. Obsolescence
    6. Taxes.

    In addition to the costs of certain regular stock possession levels at demanding times, the organizations also need to bare costs of minimum stock of inventories, known as safety stocks.

    Dealers acquired costs

    These costs are direct product of contractual arrangements in delivering goods from warehouse to distributor/dealer and thereafter the dealers incurs costs in storing inventories, handling and as an element of cost in returning, as in case of soft drink bottles.

    Consumer acquired Costs

    The context where customers acquire certain costs as part of distribution analysis is always a point of debate in competitive space of markets and consumers. For instance, in rural Indian markets, the bulk purchases of fertilizers by rural farmers are expected to bear the costs of inventory and transportation.

    Cost of Storage's, Damages, Pilferage's:

    Insurance isn't complete answer for all needs of storage, transportation and damages of goods, as difference exists over value of insurance claims and settlements. But, Insurance bears the costs of storage and transportation of bulk quantities and also should be even prepared for uninsured times.

    Distribution & Administration Costs :

    The analysis of incurred costs in Maintenance, administrative and managerial activities should be considered.

    Packaging Costs:

    Organizations need to set separate distribution costs for Special packaging for transportation and warehousing, say during product exporting, along with regular packaging of the products. The distribution Managers analysis plays a key role in identifying under performing areas and should effort to establish corrective measures.

    By deploying Information and Communication TechnologyorICTs encourages users to participate and allows them to access, explore, exchange and present to fast changing business activities, cultures and people.

    Impact of Global Economic Scenario:

    Globally there's been a phenomenal up rise in ICTs multi-tier businesses in the last decade bring significant changes in political process and economy in setting new horizons of growth.

    ICTs have been principle in speeding the globalization process and setting new trends in work and people cultures. The trends impacted the labour conditions and fundamental approaches towards production. Also, it has revolutionized for ever in the way of doing businesses by embedding communications have enabled organizations to adapt to ground breaking models of hiring resources and various outsourcing models across sectors and verticals.

    The outsourcing models have traversed across the supply management chains of different global locations creating economically attractive bases of production and supply. The Organized labours in developed nations have considered this as a serious threat to their bargaining power and existence, as the outsourcing is certain in making to look them as obsolete and redundant in value.

    The other dimensions of this new economic impact have been regionally uneven and disbursed. Thus has continued to increase the inequalities of digital divide between developed and developing nations in affordability, accessibility and in investing these technologies.

    Social Impacts:

    In effort to extend the reach of organizations with centralized management practices of public administration to urbane centers, have multi-fold impact on societies.

    Creation of new order employment opportunities and jobs demanding varied and new skill sets have affected professionals of certain sectors; in common terms the difference of perceptions between pro and anti groups existed can be said as “re-skilling” and “de-skilling “.

    Globally the acceptance of ICTs in Societies and organizations haven't been the same. For instance English accounts to 10% of global population, but has a presence of over 80% on internet content.

    TILL HERE ……………………….

    The diffusion of ICTs within societies is varied, with some institutions and sections of society having greater access to ICTs than others. These divisions are reflected in the content of ICTs. For example the English language, which is understood by only 10% of the world's population, accounts for approximately 80% of internet content.

    Despite this disproportion in power relations, many social justice movements believe ICTs can be used to promote equality and empower marginalized groups. These groups advocate ICTs as a means of providing accessible and affordable information and as a platform for voices that might otherwise go unheard.

    Economic development

    ICTs have been identified by many international development institutions as a crucial element in developing the worlds' poorest countries, by integrating them into the global economy and by making global markets more accessible. The World Bank has collaborated with the International to promote access to ICTs, an initiative which it describes as one of its most successful.In 2006 the United Nations launched an initiative called theGlobal Alliance for Information and Communication Technologies and Development

    Information and Communication Technologies for Development(ICT4D) is a general term referring to the application of Information and Communication Technologies (ICTs) within the field of international development. ICT4D concerns itself with directly applying information technology approaches to poverty reduction. ICTs can be applied either in the direct sense, wherein their use directly benefits the disadvantaged population, or in an indirect sense, wherein the ICTs assist aid organizations or non-governmental organizations orgovernments or businesses in order to improve general socio-economic conditions. In many impoverished regions of the world, legislative and political measures are required to ease or enable application of ICTs, especially with respect to monopolistic communications structures and censorship laws.

    The concept of ICT4D can be interpreted as dealing with deprived populations anywhere in the world, but is more typically associated with applications in developing countries. The field is becoming recognized as an interdisciplinary research area as can be noted by the growing number of conferences, workshops and publications. Such researches have been spurred on in part by the need for scientifically validated benchmarks and results, which can be used to measure the efficiency of current projects.Many international development agencies recognize the importance of ICT4D. For example the World Bank's GICT section has a dedicated team of some 200 staff working on these issues.

    A good example of the impact of ICTs on development are farmers getting better market price information and thus boosting their income. Another example includes mobile telecommunications and radio broadcasting fighting political corruption in Burundi.

    The dominant terminology used in this field is "ICT4D". Alternatives include ICTD and development informatics.

    The history of ICT4D can, roughly, be divided into three periods:

    ICT4D 0.0: mid-1950s to late-1990s. During this period (before the creation of the term "ICT4D"), the focus was on computing / data processing for back office applications in large government and private sector organisations in developing countries.

    ICT4D 1.0: late-1990s to late-2000s. The combined advent of the Millennium Development Goals and mainstream usage of the Internet in industrialised countries led to a rapid rise in investment in ICT infrastructure and ICT programmes / projects in developing countries. The most typical application was the telecentre, used to bring information on development issues such as health, education, and agricultural extension into poor communities. More latterly, telecentres might also deliver online or partly-online government services.

    ICT4D 2.0: late-2000s onwards. There is no clear frontier between phase 1.0 and 2.0 but suggestions of moving to a new phase include the change from the telecentre to the mobile phone as the archetypal application; less concern with e-readiness and more interest in the impact of ICTs on development; and more focus on the poor as producers and innovators with ICTs (as opposed to just consumers of ICT-based information).


    School kids with laptops in Cambodia


    ICT4D initiatives and projects are designed and implemented by international institutions, private companies (e.g. Intel's Classmate), governments (e.g. e-Mexico initiativ), non-governmental organizations (e.g. International Institute for Communication and Development), or virtual organizations (e.g. One Laptop per Child).

    ICT4D projects address one or more of the following issues:

    Access and Infrastructure: providing suitable computer hardware, operating systems, software, and connectivity to the internet. These would include the availability of software and hardware, the ability to share software (as echoed in the Free Software movement), and the ability to sustainably connect to the internet.

    Capacity building and training in ICT:installing, maintaining, and developing hardware and software, digital literacy (technological literacy and informational literacy) and e-Awareness.

    Digital content and services: e-services (e-learning, e-health, e-business/e-commerce, e-Governance/e-Government), includ concerns related to local-language solutions in computing, and the Open Access agenda.

    Regulation of ICT Sector and digital rights: Universal Access vs. monopolistic structures, Intellectual Property Rights, privacy, security, and digital identity.

    Ethics and Social Contexts

    Environment and Agriculture

    Free and Open Source Software

    Gender and ICT

    Health and Medicine

    Policy and Social Analyses

    Technical Innovation for Development


    Bad access roads and lack of power hamper ICT4D Projects in rural areas

    Projects which deploy technologies in underdeveloped areas face well-known problems concerning crime, problems of adjustment to the social context, and also possibly infrastructural problems.

    Literacy issue is one of the major factors why projects fail in rural areas, proper education and training to make the user at least understand how to direct the application to get the proper information they needed. Constant follow up with the community to monitor if the project is being used or implemented.

    Projects in marginalized rural areas face the most significant hurdles. Since people in marginalised rural areas are at the very bottom of the pyramid, development efforts should make the most difference in this sector. ICTs have the potential to multiply development effectsand are thus also meaningful in the rural arena.However introducing ICTs in these areas is also most costly, as the following barriers exist:

    Lack of Infrastructure: no power, no running water, bad roads

    Lack of Health Services: diseases like HIV, TB, Malaria are more common.

    Lack of Employment: there are practically no jobs in marginalised rural areas.

    Hunger: hungry users have problems concentrating.

    Illiteracy: Text user interfaces do not work very well; innovative Human Computer Interfaces are required.

    Lack of means to maintain the project: some projects may be left to deteriorate in time because if a component gets broken they are costly to repair and maintain.

    Lack of support from the local government

    Social Contexts: the potential users living in rural marginalized areas often cannot easily see the point of ICTs, because of social context and also because of the impediments of hunger, disease and illiteracy.

    Corruption is one of the factors why it hampers the implementation of the ICT project in rural areas.

    Trainings and seminars must be conducted according the suitable time of the farmers, to make sure that their daily routine for livelihood must be done first.

    Proper applications are not user friendly.

    The World Bank runs Information for Development Program (infoDev, whose Rural ICT Toolkit analyses the costs and possible profits involved in such a venture and shows that there is more potential in developing areas than many might assume.The potential for profit rises from two sources- resource sharing across large numbers of users (specifically, the publication talks about line sharing, but the principle is the same for, e.g. telecentres at which computing / Internet are shared) and remittances (specifically the publication talks about carriers making money from incoming calls, i.e. from urban to rural areas). Remittances are estimated to have a volume of upward of 250 billion USD and websites have been established to take advantage of this fact (e.g. Aryty, Philippines; Mukuru.com, Zimbabwe.

    Lessons learned

    International Institute for Communication and Development video

    What's crucial in making any ICT4D effort successful is effective partnership between four key stakeholders:

    Public sector (governments - from developed nations, developing nations, international bodies, and local governments)

    Private sector (companies belonging to members of the target audience, multi-national organizations wishing to expand their markets to the 4 billion people under US$ 2/day, pro-poor or social companies)

    Informal sector (NGOs, advocacy groups, think tanks)

    Representation from the target audience

    InfoDev have published 6 lessons from an analysis of 17 their pilot programmes (see below). These lessons are backed by a variety of examples as well as a list of recommendations, which should be read by everyone starting an ICT4D project.

    Lesson 1: Involves target groups in project design and monitoring.

    Lesson 2: When choosing the technology for a poverty intervention project, pay particular attention to infrastructure requirements, local availability, training requirements, and technical challenges. Simpler technology often produces better results.

    Lesson 3: Existing technologies—particularly the telephone, radio, and television—can often convey information less expensively, in local languages, and to larger numbers of people than can newer technologies. In some cases, the former can enhance the capacity of the latter.

    Lesson 4: ICT projects that reach out to rural areas might contribute more to the MDGs than projects located in urban areas.

    Lesson 5: Financial sustainability is a challenge for ICT-for-development initiatives.

    Lesson 6: Projects that focus on ICT training should include a job placement component.

    Sustainability and scalability

    A Geekcorps volunteer setting up a Wi-Fi antenna in Mali

    A growing perspective in the field is also the need to build projects that are sustainable and scalable, rather than focusing on those which must be propped up by huge amounts of external funding and cannot survive for long without it. Sustaining the project's scalability is a huge challenge of ICT for development on how the target user will continue using the platform. Development on ICT is not one shot implementation but rather it is a complex process to undertake continuously and the progress of each project revolves around the all-encompassing education for adaptability of the technology

    Also, the so-called "developing" countries, such as India (or other South Asian countries like Sri Lanka, Pakistan, and Bangladesh, as also nations like Malaysia, China, Indonesia, Brazil, South Africa and many others) have proved their skills in IT (information technology). In this context, unless these skills are tapped adequately to build on ICT4D projects, not only will a lot of potential be wasted, but a key native partner in the growth of this sector would be lost. Also there would be unnecessary negative impact on the balance of payments due to imports in both hardware and software.

    Currently, the main two perspectives coming out of this sector either highlight the need for external aid to build infrastructure before projects can touch viability, or the need to develop and build on local talent. Both approaches are, of course, not mutually exclusive.


    Satellite Internet access via VSAT is a common form of connectivity in developing countries (Ghana pictured)

    As it has grown in popularity, especially in the international development sector, ICT4D has also increasingly come under criticism. For instance, questions have been raised about whether projects that have been implemented at enormous cost are actually designed to be scalable, or whether these projects make enough of an impact to produce noticeable change.

    In Sri Lankan journalist Nalaka Gunawardene argues that thousands of pilot projects have been seeded without regard to generalisability, scalability, and sustainability, implying that these projects will always require external funding to continue running and that their impact is limited.This sentiment echoes a 2003 report by the World Bank.

    Further criticism on ICT4D concerns the impact of ICTs on traditional cultures and the so-called cultural imperialism which may be spread with ICTs. For example, young males are tempted to spend their recreational time playing violent computer games. It is emphasized that local language content and software seem to be good ways to help soften the impact of ICTs in developing areas.

    Anriette Esterhuysen, an advocate for ICT4D and human rights in South Africa, pointed out that some ICT4D projects often gives more impetus to how ICT can help its beneficiary economically rather than helping them gain a society where social justice and equal rights prevails. She believes that sustainable development can only be achieved if there is human rights and people can speak freely.

    Another point of appreciation against ICT4D is that its projects are seldom environmentally friendly. Beneficiary communities are often given the responsibility to dispose of the toxic electronic scrap when an equipment breaks down and is under repair. Since transporting the equipment to a recycling facility is costly; the equipment is often disposed of improperly, thus contributing to the pollution of the environment.


    Graph of Internet users per 100 inhabitants between 1997 and 2007 by International Telecommunication Union

    Mobile phone subscribers per 100 inhabitants growth in developed and developing world between 1997 and 2007

    ICT4D projects typically try to employ low-cost, low-powered technology that can be sustainable in developing environment. Desktop virtualization and multiseat configurations are probably the most simple and common way to affordable computing as of 2009.

    ICT4D projects needs to be properly monitored and implemented; the systems should be properly designed and user interface should be suitable to the target users. ICT4D projects installed without proper skill with its beneficiary community has a tendency to fall short of its main objectives. For example, the usage of ICT4D projects in farming sector in third world countries, where a majority of the population are considered to be technically illiterate, projects lay idle and sometimes get damaged or become outdated.

    Furthermore, there should be a line of communication between the project coordinator and the user for immediate response to the query or the difficulty encountered by the user. Addressing properly to the problem will help encourage the user for the interactivity and participation.

    World Summit on the Information Society (WSIS)

    A major event for ICT4D was the twin WSIS (WSIS) - lead organization was the International Telecommunications Union (ITU). The first part of WSIS took place in Geneva, Switzerland in December 2003 (with a large ICT4D exhibition and an ICT4D symposium co-ordinate by infoDev). The second part of WSIS took place in Tunis, Tunisia, in November 2005. One of its chief aims of the WSIS process was to seek solutions to help bridge the so-called " digital divide " separating rich countries from poor countries by spreading access to the Internet in the developing world.

    Perspectives on the WSIS are available elsewhere on Wikipedia, and this covers links to civil society, Tunis 2005, US priorities at WSIS, media responses, Tunis conference developments, roles for business and government, digital divide issues, the digital divide and the digital dilemma, common ground, a civil society study on WSIS, and external links.

    Supplier Relationship Management.

    Supplier relationship management is a comprehensive approach to managing an enterprise's interactions with the organizations that supply the goods and services it uses. The goal of supplier relationship management (SRM) is to streamline and make more effective the processes between an enterprise and its suppliers just as customer relationship management (CRM) is intended to streamline and make more effective the processes between an enterprise and its customers.

    SRM includes both business practices and software and is part of theinformation flowcomponent of supply chain management (SCM). SRM practices create a common frame of reference to enable effective communication between an enterprise and suppliers who may use quite different business practices and terminology. As a result, SRM increases the efficiency of processes associated with acquiring goods and services, managing inventory, and processing materials.

    According to proponents, the use of SRM software can lead to lower production costs and a higher quality, but lower priced end product. SRM products are available from a number of vendors, including 12 Technologies, Manugistics, PeopleSoft, and SAP.

    Supplier relationship management(SRM) is a discipline of working collaboratively with those suppliers that are vital to the success of your organisation, to maximise the potential value of those relationships.

    Once the sourcing (procurement) team has engaged a supplier there is a real need to maintain a balance of control in the new relationship to ensure the benefits of that deal are delivered. Without proper control it has been suggested that the value of a contract can degrade up to 30% in the first year (based upon typical industry benchmarks; post contractual opportunities - reference data: Procurement Strategy Council)

    This not only leads to the failure for delivering the projected on-boarding benefit but also creates frustrating and unsatisfactory relationships which in turn can impact service, cost and the ability to adapt to changing market influences.

    There are of course other benefits to creating robust relationships with suppliers from a customers observation especially if a standalone SRM function exists. Cross category supplier measurement can take place, risk mitigation exercises (both reactive and proactive) can be undertaken and knowledge and innovation can be shared for mutual gain. Equally an SRM function can create a community for the SRMs (or Account Managers, Supply chain Consultants, Supplier Performance Managers) in which they can centralize knowledge and deliver revenue generating opportunities for both parties through the exploration of additional, out of current contract business opportunities (i.e. the quid pro quo of a customer providing discounted goods and /or services to their ‘supplier' in return for improved terms)

    There are a number of published concepts regarding effective SRM, however it is generally accepted as there are a number of key modules or building blocks. These are:

    Supplier Segmentation


    Process and Governance




    Supplier segmentation

    For the development or improvement of SRM, an organization needs to put into action a supplier segmentation approach that considers the internal needs of the business, spend, and also accounts for all risk and business criticality factors. Segmentation traditionally uses 4 categories:

    Commodity: Where little or no SRM activity is undertaken as the suppliers provide infrequent one off goods or services

    Performance Management: Where focus is placed upon cost and service levels as the supplier is providing off the shelf goods or short to midterm services that are not strategically important and are provided from a competitive market environment

    Development: Here focus is placed upon continuous perfection to service levels and cost as the arrangements are more mid to long term, with some strategic value

    Partner: Where strategic long term goods and /or service suppliers are managed to secure supply and drive mutual engagement with shared benefits

    An additional part of Segmentation relates to assessing the 'Power Dependency' of a relationship where approach, strategy, engagement and messaging tactics can be identified for certain types of supplier.


    Executive involvement is critical to the success of aligning the respective organisations strategic objectives and forms the basis of building a partnership and ultimately unlocking value for both organisations. The key challenge is who owns the supplier relationship, with 9 ownership types having been identified.

    Procurement functions should take the central role in coordinating supplier relationships, whilst owning and co-ordinating the process, governance and technology.

    Process and governance

    Organisations have ‘pockets of excellence' of clearly articulated processes and roles often led by the IT function. Organisations have often approach process and governance in a ‘one size fits all' approach and are yet to tailor processes and roles and responsibilities to the different supplier segments.


    Traditionally there has been confusion about SRM solutions available with organizations implement contract management systems or supplier performance management solutions as an alternative (which are still important but not SRM).

    Leading SRM organizations are using SRM technology as the ‘change agent' to get stakeholders and wider business buy in.


    The three key skills required for procurement to implement successful SRM are:

    Market & category knowledge

    Cross-functional working

    Commercial & contractual expertise.

    The current SRM role is viewed as a task to be performed in addition to the ‘day job' and a lot of organizations are yet to implement a Supplier Account Management structure with dedicated resource and set roles and responsibilities.


    Creating the business case

    Executive sponsorship

    Calculating ROI

    Developing a SRM sales pitch

    PC World

    PC Worldis one of the United Kingdom's largest chains of mass-market computer superstores. It is part of DSG International plc("Dixons Stores Group"). PCWorld operates under the brand name PC City in Spain, Italy and Sweden. History

    Vision Technology Group Ltd in November 1991 openedthe first PCWorld store in Croydon. When Dixons Groupplc (now DSGInternational) purchased the chain in 1993, there were four PCWorld stores in existence. There followed a period of expansion as more stores were opened across the country. This expansion was partly driven by a series of acquisitions beginning with DN Computer Services plc in 1996, followed by Byte Computer Superstores Ltd in 1998 and, more recently, MicroWarehouse in June 2004.

    PC World Business was launched in September 1997 in the UK. Since March 2001, PCWorldBusiness has been based in Bury, Greater Manchester and has its own management team.

    PC World today

    The outside of the Southampton Central PC World store in December 2006, carrying the originally proposed "New" logo (The actual new logo is at the top of this page)

    As of 2006, there are 163 PCWorld stores in the United Kingdom and Ireland. Sales in 2004/2005 (including PC World Business) were £1,695 million.

    The stores offer ranges of consumer-oriented PCs, laptops and peripherals, including DSG stores' own-brand Advent and PC Line. Stores also have a "PC Clinic", which offers advice and services. Some stores also have a "Component Centre" area, which contains more basic PC components such as motherboards, hard drives and cases. Most UK stores have a branch of "The Tech Guys ", and also offer consultation to business customers.

    In September 2006, PC World UK assumed management control of its French subsidiary. PCWorld in the UK was also due to undergo a style change at the beginning of 2008, including a new logo, staff uniforms and store layouts as part of its image re-branding programme. The changes have been trialled at the Brentford, Colchester, Portsmouth and the brand new Bournemouth, Southampton, Isle of Wight, Enfield, Burnley and relocated North Shields branches. However current advertisements suggest that the proposed logo had been dropped and replaced with another new logo.

    In late 2006, PC World launched "The Connected Home", selling PC based home entertainment systems and installation services.

    During Easter 2007, PC World launched a magazine advertising many of its services and products. It is called "Magazine" and published by futureplus. The magazine is free to collect from any PCWorld store, and comes out every quarter.

    On 13 December 2007 it was announced that PCWorld will be selling Dell PCs in their stores. This one of many moves Dell are making to sell their Desktops and Laptops to a wider market. This also includes Dell selling their XPS systems in many HMV stores across the UK.

    PC World was nominated for Best Retailer in the What Laptop Mobile Computing Awards 2008.

    PC World opened their first 2-in-1 megastore with Currys at Wandsworth Bridge, Fulham, on the 29th October 2009.


    PC World has attracted criticism in a number of areas. Common complaints include:

    Failure to honour statutory responsibilities under the Sale of Goods Act (see controversies below)

    Sales-oriented culture that pressurizes staff into promoting more expensive goods, regardless of suitability, occasionally with misleading or incorrect information and the use of bait-and-switch (see false advertising below)

    Promotion of goods with misleading or incorrect information (see false advertising below)

    Promotion of extended warranties (also known as insurance and support packages).

    Customers are required to use out-sourced, local rate telephone support for hardware issues or premium rate telephone lines (£1/minute, except for set-up which is 75p/minute) for software issues, unless an extended warranty has been purchased.

    Disparity in pricing between PC World stores, the PC World website and other shops owned by the Dixons group (PC World Will match their web price when quoted.

    Complaints of repairs not being completed.

    Overcharging for repairs and lack of technical competence among technicians from seven sampled stores.

    Similar criticisms have been aimed at other retailers in the DSG group (including Dixons and Currys).

    In 2005, a Which? survey ranked PC World joint last for customer satisfaction.

    In 2006 PC World attempted to get away from its reputation for having sales staff on up to 20% commission who would therefore use high pressure sales tactics with its "One Team" marketing campaign. This involved adverts in major newspapers claiming staff no longer received commission, however this claim is misleading. Staff now receive a bonus based on the performance of the entire store as a whole (up to £200), meaning that pay is still linked to performance. The bonus is also based on other non-monetary metrics, such as customer satisfaction. To compensate the 275 highest earners under the old scheme for reduced bonuses, their basic pay was raised by 16% from around £11,000 to around £13,000 per year.

    In response to the perception that PCWorld staff are often young and lacking in knowledge and communications skills, in 2007 a set of e-learning courses called "The Power of Knowledge" were completed by 6,000 staffand the results were incorporated into their Christmas bonuses as an incentive for staff to improve their knowledge.

    In January 2008, a survey for which revealed that PCWorld was ranked in the bottom ten retailers in the UK.


    In 2005, after 56 complaints from TV viewers, PCWorld was forced to remove an advert that gave misinformation about wireless networking. There have also been numerous other complaints over ads, particularly regarding goods advertised but not actually available in the stores.

    Countries with PC World stores

    United Kingdom





    In Italy, Spain and Sweden the retailer is called PC City.

    PC World Boosts Supply Chain Efficiency by Sharing Trucks

    Feb. 21, 2008 - Graham Wilkie, supply chain director at U.K. electronics retailer PC World, says smarter supply chains are the key to success in a business where products on store shelves are quickly replaced by new and upgraded versions. One way to boost efficiency - from both logistical and environmental standpoint - is to share supply routes with corporate partners, he tells Supply Chain Standard.

    "We are focused on renewable and more generally on sustainability - for example, creating ways in which we can share networks and out-bases [locations a long way from the company's main distribution center] with...Curry's [another electronics retailer owned by the same conglomerate as PC World], so we only need one vehicle between us,'' he says. ''We've managed to achieve a substantial increase in supplier backhaul, which has both reduced empty running and allowed us to take more control of the inbound process.''

    Other sustainability initiatives at PC World include powering road fleets with biodiesel, redesigning delivery trucks to improve aerodynamics, using more roll-cages to reduce the need for cardboard, and returning delivery pallets to suppliers for reuse.

    Dixons Group plc.
    Within their fast moving PC World retail outlets, the Dixons Group were using resources to price goods at the point of sale. They wished to free those resources to devote more time to customers by price labelling goods within the distribution warehouse. The introduction of Opus Voice to control simultaneous picking and price labelling within their warehouse allowed this to be achieved. Increase in productivity allowed both operations to be done without any extra resources.

    To be successful in business, it is just as important to develop good relationships with suppliers as it is with customers. A supplier, with whom you have poor communications, could break the supply chain and cause dreadful supply problems for the delivery of your end product to your customers.

    How do you improve communications with your suppliers - so that the supply chain is always intact?

    Good Communications results in a good Supply Chain

    Using Virtex's C³ommunicator™you can deliver consistent supplier briefings and other communications over the Internet. This ensures that your suppliers know what you want them to know.

    You can get your best presenter to deliver briefings live and encourage questions and answers from your online audience. Those people who are busy at the time it is delivered live can see an archive of it on-demand - 24 hours a day, 7 days a week.

    Your target audience can view the training and presentations from their PCs, their laptops or from some Pocket PCs/PDAs. If they want to review some part of the presentation for greater understanding, they can relook at the archive at any time.

    And you can get lots of feedback - you'll know who attended your sessions, and you'll be able to monitor their progress and understanding of your objectives.

    The costs are low - the returns in good supplier relations are high!

    We all have something of a need, a need for speed, and while most won't have an opportunity to go all Maverick on some MIG-28s somewhere over the Indian Ocean, wecando our best to get the quickest wireless on offer. Last summer, when we stacked the top four mobile broadband cards against each other, we found that AT&T came out on tops for peak performance, and now nearly a year on PC World has come to the same conclusion, finding that Ma Bell offers upload and download speeds that are twice some of the competition. The seven page test splits everything out by city and goes into more details than we'll tire you with here, but do note that all this testing was done in urban areas, so don't forget to double-check the coverage map before you sign the next 24 months of your life away.

    Supply chain organization structure (Business Edition)

    In order to place this business online, the entity in the preceding diagram must be assigned to the following organizations:

    Root organizations: all organizations in the business become descendents of the root organization. As well, the administrators who will maintain the online site, the Site Administrators, are added directly under the root.

    Default organization

    By default, nothing is placed under the default organization.

    Supply chain management organization

    The supply chain management organization is created to own all of the supply chain related organizations (with the exclusion of the organization that owns the suppliers). The supply chain management organization owns the following child organizational units:

    Supplier hub organization

    The supplier hub organization is created to own the supplier hub. The administrators who maintain the supplier hubs functions, as well as administering the supplier organization, are termed channel administrators and are owned directly by the supplier hub organization

    Asset store organization

    The asset store organization is created to own all assets that are used to create stores for suppliers.

    Supplier organization

    The supplier organization is created to own all of the suppliers in the supply chain. A child organization is created for each supplier.

    Supplier organization A, B, C

    A new supplier organization is created under the parent supplier organization, for each supplier store. The administrators who maintain the store's functions are termed supplier administrators and are owned directly by the corresponding supplier organization.

    Buyer organization

    Buyers are given their own organization under the root. All buyers are owned by the corresponding buyer organization.

    Impact of ICT on the supply chain:

    I would be analyzing the various systems used by PC World in the Supply Chain process, will be presenting their basic architecture and discussing their prominence. At this stage, I would be more concentrating on the activities downstream of the value chain. Online purchases account for over 30% of PC World's toplines. I would be presenting the entire cycle right from product presentations on the internet to the transaction being closed. I would be concentrating on the virtual books are affected by these activities.

    Impact on Customer Service:

    At this stage, my research will be pragmatic. Using structured questionnaires, I would be interviewing customers on their purchase experiences. Concentration will be on activities downstream in the process. Though, I would be studying both the instore and online purchases, highlighting will more be on online transactions, due to data mining restrictions within the company. I would be composing my questionnaires on the following most frequently experienced problems (Arthur Anderson, 2000) in purchases:


    Function attributed to.

    Intended item out of stock

    Supply Chain malfunction

    Delivery outside acceptable timelines

    Supply Chain malfunction

    Home delivery too pricey

    Supply Chain malfunction

    Problems with making online purchases

    Supply Chain malfunction (ICT), Corporate Tech Team

    Did not receive confirmation

    Supply Chain malfunction (ICT), Sales Service

    Limited choice

    Supply Chain malfunction, Product Planning, Inventory Management

    Website not user friendly

    Supply Chain malfunction (ICT), Corporate Tech Team

    Non Competitive Prices

    Supply Chain malfunction, Marketing/ Assortment

    Not enough Gift items/ Value adds

    Supply Chain malfunction, Promotion

    Web site doesn't have enough product information to induce a sale.

    Supply Chain malfunction (ICT), Corporate Tech Team

    As can be seen, most of Arthur Anderson's “common problems associated with retail purchases” can be attributed to the Supply Chain malfunction. How much of it is true for PC World is the hypothesis that I wish to discuss.

    Ethical Issues:

    In conducting this study, I would be guided by the Guidelines set out in the British Educational Research Association (BERA) 2004 ethical issues for Educational research. The guidelines state that the researches are wholly responsible to their sponsors, the research community and participants of the research.

    The guidelines states that all research work must be conducted at the highest levels of honesty. Research findings are to be published without falsifying and misstating the work done. The guidelines set out the responsibilities of the researcher to participants of the research, sponsors of the research and the research community. (BERA, supply chain management is important to deliver the products and services to end customers. However, it appears that the notions on supply chain management may only be indirectly associated with the issues surrounding consumer behaviors toward maintaining and/or otherwise pushing customer satisfaction. As referenced in many publications, undoubtedly, the role of supply chain management is an important factor in boosting the organizational success. On a separate perspective, consumer behavior is also an essential factor toward organizational viability into years to come.

    Qualitatively, preliminary studies have been undertaken concerning the connection between supply chain management and customer satisfaction, as well as the connection between consumer behavior and customer satisfaction, in trying to recognize the clear distinctions of each topic toward ensuring customer satisfaction. This paper attempts to bring out the significance of both issues combined in relation to customer satisfaction. If the preliminary studies emphasized in automotive and food industries, this paper attempts to analyze the small and medium enterprises in service industry. It is expected that the increasing roles of supply chain management and consumer behavior in small and medium enterprises are able to improve the overall organizational performance.

    A cluster sampling methods is incorporated in this study to note the characteristics of those small and medium enterprises in certain locations. Variables chosen in this study are mainly covered the traditional SERVQUAL dimensions of tangible, reliability, responsiveness, assurance, and empathy. Aside from the qualitative analyses, which are based on interviews and field observations, a combination of statistical software packages are utilized as tools toward building quantitative analysis of the study. Research is conducted by gathering data from primary and secondary sources in service industries in Jakarta, and Bandung. As stated, it is expected that such studies would reveal the significance of supply chain management and consumer behavior in boosting the customer satisfaction level toward organizations' products and services. It is expected that such issues are mostly true for small and medium enterprises, perhaps.

    Supply chain business process integration

    Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario: the purchasing department places orders as requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain partners can only be fully leveraged through process integration.

    Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information. According to Lambert and Cooper (2000), operating an integrated supply chain requires a continuous information flow. However, in many companies, management has reached the conclusion that optimizing the product flows cannot be accomplished without implementing a process approach to the business. The key supply chain processes stated by Lambert (2004) are:

    • Customer relationship management
    • Customer service management
    • Demand management
    • Order fulfillment
    • Manufacturing flow management
    • Supplier relationship management
    • Product development and commercialization
    • Returns management

    Much has been written about demand management. Best-in-Class companies have similar characteristics, which include the following: a) Internal and external collaboration b) Lead time reduction initiatives c) Tighter feedback from customer and market demand d) Customer level forecasting

    One could suggest other key critical supply business processes which combine these processes stated by Lambert such as:

    1. Customer service management
    2. Procurement
    3. Product development and commercialization
    4. Manufacturing flow management/support
    5. Physical distribution
    6. Outsourcing/partnerships
    7. Performance measurement

    a) Customer service management


    Customer Relationship Management concerns the relationship between the organization and its customers. Customer service is the source of customer information. It also provides the customer with real-time information on scheduling and product availability through interfaces with the company's production and distribution operations. Successful organizations use the following steps to build customer relationships:

    • determine mutually satisfying goals for organization and customers
    • establish and maintain customer rapport
    • produce positive feelings in the organization and the customers

    b) Procurement process

    Strategic plans are drawn up with suppliers to support the manufacturing flow management process and the development of new products. In firms where operations extend globally, sourcing should be managed on a global basis. The desired outcome is a win-win relationship where both parties benefit, and a reduction in time required for the design cycle and product development. Also, the purchasing function develops rapid communication systems, such as electronic data interchange (EDI) and Internet linkage to convey possible requirements more rapidly. Activities related to obtaining products and materials from outside suppliers involve resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage, handling and quality assurance, many of which include the responsibility to coordinate with suppliers on matters of scheduling, supply continuity, hedging, and research into new sources or programs.

    c) Product development and commercialization

    Here, customers and suppliers must be integrated into the product development process in order to reduce time to market. As product life cycles shorten, the appropriate products must be developed and successfully launched with ever shorter time-schedules to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process must:

    1. coordinate with customer relationship management to identify customer-articulated needs;
    2. select materials and suppliers in conjunction with procurement, and
    3. develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the product/market combination.

    d) Manufacturing flow management process

    The manufacturing process produces and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be flexible to respond to market changes and must accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness and efficiency in meeting customer demand. Activities related to planning, scheduling and supporting manufacturing operations, such as work-in-process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites and maximum flexibility in the coordination of geographic and final assemblies postponement of physical distribution operations.

    e) Physical distribution

    This concerns movement of a finished product/service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product/service is a vital part of each channel participant's marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing, thus it links a marketing channel with its customers (e.g., links manufacturers, wholesalers, retailers).

    f) Outsourcing/partnerships

    This is not just outsourcing the procurement of materials and components, but also outsourcing of services that traditionally have been provided in-house. The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a distinctive advantage, and outsource everything else. This movement has been particularly evident in logistics where the provision of transport, warehousing and inventory control is increasingly subcontracted to specialists or logistics partners. Also, managing and controlling this network of partners and suppliers requires a blend of both central and local involvement. Hence, strategic decisions need to be taken centrally, with the monitoring and control of supplier performance and day-to-day liaison with logistics partners being best managed at a local level.

    g) Performance measurement

    Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. Taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can both be correlated with firm performance. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage, logistics measurement becomes increasingly important because the difference between profitable and unprofitable operations becomes more narrow. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. According to experts, internal measures are generally collected and analyzed by the firm including

    1. Cost
    2. Customer Service
    3. Productivity measures
    4. Asset measurement, and
    5. Quality

    External performance measurement is examined through customer perception measures and "best practice" benchmarking, and includes 1) customer perception measurement, and 2) best practice benchmarking.

    Components of Supply Chain Management are 1. Standardization 2. Postponement 3. Customization

    Theories of supply chain management

    Currently there is a gap in the literature available on supply chain management studies: there is no theoretical support for explaining the existence and the boundaries of supply chain management. A few authors such as Halldorsson, et al. (2003), Ketchen and Hult (2006) and Lavassani, et al. (2008b) have tried to provide theoretical foundations for different areas related to supply chain by employing organizational theories. These theories include:

    • Resource-Based View (RBV)
    • Transaction Cost Analysis (TCA)
    • Knowledge-Based View (KBV)
    • Strategic Choice Theory (SCT)
    • Agency Theory (AT)
    • Institutional theory (InT)
    • Systems Theory (ST)
    • Network Perspective (NP)

    Supply chain sustainability

    Supply chain sustainability is a business issue affecting an organisation's supply chain or logistics network and is frequently quantified by comparison with SECH ratings. SECH ratings are defined associal, ethical, cultural and healthfootprints. Consumers have become more aware of the environmental impact of their purchases and companies' SECH ratings and, along with non-governmental organisations ([NGO]s), are setting the agenda for transitions to organically-grown foods, anti-sweatshop labour codes and locally-produced goods that support independent and small businesses. Because supply chains frequently account for over 75% of a company's carbon footprint many organisations are exploring how they can reduce this and thus improve their SECH rating.

    Components of supply chain management integration

    The management components of SCM

    The SCM components are the third element of the four-square circulation framework. The level of integration and management of a business process link is a function of the number and level, ranging from low to high, of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985). Consequently, adding more management components or increasing the level of each component can increase the level of integration of the business process link. The literature on business process re-engineering, buyer-supplier relationships, and SCM suggests various possible components that must receive managerial attention when managing supply relationships. Lambert and Cooper (2000) identified the following components:

    • Planning and control
    • Work structure
    • Organization structure
    • Product flow facility structure
    • Information flow facility structure
    • Management methods
    • Power and leadership structure
    • Risk and reward structure
    • Culture and attitude

    However, a more careful examination of the existing literature leads to a more comprehensive understanding of what should be the key critical supply chain components, the "branches" of the previous identified supply chain business processes, that is, what kind of relationship the components may have that are related to suppliers and customers. Bowersox and Closs states that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement (Bowersox and Closs, 1996). A primary level channel participant is a business that is willing to participate in the inventory ownership responsibility or assume other aspects of financial risk, thus including primary level components (Bowersox and Closs, 1996). A secondary level participant (specialized) is a business that participates in channel relationships by performing essential services for primary participants, including secondary level components, which support primary participants. Third level channel participants and components that support the primary level channel participants and are the fundamental branches of the secondary level components may also be included.

    Consequently, Lambert and Cooper's framework of supply chain components does not lead to any conclusion about what are the primary or secondary (specialized) level supply chain components (see Bowersox and Closs, 1996, p.93). That is, what supply chain components should be viewed as primary or secondary, how should these components be structured in order to have a more comprehensive supply chain structure, and how to examine the supply chain as an integrative one (See above sections 2.1 and 3.1).

    Reverse Supply Chain

    Reverse logistics is the process of managing the return of goods. Reverse logistics is also referred to as "Aftermarket Customer Services". In other words, any time money is taken from a company's warranty reserve or service logistics budget one can speak of a reverse logistics operation.

    Source: Essay UK - http://www.essay.uk.com/free-essays/marketing/supply-chain-management.php

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