Final Draft 203

Cardiff Business School
CARDIFF BUSINESS SCHOOL
MBA
BUSINESS PROJECT
September 2011
MULTIPLE CASE STUDIES: A COMPARATIVE ANALYSIS
OF THE SUPPLY CHAIN MANAGEMENT PRINCIPLES
Submitted by: Aravind Prem
1045529
1

MULTIPLE CASE STUDIES: A COMPARATIVE ANALYSIS
OF THE SUPPLY CHAIN MANAGEMENT PRINCIPLES
A thesis submitted in accordance with the conditions governing candidates for
the degree of
Master of Business Administration (MBA)
In Cardiff University
By
Aravind Prem
Supervisor: Naim Mohamed
September 2011
2

DECLARATION
This work has not previously been accepted in substance for any degree and is not being
currently submitted in candidature for any degree.
Signed……………………………………… (Candidate)
Date…………………………………………
STATEMENT 1
This work is the result of my own investigations, except where otherwise stated. Where
correction services have been used, the extent and nature of the correction is clearly marked
in a footnote(s).
Other sources are acknowledged by footnotes giving explicit references. A bibliography is
appended.
Date…………………………………………
STATEMENT 2
I hereby give consent for my work, if accepted, to be available for photocopying and for
inter-library loan, and for the title and summary to be made available to outside
organizations.
Date…………………………………………
3

Acknowledgement
I would like to express my gratitude to my supervisor Professor Naim Mohamed for all his
kind support and useful advice. Without his support and guidance the completion of this
paper would not be possible.
I would also like to thank the faculty of Cardiff Business School, Cardiff University for
providing me such a wonderful and useful opportunity which has developed my knowledge
as well as skills.
Specially, I would like to express my heartfelt gratitude towards my family and friends for
their invaluable support and patience during the stressful period of the preparation of
dissertation.
Aravind Prem
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Abstract
This study investigates into the basic Supply Chain Management principles with reference to
the case studies of Rolls-Royce, Tesco, Nike and Toyota. The study aim to compare the
existing Supply Chain Management literature with the Supply Chain traditions practiced in
real life. This research is fully carried out as a final business project for the completion of
Masters of Business Administration from Cardiff University. The research is intriguing for
the fact that, a real life comparison of the Supply Chain practices of some of top companies
with the theory is possible.
A hypothesis was developed, synthesising the vast supply chain management literature into
seven principles. A blend of both past and existing literature was utilized to develop the
theory. The research was done in a deductive approach that permitted the researcher to test
this hypothesis. The study found that the hypothesis developed correlated with the reality.
Companies like Rolls-Royce, Tesco, Nike and Toyota are mostly adhering to the theory.
The study revealed that these companies still rely on the tested and proven Supply Chain
Management guidelines. The study also found that not many changes to the Supply Chain
Management principles have occurred over the past decade.
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TABLE OF CONTENTS
Declaration………………………………………………….…………………………………
3
Acknowledgements..............................................................................................................4
Abstract................................................................................................................................5
Table of Contents.................................................................................................................6
List of Figures and Tables.................................................................................................... 9
Abbreviations...........................................................................................................................1
0
CHAPTER 1: INTRODUCTION...................................................11
1.1:
Aim....................................................................................................................................11
1.2:
Objectives..........................................................................................................................11
1.3: Research
Questions...........................................................................................................12
1.4: Research
Structure.............................................................................................................12
CHAPTER 2: LITERATURE REVIEW.......................................14
2.1:
Introduction.......................................................................................................................14
2.2: Supply Chain Management
defined..................................................................................14
2.3: Origins of Supply Chain
Management..............................................................................15
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2.4: Principles of Supply Chain
Management..........................................................................16
2.4.1: Segmenting customers based on service
needs..............................................................16
2.4.2: Customize the logistics network....................................................................................16
2.4.3: Listen to signals of market demand and plan
accordingly.............................................17
2.4.4: Differentiate product closer to the customers................................................................17
2.4.5: Source
strategically........................................................................................................18
2.4.6: Develop a Supply Chain-wide technology
strategy.......................................................18
2.4.7: Adopt a channel-spanning performance
measures.........................................................18
2.5:
Discussions........................................................................................................................19
2.6:
Conclusion.........................................................................................................................19
CHAPTER 3: METHODOLOGY..................................................21
3.1: Research
approach.............................................................................................................21
3.2: Why Rolls-Royce, Tesco, Nike and Toyota as the case studies.......................................21
3.3: Data
Collection..................................................................................................................22
3.4: Advantages and disadvantages of primary and secondary
data........................................23
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3.5: Time
dimension.................................................................................................................24
3.6: Data analysis.....................................................................................................................24
3.7: Limitations........................................................................................................................24
CHAPTER 4:
FINDINGS................................................................25
4.1: Rolls-
Royce.......................................................................................................................25
4.1.1: Company
Information....................................................................................................25
4.1.2: SCM practices at Rolls-
Royce.......................................................................................25
4.2: Tesco
PLC.........................................................................................................................27
4.2.1: Company
Information....................................................................................................27
4.2.2: SCM practices at Tesco PLC.........................................................................................27
4.3:
Nike...................................................................................................................................29
4.3.1: Company
Information....................................................................................................29
4.3.2: SCM practices at Nike...................................................................................................29
4.4: Toyota...............................................................................................................................31
4.4.1: Company
Information....................................................................................................31
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4.4.2: SCM practices at
Toyota................................................................................................31
CHAPTER 5:
DISCUSSION...........................................................34
CHAPTER 6:
RECOMMENDATIONS.........................................36
CHAPTER 7: CONCLUSION........................................................38
CHAPTER 8: REFLECTION........................................................40
REFERENCE...................................................................................43
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List of figures and tables
Figure 1: Supply Chain...........................................................................................................15
Table 1: Cross-sectional analysis of the Seven Principles of Supply Chain
Management.....34
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Abbreviations
SCM: Supply Chain Management
SC: Supply Chain
CFBU: Customer Focused Business Unit
ERP: Electronic Data Planning
EDS: Electronic Data Service
R & D: Research and Development
ICT: Information and Communication Technologies
TIE: Tesco Information Exchange
KPI: Key Performance Indicator
IT: Information Technology
ROCE: Return on Capital Employed
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Chapter 1: Introduction
Supply Chain Management (SCM) was a major paradigm shift in modern business
management, through which organisations now try to manage multiple relationships along
the supply chains (Lambert and Cooper 2000). Traditional purchasing and logistics functions
gave way to the new and improved materials and distribution management now known as
Supply Chain Management (Tan 2001). At present, the term SCM has became the new way
of thinking (Lambert et al 1998), as it provides a much broader and strategic approach to
business management (Croxton et al 2001).
The research tried to explore the basic SCM guidelines and its application in the real world
through established theories, practical perspectives as well as existing practices. To further
improve the quality of the research, a ‘multiple case study approach’ is adopted with
references to the multinational giants Rolls-Royce, Tesco, Nike and Toyota. The study goes
through the various SCM principles and guidelines practiced in these multinational
corporations with respect to the hypothesis developed.
1.1 Aim
The aim of the research is, to investigate, explain and develop the basic SCM principles,
using Rolls-Royce, Tesco, Nike and Toyota as the critical case studies.
1.2 Objectives
The study gives attention to four core objectives. The entire research initiative is designed
deliberately to achieve these objectives as accurate as possible. The objectives include:
1. Research into Supply Chain Management principles prevailing in the corporate world
2. Synthesise the Supply Chain Management literature into certain basic principles
3. Exploring into the Supply Chain Management principles and guidelines presently
going on at Rolls Royce, Tesco, Nike and Toyota.
4. Identify and make recommendations on the real life usability of Supply Chain
Management principles
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1.3 Research Questions
To make the research more focussed and direct, it is indispensable to frame appropriate
research questions for the study. The study has been narrowed down to answer two basic
questions as mentioned below
1. What are the basic Supply Chain Management principles amongst the diverse Supply
Chain Management literature?
2. To what extent do the the existing Supply Chain Management practices of Rolls-
Royce, Tesco, Nike and Toyota differ from the prescriptive given in the literature?
1.4 Research Structure
This research is divided into seven major chapters i.e. Introduction, Literature Review,
Research Methodology, Findings, Discussion, Suggestion and Conclusion. These chapters
are briefly described as follows:
Chapter 1: Introduction gives a brief introduction to the research. This chapter includes the
main aim, objectives, research questions and research structure of the study.
Chapter 2: Literature Review synthesise the vast and diverse SCM literature into seven
basic principles. It also briefly describes about the Supply Chain Management origin and its
development.
Chapter 3: Methodology points out the different methods utilized by the researcher to
conduct the study. This involves the structure of the report, the mode of data collection, types
of data used, how data is analysed and also includes the limitations of the study.
Chapter 4: Findings. Using the multiple case studies of Rolls-Royce, Tesco, Nike and
Toyota as examples, this chapter compared the existing Supply Chain Management
principles practiced by these companies with the theory developed in the literature review.
Chapter 5: Discussion: The whole chapter shows a cross-sectional analysis of the multiple
case studies to analyse and recognise the extent of difference between the existing SCM
principles with the hypothesis developed in the literature review.
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Chapter 6: Recommendations from the researcher after his brief study. After the research,
the researcher found some shortcomings and new things that can be improved.
Chapter 7: Conclusion: This chapter deals with providing the summary to the whole
research. Apart from that, this phase of the research also discusses some of the major
findings and limitations that the researcher encountered.
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Chapter 2: Literature Review
2.1 Introduction
Even though the origin of Supply Chain Management was unclear, after its experimental
introduction in the 1980s the Supply Chain Management (SCM) has gained huge importance
and popularity in business management. The scope of SCM has expanded from
manufacturing businesses to even re-cycling (Croom et al 2000; Habib 2010). With ever
increasing practitioners, academic publications, conferences, professional development
programs and university courses, SCM has now developed into a separate field of study
(Burgess 2006). Recent studies have shown that SCM has played a vital role in facilitating
organisational success for numerous organisations (Storey et al 2006).
SCM facilitates an organisation to survive in a dynamic global market. SCM aims to
integrate activities across and within firms to increase customer value (Sandelands 1994,
cited in Habib 2010). Other than coordinating the activities, SCM also facilitates the
information sharing along the Supply Chain. The concept of SCM views the activities in a
firm as a tightly net chain of events (Helms et al 2000).
Many analysts have already done comprehensive and substantial study on the principles of
SCM. This paper intends to develop a conceptual model on the SCM principles and
guidelines developed by these analysts. The essential idea is to provide a framework of some
of the common SCM principles and guidelines followed by organisations at present. But
despite its popularity there are still gaps in the literature of SCM (Habib 2010). Many authors
have pointed out the lack of a complete conceptual framework of SCM (Storey et al 2006).
SCM owes much of its knowledge to the Purchasing, Logistics, IT and Marketing silos. To
an extent, this has also affected the comprehensiveness of SCM literature (Burgess 2006;
Croom et al 2000).
2.2 Supply Chain Management defined
Different analysts have given different interpretations to the concept of SCM. A
comprehensive definition on SCM is yet to be developed (Tan 2001; Jain et al. 2010). New
and Payne (1995), cited in Tan (2001) describe “SCM as the chain linking each element of
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manufacturing and supply process from raw materials through to the end user,
encompassing several organizational boundaries”. But according to Jain et al (2010)
“Supply Chain Management is the stream of processes of moving goods from the customer
order through the raw materials stage, supply, production, and distribution of products to
the customer”. The definitions on SCM are numerous, but still heated debates are going on
about the one true meaning of the concept. The truth is that all the firm’s posses Supply
Chains. These supply chains gets supplies and components that is transformed into finished
products which in turn is made available to their customers. The process of managing this
chain of events is termed as Supply Chain Management. A Supply Chain is not complete
with just the manufacturer and the supplier; it includes all the stakeholders like retailers,
warehouses, transporters and even customers (Jain et al 2010). Fig 1 depicts a typical
Supply Chain.
SUPPLIERS MANUFACTURER DISTRIBUTORS
CONSUMERS
Fig 1: Adapted from Beamon (1999)
2.3 Origins of Supply Chain Management
Back in the old days, the majority of manufacturers concentrated on mass production as the
main operations strategy to reduce the unit production costs. The system lacked flexibility in
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both product and process. This meant that there was hardly any new product development
happening. Mass production meant inefficient production process, which in turn resulted in
huge investments on inventory. Importantly, the manufacturers did not try to maintain any
close associations with customers or suppliers. After Manufacturing Resource Planning in
the 1970s, manufacturers realized the importance of having a more efficient material
management concept. Also the widespread globalization forced manufacturers to offer low
cost, high quality products with better design flexibility. As the manufacturers strived for
efficiency and started forming strategic partnership with their suppliers, they stumbled across
the concept of Supply Chain Management. Supplier efficiency was broadened to incorporate
cost and quality considerations. Better rapport with the Suppliers was established and a
customer-focus corporate vision was merged into the organisations goals. In the last decade
numerous organisations have adopted the principles of SCM into their organisation. (Tan
2001; Croom et al 2000; Habib 2010).
2.4 Principles of Supply Chain Management
Even though very old, the Seven Principles of Supply Chain Management by Anderson et al
(1997) is still one of the most comprehensive and accepted principles in Supply Chain
Management literature. Anderson et al (1997) presented the Seven Principles of Supply
Chain Management in the first edition of Supply Chain Management Review in 1997. It is
still the most popular article in history of Supply Chain Management Review. These
principles were moulded from the analysis of more than 100 manufacturers, distributors and
retailers. These principles laid the foundation for the future of SCM practices and strategies.
2.4.1 Segment customers based on the service needs: According to Huan et al (2004) close
associations with customers ensures success for any organisation. Other than the
conventional methods of grouping the customers, this principle insisted on segmenting
customers according to logistics and supply chain needs (Anderson et al 1997). Better
customer relationships can be created through gaining detailed knowledge on customer
buying behaviour and designing, building and sustaining a customized supply chains to
satisfy each customer segments (Lummus and Vokurka 2004; Huan et al 2004; Anderson et
al 1997). Huan et al (2004) argue that these customers can be segmented into cost conscious
buyers, time sensitive buyers and others with certain specific requirements. These priorities
improve companies capabilities and maximize the customer impact, which in turn helps to
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achieve and maintain the right balance between service and profitability (Anderson et al
1997).
2.4.2 Customize the logistics network: Lee (2004) points out in his journal “the Triple A
approach” the pivotal role “agility and adaptability” plays in a supply chain. The traditional
strategies used earlier did not allow the full utilization of assets nor gave room for the
necessary segment based modification of logistics networks. By modifying the logistics
network makes the supply chain more responsive to the requirements of a single customer
segment (Anderson et al 1997). At present, firms should posses flexible supply chains to
customize their products to meet individual customer segments amongst the markets and
strategic changes (Lummus et al 2003). There are numerous reasons why these shifts tend to
occur, but for a company to be competitive in the market for long, they have to adapt their
Supply Chains to these shifts (Lee 2004).
2.4.3 Listen to signals of market demand and plan accordingly: Making an effective and
accurate forecast is still a very hard thing to do because of the improbability and complexity
in the Supply Chains (Helms et al 2000). Lee (2004) proved that “alignment” along Supply
Chains can prove fruitful for any organisation. The traditional strategies of forecasting were
inconclusive; they lacked important factors like marketplace and major supplier’s
involvement (Helms et al 2000; Anderson et al 1997). This principle point out the need for
developing a plan, that is both responsive as well as in line with the market signals.
Collaborative forecasting is a concept that is adhering to this principle. According to Helms
et al (2000) “Collaborative forecasting is a SCM concept in which entire Supply Chain is a
participant in the decisions taken”. Collaborative forecasting gathers information from both
the internal and external sources to make better and timely predictions (Aviv 2010). These
principles allow organisations to considerably decrease inventories and lead times while
increasing customer value and forecast accuracy at the same time. Most importantly
collaborative forecasting facilitates and supports Supply Chain Management initiatives of the
company (Helms et al 2000; Aviv 2010; Smaros 2010)
2.4.4 Differentiate product closer to the customer: This principle recognizes the value of
time and stress the importance of firms to be ever vigilant to the market signals. Using this
principle, firms try to delay product differentiation to the very last moment and try to better
understand and control the cycle times (Anderson et al 1997). This principle is closely
related to the Supply Chain tactic “postponement”. Under postponement the final assembly
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or customization is halted until the end market destination or customer requirements are
known (Christopher 2000). Waller et al (2000)states that “postponement allows a company
to be flexible in developing different versions of the product as needed, to meet changing
customer needs, and to differentiate a product or to modify a demand function. This principle
allows firms to function with minimum inventory, give greater flexibility for the company
and makes forecasting easier and much more precise (Christopher 2000).
2.4.5 Source strategically: The principle points out that cost fluctuations for the supplier are
in effect passed down to the customers themselves. A good Supply Chain Management
positively and effectively collaborate with both suppliers and customers for the achieving the
objectives of the supply chain. This is one of the first principles to be implemented in a firm
(Anderson et al 1997).In the words of Sahay (2003. p. 1), “strategic relations between
suppliers, manufacturers, transporters, distributors and customers are going to be the key to
organisational success in the future”. Both internal and external collaboration requires equal
importance (Barratt 2004). Strategically collaborating with manufacturers and suppliers can
yield benefits like new product development, order fulfilment, capacity planning and better
utilization of organisational capabilities. While collaborating with customers ensures
satisfaction of customer requirements (Sahay 2003). The strategies used by companies can
include short-term competitive bids, outsourcing, vertical integration, entering in long term
contacts, strategic supplier relationships, demand planning and inventory replenishment
(Peterson et al 2005; Sahay 2003; Barratt 2004).
2.4.6 Develop a supply chain-wide technology strategy: IT has revolutionized the corporate
world within a very short period. Radjou (2003) cited in Wu et al (2005) argues that
“increasing number of manufacturer are depended on the benefits of IT to improve supply
chain agility, reduce cycle time, achieve higher efficiency, and deliver products to customers
in a timely manner”. Modern Information and Communication Technologies (ICT) helps a
manufacturer to get a summary of the entire Supply Chain and allows the firm to redesign
and manage the Supply Chain to meet the demands. Efficient use of ICT along Supply Chain
can radically reduce the cost and value equation for a Supply Chain (Kumar 2001).
Technology along the Supply Chains guides a firm to accommodate different levels of
decision making and gives a much more accurate analysis of the flow of activities in the
supply chain. Electronic transactions of orders, invoices and payments which considerably
reduce the transaction costs, inventories which can be trimmed through vendor-managed
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inventory programmes are some of the new technology based strategies used in supply
chains (Anderson et al 1997).
2.4.7 Adopt channel-spanning performance measures: For fully integrating a Supply
chain, effective performance measures and metrics are essential. For an effective
management in a Supply Chain clear measurement goals and metrics to be used must be
decided. A balanced approach of both financial and non-financial performance measures
must be done to effectively measure the performance (Gunasekaran et al 2001). These
performance measures are to be applied to every level in the supply chain. Unlike traditional
approaches even the cost of activities and the influence of cost drivers are considered
(Anderson et al 1997). Numerous types of performance measures are now being practiced
across the globe. The key is to select the most appropriate measure for the given situation.
Beamon (1996) cited in Beamon (1999) claims that an effective performance measurement
systems should be inconclusive, universal, measureable and consistent. Neely et al (1995)
cited in (Beamon 1999) categorised performance measures into quality, time, flexibility and
cost.
2.5 Discussions
From the seven principles of SCM principles many new and modified strategies and rules are
being practiced in the present market. According to Tan (2002) “Firms facing the intense
competition from international market have now downsized, started focusing on their core
competencies and are now emphasizing on effectively managing all the internal and external
value adding activities”. Kekre et al (1995) cited in (Shin et al 2000) states that many firms
have now ignored the traditional practices of using different sources of supply to the new
concept of reducing the supplier base for better efficiency and trust. Suppliers are now being
viewed as a near extension of the firms themselves (Tan 2002). Organisations have now
giving more emphasize on managing internal competencies through aligning with the
stakeholders along the Supply Chain (Tan 2002).SCM practices like collaborative
forecasting, on-time delivery, reducing response time, collaborating SC members, locating
closer to once customer, creation of well-suited information sharing system etc are now
transforming the way business was once run (Tan et al 2002).
2.6 Conclusion
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The Seven Principles of Supply Chain Management serve as a base for future SCM
management practices and principles (Anderson et al 1997). Many successful SCM
principles and practices are derived from these seven principles. The principles and guideline
of the SCM are vast and can be viewed from many different perspectives, which makes it
very difficult to synthesize. SCM has become a sophisticated field with numerous principles
and strategies making a review on the literature very complicated and incomplete at times.
Lambert and Cooper (2000) cited in Chen and Paulraj (2004) claim that “SCM represented
one of the most significant paradigm shifts of modern business management by recognizing
that individual businesses no longer compete as solely autonomous entities, but rather as
Supply Chains”. The view of SCM has evolved from just an extension of logistics into a
system that integrates all the functions and activities of Supply Chain that goes beyond
logistics (Cooper et al 1997).
Even though there is a lot of research done for improving the business operations of SCM it
is a fact that no relevant academic researches is done on SCM. The literature on Supply
Chain Management is closely related to the literatures of purchasing, supply management,
transportation and logistics (Habib 2010). Supply Chain Management principle indicates the
different perspectives of the field. But the success of a Supply Chain Management lies in the
flawless coordination of all the stakeholders of the Supply Chain (Tan 2001). Now, new
researches are done to unite knowledge-based and supply chain perspectives. This will have
a far more impact on existing supply chain literature (Croom et al 2000).
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Chapter 3: Research Methodology
Research is a rigorous and intentional search undertaken to establish a fact, a theory, a
principle or an application (Kumar 2008). It is not just a process of collecting information, it
is all about answering the unanswered or creating something entirely new (Goddard and
Melville 2007). According to Advanced Learner’s Dictionary of Current English cited in
Kumar (2008, p. 2) “research is a careful investigation or inquiry especially through search
for new facts in any branch of knowledge”. Every researcher follows a particular method of
doing the research, which according to Ethridge (2004, p. 4) “provides the principles for
organizing, planning, designing and conducting research”. In this research, a particular
methodology was adopted, and is discussed below.
3.1 Research approach
The research embraced the ‘hypothetico-deductive approach’ by setting up a research
process that permitted the researcher to test the hypothesis developed. The research was done
through checking whether the hypothesis correlated with the reality (Hayes 2000).
The research attempts to analyse whether the theories on Supply Chain Management
principles are actually practiced under real-life conditions in Rolls-Royce, Tesco, Nike and
Toyota. For this type of research it is more practical and useful to follow a ‘pragmatic
approach’ rather than an explanatory or descriptive approach to get the desired answer
(Haneline 2007).
The research is also done as a ‘multiple case study method’, which is greatly useful in
yielding more robust findings and conclusions for the hypothesis developed. This allowed
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the researcher to evaluate and understand the similarities and dissimilarities between the
cases (Baxter, P and Jack, S. 2008). Here the researcher tries to analyse whether the basic
Supply Chain Management principles prevail in multinational companies like Rolls-Royce,
Nike, Tesco and Toyota.
3.2 Why Rolls-Royce, Tesco, Nike and Toyota as the case studies?
The multinational giant Rolls-Royce is a very powerful and innovative company, who is a
legend in the business world (Peter 1997). Tesco is one of the biggest and profitable
supermarkets in the world. Tesco.com is presently the biggest online supermarket in the
world (Datamonitor, 2004). Tesco was also awarded the prestigious ‘Supply chain
excellence award’ in 2007 (Supply Chain Excellence awards 2011). When it comes to
Toyota, the whole concept of ‘lean’ thinking was invented by Toyota to outperform its
competitors (Kennedy and Brewer 2006). Many believe that the new SCM strategies
implemented by other companies are trying to imitate the old Toyota’s strategies (Cox 1999).
The global supply chains of Nike are legendary for their efficiency and flexibility (Locke et
al 2007). Being world leading multinational organisations valuing the process of Supply
Chain Management, Toyota, Rolls Royce, Tesco and Nike are ideal candidates for discussing
the principles of Supply Chain Management.
3.3 Data Collection
The research is a combination of both primary and secondary data and therefore it amounts
to both ‘field research’ and ‘desk research’ (Sugandhi 2003). Data can be classified into
quantitative and qualitative data (Anderson et al 2009). For satisfying the aims and
objectives of this study only qualitative data is considered.
For developing the hypothesis and the literature framework of the research, already existing
literature on Supply Chain Management and its principles were considered. Secondary
qualitative data obtained from different journals and research papers are analysed and
interpreted to formulate the theory. These journals and research papers were accessed from
the Cardiff University electronic database resources. Some of the major online databases
utilized are ScienceDirect, EBSCO Business Source Premiere, Swetswise, and Emerald. The
key journals that supported the research were: Supply Chain Management Review,
International Journal of Operations and Production Management, International Journal of
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Productivity and Performance Management, Harvard Business Review and European
Journal of Purchasing and Supply Management.
But most of the findings and discussions came from the analysis and interpretations of
annual reports and official websites of Roll-Royce, Tesco, Nike and Toyota. Primary
qualitative data are obtained from these annual reports and websites. The major annual
reports and websites were Rolls-Royce Annual Report 2010, Nike Annual Report, 2011,
Tesco PLC: Annual Report and Financial Statements 2011 and Toyota: Toyota in the world
2011. A small proportion of secondary data was also considered to formulate the discussions
and findings.
3.4 Advantages and Disadvantages of Primary and Secondary data
According to Morgan and Summers (2005), the advantages of primary data include:
1. Precision
2. Reliability and credibility
3. Capable of dealing with every research question
While the disadvantages include:
1. More expensive
2. Skill of the researcher
3. Time-consuming
The advantages of secondary data:
1. Less costly
2. Less time-consuming
3. Doesn’t need any expert researcher skill
While the disadvantages of Secondary data include:
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1. Less reliable
2. Inappropriate units of measurement
3. Inappropriate data formats
4. Good interpretation and analysis skills required
5. Data can be outdated
So, this research has tried to absorb these advantages and nullify these limitations by using a
hybrid of both primary and secondary data. This is done to explore the SCM principles and
their effect on companies in real life, more in depth and to ascertain their relationship in a
more productive manner (Ward and Wilkinson 2006).But primary data collected directly
through questionnaires and surveys would have yielded much better and accurate results.
This was a major limitation of the methodology that has adversely affected the research.
3.5 Time Dimension:
The research considers the principles and strategies used by Roll-Royce, Nike, Tesco and
Toyota regarding its SCM activities. It is a research that explores into the SCM practices that
are used in the firms over a period of time, as well as at particular points of time. So it has to
be said that the research follows both longitudinal as well as cross-sectional models of study
in respect to the time horizon (Babbie 2010).
3.6 Data Analysis:
This research constantly tried to compare the basic SCM principles theory to the various
real-life SCM practices and principle followed in companies. Thus, amongst the two
different ways of evaluating qualitative data, the research adopts ‘constant comparison
method’. The research first tried to establish the boundaries of the theory and then the actual
hypothesis was developed. After the hypothesis was developed certain other categories and
their properties was incorporated into the study. Finally comparisons are made with events
appropriate to each category (Dye et al 2000).
3.7 Limitations:
25

There are certain limitations for this research. Firstly, the Supply Chain Management arena is
a very vast and diverse topic, which can be viewed from different perspectives. When
synthesising the diverse principles of SCM into seven basic principles, the
comprehensiveness of the principles cannot be guaranteed. Secondly, due to the lack of data
available in the company websites and annual reports, detailed comparisons were not
possible. Thirdly, the time constraints have affected the quality of the research. A thorough
research required more time. Fourthly, relying only on data from company websites and
annual reports were insufficient to make convincing findings. Finally, lack of prior
scholarship on the topic as well as inexperience of the researcher has also influenced the
quality of the research.
Chapter 4: Findings
This chapter is entirely committed to elaborate the SCM principles by evaluating the various
practices and principles currently practiced in the present business environment. To make a
more robust and complete analysis, the research conducts multiple case study analysis of
Roll-Royce, Tesco, Nike and Toyota. This study tires to explore into the famous Supply
Chain strategies and principles, practiced by these multinational companies
4. 1 Rolls-Royce:
4.1.1 Company Information
With more than 36,000 employees spread over 48 different countries, Rolls-Royce is one of
the most successful and reputed companies in the world (Tiwari 2005). As stated in the
annual report of Rolls-Royce (2004) cited in Tiwari (2005), Rolls-Royce has one of the most
powerful and innovative SCM department, since the company manufacture only 30% of its
final products and procures the rest from its capable suppliers. Rolls-Royce certainly follows
most of the SCM principles mentioned in the literature review.
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4.1.2 SCM practices at Rolls-Royce
Supply Chain Segmenting of Customers: Adhering to the SCM principle, in Rolls-Royce
demand is broken down into segments with each having its own characteristics and trends
(Bramham et al 2004). Rolls-Royce uses customer focused business units (CFBU) and
Electronic Resource Planning (ERP) to integrate internal business information with
information from external sources to segment the customers and different markets (Yusuf et
al 2004).
Customizing logistics network: Rolls-Royce is an international firm which sources goods and
services from around the world. Since specialised suppliers for producing high technology
products and specialized methods of production are very limited, Rolls-Royce gets their
supplies from international companies while the other requirements are filled in by the local
supply market in the countries and areas where Rolls-Royce operates (Rolls-Royce 2011).
Contrary to the SCM principles, Rolls Royce, like certain other manufacturers outsource
some of their inventory management and logistics operations for concentrating more on their
core competencies (Vaidyanathan 2005). Thus Rolls-Royce has a flexible supply chain that
is responsive to the customer segments and sudden shifts in the market.
Listen to the market signals and planning accordingly: Forecasting in Rolls-Royce is done
based upon integrating the analysis and projection of market trends with the information
gathered from suppliers and other counterparts of the organisation (Bramham et al 2004). For
long-term forecasting, as per the SCM principle Rolls-Royce efficiently integrates the
internal and external information gathered from various sources.
Differentiate Products: Rolls-Royce production systems are designed using the six sigma
principles and top-end lean manufacturing processes and technology (Rolls-Royce 2010).
New ‘lean’ technologies like Foreign Object Damage preventive processes, direct part
marking and smart tools etc are used in Rolls-Royce to reduce wastage and lead time as well
as improving the quality of products (Rolls-Royce 2008). Rolls-Royce follows the SCM
guidelines of bringing products closer to the customers and at the same time minimising lead
time through following the lean manufacturing methods.
Source strategically: Close association with the suppliers is maintained in Rolls-Royce,
since most of the manufacturing is done by external suppliers. Rolls-Royce deliberately
makes efforts to motivate its suppliers to work more openly and collaboratively. Rolls-Royce
27

persistently strives for better ways of collaborating with its suppliers over variety of
activities. The collaboration with supplier in Rolls-Royce includes research and
development, product design, manufacturing and even after sales services (Rolls-Royce
2011). Rolls-Royce fully adheres to the SCM principle of sourcing strategically.
Supply chain-wide technology strategy: Rolls-Royce is regarded as the epitome of hi-tech
and modern technology providers. Rolls-Royce uses new world-leading technology and
developments in the field of IT to improve efficiency and quality in the organisation. Rolls-
Royce has incorporated these technologies to produce hi-quality products unmatched by its
competitors (Rolls-Royce 2011). But the IT department of Rolls-Royce is outsourced to
Electronic Data Services (EDS). EDS make sure of the development of IT systems as well as
providing IT resources and IT consultants to Rolls-Royce. By outsourcing the IT department
to a specialised hand, Rolls-Royce achieves efficiency and at the same time gives
opportunity to concentrate more on core areas (Yusuf et al 2004). Even though Rolls-Royce
is outsourcing IT, it makes sure that an efficient supply chain-wide technology strategy is
maintained at all times.
Performance measures: Rolls-Royce uses a variety of performance measures along its
Supply Chain to measure its performances. A wide range of financial and non financial
measurements are used to determine performance in every level, including both group and
departmental performances. Rolls-Royce utilizes these performance measures to examine
both current performance and investment potential to sustain and improve future
performances. These performance measures measure underlying revenue, cash flow, training
and development, engine deliveries, R & D and capital expenditure (Rolls-Royce 2008;
Rolls-Royce 2010).
4.2 TESCO:
Tesco is one of the largest and most profitable retailers in the world with sales of over 33,000
million and 220,000 employees under its payroll. Tesco is also the largest online grocery
retailer in the world (Woods 2007). At present, Tesco functions across 14 countries across
Europe, Asia and North America (Tesco PLC 2011). Tesco is especially very dominant in
UK, overcoming almost every other competitor in UK grocery market. Tesco plc has now
28

diversified its activities into certain other non-food sectors like telecommunications, banking
and insurance (Wearden 2010).
4.2.2 SCM practices at Tesco
Supply Chain Segmenting of Customers: The success of Tesco is greatly depended on its
superior supply chains and close association with its customers (Tesco PLC 2008). From the
analysis of Tesco’s 10 million Clubcard holders, Tesco has segmented its customers as finer
foods, healthy segments, traditional, convenience, mainstream and price sensitive. Each of
these segments is designed to target the specific upper, middle or less affluent markets.
Tesco has gone on to create brands that target these particular segments such as Tesco Value
that is targeted at price sensitive customers, Tesco Finest and Tesco Fair Trade targeted at
the upper market segments (Coriolis Research 2004).
Customizing logistics network: The innovative and flexible logistics capabilities of Tesco
have been one of the crucial aspects of Tesco’s success story. From direct delivery by the
suppliers to the retail stores to centralized distribution, Tesco now uses a ‘vertical
collaboration strategy’ along its supply chain. Vertical collaboration in the supply chain
involved better information sharing and electronic trading capabilities. Vertical collaboration
of the Tesco’s supply chain allowed Tesco to fully utilize its asset and gave the opportunity
to customize its supply chain to satisfy each customer segments (Fernie and Sparks 2004).
Listen to the market signals and planning accordingly: Not much data is available on the
exact forecasting strategies of Tesco, but the company understands the customers and their
needs very well. Practices such as ‘better promotional forecasting’, enabled through good
monitoring processes in stores assures high levels of availability in stores. (Tesco PLC 2011.
p. 23).
Differentiate Products: Contrary to the SCM guidelines of using agile ‘postponement’
strategy, Tesco follows the ‘lean’ concept of thinking. Lean techniques have helped Tesco to
grow into the most dominant retailer in UK. Tesco used lean consumption principles to
satisfy customers by giving them what they want and gaining their loyalty in turn (Truch
2006). Tesco uses Lean Six Sigma strategies and principles at a strategic and operational
level across their whole value stream to bring products closer to their customers (Westwood
and Silvester 2007).
29

Source strategically: Tesco claims to have a proactive approach towards its suppliers.
Periodical meetings and associations with Suppliers, processors and manufacturers like
Producer Clubs, Annual Supplier Viewpoint survey and leading edge knowledge groups are
maintained. Suppliers are rewarded for maintaining sustainability and fair trade
performances in their work (Tesco PLC 2011). But in reality, suppliers are revolting against
Tesco for forcing suppliers to reduce prises. The suppliers claim that Tesco is making
aggressive demands and forcing the suppliers to accept Tesco’s demands without any
leniencies (Davey, 2008). This shows that Tesco is not sticking to the SCM principles in
reality. Rather than collaborating with its customers Tesco is forcing their demands and
propositions on to the reluctant suppliers.
Supply chain-wide technology strategy: As Rowley (2003) cited in Rowley (2005) states,
“Tesco is renowned for their reputation of being innovative in their use of Information
technology solutions”. Tesco uses the latest Information Technology along its supply chains.
For fast transaction of trading information with its suppliers Tesco created Tesco Information
Exchange (TIE), which facilitates online transaction of trading information on a real time
basis (Williamson et al 2004). Tesco is one of the top retailers who use systems that allow
product suppliers and third-party logistics firms to exchange trading information online
(Bourlakis and Bourlakis 2005).
Performance measures: Tesco utilizes a set of financial and non-financial indicators to
measure its performance for the year. Tesco calls these performance measures as Key
Performance Indicator (KPIs). These KPIs evaluate how successful Tesco are in meeting
their corporate objectives for the targeted year. These Performance indicators includes Sales
and profit growth, ROCE, Total share return, Net indebtedness, Reduction in CO2 emission,
dividend paid etc are used by Tesco as performance indicators (Tesco PLC. 2011. p. 52-54).
4.3 NIKE:
Nike is one of the world’s largest and profitable global marketers of athletic footwear,
apparel and equipment. Their products are unrivalled in the rest of the world. Directly or
indirectly employing nearly one million people, spread across six continents and operating in
more than 160 countries, Nike is a global giant. Established in 1964 by Phil Knight and Bill
Bowerman, Nike over time became one of the largest and profitable organisations in the
30

world with annual revenues over 19 billion dollars. The famous ‘Niketowns’ functioning
across the globe attract millions of customers every year (Nike, Inc. 2011).
4.3.2 SCM practices at Nike
Supply Chain Segmenting of Customers: Nike maintains a close association with its
customers. When it comes to segmentation, Nike is one of the best companies,
manufacturing footwear, apparel and equipments for numerous customer segments (The
Pragmatic Marketer 2007). Nike appeals particularly to the sports market. Nike segments its
customers according to geography, gender and even the particular sports they are in. To
satisfy each customer segment Nike has products tailor-made to fit for football, running,
women, basketball, golf, skateboard, snowboard etc. Nike also produces shoes which the
customers can design according to their preferences, thus reaching out to the customers
(Nike, Inc. 2011).
Customizing logistics network: Even though Nike sells numerous amounts of sports shoes, it
doesn’t manufacture any of its products. Nike uses their international network of outsourcers
to manufacture their products for them (Tompkins et al 2005). Nike coordinates this
complicated and vast supply chain like a network of suppliers and customers spread across
the globe. Manufactured products coming from Asian countries are distributed from a central
location in Europe to the vast corners of the world (Dintzen and Bohlbro 2010). Nike
customizes its logistics networks to collaborate with the Nike’s corporate logistics group and
the four main regions where it functions. This allows Nike to be in contact with the
customers at all times (Van der Vorst et al 2006). Nike has customized its global logistics
network to supply quality products across the world in the most efficient of ways.
Listen to the market signals and planning accordingly: In June 2000, Nike introduced the
automated forecasting system which forecasted the demand of the company for that year. It
was a huge mistake that cost the company dearly. Relying only on automated predictions,
Nike suffered huge losses in money, stock value and reputation. The automated system was
not able to coordinate with the existing system, which meant that large amount of product
information was not utilized. The forecasting was not responsive and in accordance with the
market signal. This caused huge pile up of unwanted products and lack of required and
popular Nike products (Worthen 2003, cited in Ross 2004). Nike presently uses a
31

collaborative forecasting model, which synchronise supply chains to create customer value
(Simaupang et al 2002).
Differentiate Products: One of the main objectives of Nike is to bring the products closer to
the customers. For further reaching out to the customers, Nike offers mass customization.
This allows the customers to choose options of style, like preferred colour, fabrics, motto,
text etc within the restrictions set by the organisation (Graeml and Csillag 2009). Since mass
customization is based on the basic principles of postponement (Feitzinger and Lee 1996),
Nike is following a postponement supply chain strategy to bring products closer to the final
consumer.
Source strategically: Nike is a multinational company with more than 830 suppliers spread
across the world. Nike educates and collaborates with its suppliers on a regular basis,
conducting regular audits and pointing them to the right directions. Regular inspections by
Nike’s in-house compliance specialists are done in the manufacturing facilities of its
suppliers (Locke et al 2007). Nike intentionally maintains a close contact with both line and
management level of its suppliers. Production specialists from Nike are sent to the supplier
companies to work in tandem with the line management of the suppliers and the supplier
managements are also given participation in the annual reviews of Nike’s top management
(Varshney and Gupta 2000).
Supply chain-wide technology strategy: Nike utilizes and maintains the latest technologies in
the field to keep itself up-to-date and efficient. Nike is heavily relied on their latest
Information Technology to operate their Supply Chain. This includes product design,
production, forecasting, ordering, manufacturing, transportation, sales and distribution. The
latest IT systems are used by the supply chain systems to manage and sustain the inventories
and the constant shipping of products (Nike, Inc 2011). Some of the IT efforts of Nike
include Data Centres, End-user commuting, PC power management, Asset recovery and
disposal, distance collaboration etc (Nike, Inc 2010). Thus Nike is one of the world’s most
innovative and effective users of technology in their supply chains.
Performance measures: Nike uses different metrics and balanced functional scorecards to
effectively judge past performances. The performance measurement strategy of Nike is a
constantly evolving one. The performance measures adopted by Nike examine the service
and value offered by the firm, company’s internal and external performances and finally its
32

innovations. Key performance indicators include both financial and non-financial
measurements (Lohman et al 2004).Some of the key financial measures include Revenue
Performance, EPS Performance, Return on Invested Capital, Stock Performance and
Revenue Distribution (Nike, Inc 2011)
4.4 TOYOTA
Arguably the most powerful, biggest and innovative of all automakers in the world, Toyota
offers full range of models, from small cars to large trucks. Operating in more than 170
countries, employing over 300,000 people, Toyota is a goliath in the automotive industry.
Toyota sold more than 7,000,000 units in 2010 with sales expected to rise in 2011 (Toyota
Motor Corporation 2011). But what set Toyota apart from other companies are their
legendary and innovative supply chain management practices in the field. It is argued that
most of the supply chain management practices adopted today by different industries try to
imitate the strategies pioneered by Toyota (Cox 1999).
4.4.2 SCM practices at Toyota
Supply Chain Segmenting of Customers: Toyota is a company that has always strived to
satisfy the needs of every customer segment. Toyota has brands and products specifically
designed to satisfy certain segments of the markets. For example, introduction of Prius, an
environmental friendly hybrid car which was launched in 2000 was intended for specific
consumer segments like technophiles and conservationists (Lee, 2004). And targeting high-
end consumers, Toyota introduced a new brand Lexus in 1989, offering high quality
products at prices closer to lower-end markets (Kim and Mauborgne 1998). These shows the
Toyota’s close association with its customers.
Customizing logistics network: The logistics system of Toyota is one of the most flawless
and innovative of all organisations in the world. In case of uncertainties and unexpected
challenges, their logistics and supply chain network is designed to be both agile and
adaptable at the same time. Amidst the various uncertainties of the market, the huge success
of Prius was only made possible because of the impeccable agility of Toyota to spot market
trends and its ability to adapt its logistics network to those changes (Lee, 2004).
33

Listen to the market signals and planning accordingly: Toyota is a company that constantly
pay great attention to changes in the market trends and demands. They plan their strategies
for each product based on these market observations (Lee, 2004). Toyota keeps a keen eye
out for all the changes happening to both the internal and external environment. After the
earthquake and subsequent tsunami in Japan on March 2011, production in Toyota was
seriously hampered. So, Toyota raised its annual profit forecasts well below the market
estimates. To counter this loss in production, Toyota implemented ‘unrestricted production’
ahead of previous forecasts. Over time and extra shift were given to employees to boost
production (Kim 2011). This shows that when uncertainties arise and market trends change,
Toyota understands these changes and takes quick, appropriate measures to tackle these
uncertainties head-on.
Differentiate Products: Toyota always pay attention to the latest market trends and
consumer demands. Toyota is a flexible company, capable of supplying different versions of
its products as and when needed. Toyota invented the lean philosophy, but it also uses
postponement strategies to increase the agility of the company (Yang et al 2004). For
example, top management of Toyota now and then delay certain decisions and provide only
partial information to its suppliers, while at the same time searching for numerous prototypes
(Boone et al 2007)
Source strategically: Toyota considers automobile manufacturing as a joint venture between
the supplier and the company. Mutual trust and mutual benefits with long term relationships
with its suppliers and dealers is one of the main principles of Toyota (Toyota Motor
Corporation 2009). The Toyota production System and Total Quality Control activities are
taught to the suppliers for developing the suppliers both in the lower-level and upper-level
(Sako 2004). Toyota heavily relies on its suppliers for product development and design while
Toyota concentrates on major core areas of the organisation. This is possible only through
the close long-term collaboration of Toyota with its suppliers (Yang et al 2004).
Supply chain-wide technology strategy: Toyota utilizes some of the most innovative and
latest technologies available in the world to create an efficient and unique production and
distribution system, unmatched by any other automobile companies. The new product
development and production system developed by Toyota is capable of producing a brand
new car in less than 18 months, in contrast to the 30 months needed for its fastest U.S.
competition (Bloodgood and Salisbury 2001). With new and improved principles on Just In
34

Time (JIT) production technology, Total Quality Management, Toyota Sales Marketing
Systems etc, Toyota is tries to integrate new technology and improved principles along its
supply chains (Amasaka 2002).
Performance measures: Performance measurement in Toyota is not a sophisticated process.
The company doesn’t have complicated metrics measuring performance along its supply
chain. Simple metrics are used by the company to measure the performance on the lower
levels, but not on the top levels. The performance measures of Toyota include global
performance measures, operational performance measures and stretch improvement metrics.
Both financial, quality and safety measures are utilized by the company. In Toyota, if
anything is done, it is done correctly. So, even the basic output measurements and metrics
are done correctly and precisely (Liker 2004).
Chapter 5: Discussion
Table 1: Cross-sectional analysis of the Seven Principles of Supply Chain Management
The Seven
Principles
Rolls-Royce Tesco Nike Toyota
Supply Chain
Segmenting of
Demand broken down
into segments. Uses
Precisely follows the
principle, segmenting
Segmentation based
on geography, gender
Segment customers
based their particular
35

Customers
internal and external
sources to segment
customers
customers based their
particular service
needs
and sports service needs
Customizing
logistics
network
Outsource logistics
operations to
concentrate on core
competencies
Possess a flexible and
responsive logistics
network that is
customized.
Outsource logistics
network. Coordinates
the Supply Chain
network.
Possess a flexible and
responsive logistics
network that is
customized.
Listen to the
market signals
and planning
accordingly
Collaborate
Forecasting. Blend of
information for
forecasting
Lack of data. Uses
better promotional
forecasting to
anticipate customer
demands
Follows the
collaborative
forecasting model
Collaborate
Forecasting. Blend of
information for
forecasting
Differentiate
Products
Six-Sigma and Lean
manufacturing process
Follows Lean
techniques
Uses both Lean and
Agile (postponement)
strategies.
Uses both Lean and
Agile(postponement)
strategies
Source
strategically
Close collaboration
with the Suppliers
Close collaboration
with the Suppliers
Close collaboration
with the Suppliers
Close collaboration
with the Suppliers
Supply chain-
wide technology
strategy
High integration of IT
and technology along
Supply Chain
Supply Chain
Supply Chain
Supply Chain
Performance
measures
Uses Sophisticated
matrices and
performance measures
Uses Sophisticated
matrices and
Uses Sophisticated
matrices and
Uses Simple matrices
and performance
measures
From the table, it is evident that when it comes to collaboration with the suppliers and
maintaining a supply chain-wide technology strategy, all the companies show great
enthusiasm and care. Evidence suggests that companies are taking deliberate efforts to work
together with their suppliers, who are spread across the globe. Also it is intriguing to find
involvement of the suppliers in the manufacturing companies is increasing rapidly.
Companies like Rolls-Royce and Nike outsourcing is also in favour of this principle. It is
also apparent that these companies greatly rely on high levels of IT and technology for the
day to day functioning of the firm. High level of technological integration is done along the
supply chains of all these companies. Without these technologies firing in all cylinders,
supply chains all these organisations would not move an inch.
But when it comes to differentiating products closer to the customers and adopting a
‘postponement strategy’, Toyota and Nike follow the principle. Even the inventor of lean
strategy, Toyota now uses both lean and agile concepts but Rolls-Royce and Tesco still
doesn’t follow this, they follow only the lean strategy. It may be because of the fact that the
industry demands these companies to follow the lean concept.
While looking at measuring the performances of the companies for the current year, it is
evident that all the companies use different financial and non-financial performance
36

measures with sophisticated matrices and functional scorecards. But it was very interesting
to see that Toyota uses only the basic matrices and performance measures apart from the rest.
Toyota seems to think that measuring the performance of the company is a simple process
and doesn’t require sophisticated performance measures.
While following the principle of segmenting customers based the supply chain needs apart
from Nike, who still uses the traditional segmenting methods, the rest seemed to favour the
principle. Although lack of evidence forbids from making a decisive conclusion, the
available data suggests that Rolls-Royce, Tesco and Toyota follows the principle. No
detailed information on the forecasting strategies of the companies was available. So, no
conclusive comparisons can be made, except for Nike which follows the collaborative
forecasting strategy.
It was also interesting to find that companies like Roll-Royce and Nike outsource their
logistics operations. This allows these companies to concentrate more on their core
competencies but doesn’t follow the basic supply chain principle
Chapter 6: Recommendations
Through the research it was apparent, to what extent SCM practices in organisations differ
from the actual SCM literature. To make the SCM principles in organisation more
successful, the research puts forward certain key suggestions. The researcher anticipates that
adhering to these suggestions can greatly benefit an organisations success. These critical
suggestions are discussed below:
i. Throughout the research it was evident that SCM literature was incomplete and at
times vague. Appropriate academic researches on SCM literature will shed more light
37

on to the subject and can give a much better understanding of the SCM capabilities in
the present and for the future.
ii. Most of the companies still think that Supply Chain Management is just an extension
of the logistics department rather than as a separate body of knowledge. It is necessary
to establish that SCM goes beyond logistics. This is only possible through developing
SCM as a separate system that incorporates all the functions and activities of the
Supply Chain.
iii. Even now, most of the companies still segment their customers based on the traditional
methods like gender, price and interests. By segmenting the customers based on the
logistics and supply chain needs, organisations can greatly improve their capabilities
and customer impact in the market.
iv. Apart from Nike and Toyota, the rest of the companies still utilize only the ‘lean
concept’ of thinking. Even the inventor of lean concept, Toyota has adopted agile
strategies to stay flexible in market. It will be a great benefit to companies like Tesco
and Rolls-Royce to integrate agile thinking into their supply chains.
v. All the companies under the research greatly relied on the diverse capabilities of IT for
almost all the SCM functions. But the researcher feels that this trend of relying only on
IT, to make critical Supply Chain decisions can cause devastating results. The
automated forecasting system of Nike is a good example. The researcher proposes that
ultimate decisions regarding the business and SCM functions must be done manually
in view of the IT information.
vi. Companies like Rolls-Royce and Nike are outsourcing their logistics operations for
short term benefits. For the long term success of these organisations these companies
must handle their own logistics operations for themselves.
vii. No detailed data is available on the Supply Chain Management initiatives of these
major organisations. If companies are ready to disclose more SCM knowledge that
they possess, it would help a lot of other struggling organisations and SCM literature in
general.
viii. Tesco’s relations with their suppliers are very fragile at the moment. Tesco cannot
succeed in the market in the long run if they are not cooperating with their suppliers.
38

ix. Most companies still rely on the traditional but tested and proven concepts of SCM.
But for the long term success of the companies in the future, these companies must be
open to the new concepts and strategies emerging all around them. Companies like
Rolls-Royce, Tesco, Nike and Toyota should lead the way in introducing and accepting
new concepts and ideologies in the Supply Chain Management.
Chapter 7: Conclusion
The research has gone through a detailed analysis of the Supply Chain Management
principles and its applicability in a real life scenario with reference to case studies on Roll
Royce, Tesco, Nike and Toyota. The research has scrutinized numerous SCM literatures with
diverse aspects of the topic, starting from definitions and evolution to synthesising the SCM
literature into seven basic principles. The research was conducted in a scientifically framed
39

methodology that adopted the hypothetico-deductive approach. A blend of both primary data
and secondary data collected from journals, official company websites, annual reports and
valid web sources are combined to frame the study.
The literature review of the study was entirely framed from secondary data collected from
journals alone. Through the literature review, a hypothesis was developed. The ‘Seven
Principles of Supply Chain’ developed by Anderson et al (1997) formed the backbone for the
literature review. The researcher found that most of the new supply chain management
principles were only modifications of the theory developed by Anderson et al in 1997. New
concepts and strategies of SCM are integrated and amalgamated into these seven principles
to make the principles more comprehensive.
The SCM practices of Roll Royce, Tesco, Nike and Toyota are thoroughly examined and
compared to the SCM theory developed in the literature review. In the discussion part, a
pragmatic research approach is adopted to check the comparability of the SCM practices and
guidelines to the seven basic principles mentioned in the literature review.
The comparisons revealed that, all of the companies still follow most of the seven basic SCM
management principles. It was really intriguing to see that even after all these years and
numerous developments in the field, the basic principles of the Supply Chain Management
mostly remain the same. But it was also worrying that no fresh principles and strategies are
used in companies at present.
But the research faced a list of challenges such as lack of relevant data, different
organisational cultures, diverse literature, inadequacy in transfer of ideas, obsolete data etc.
The careful analysis of these challenges gave rise to the certain suggestions. These
suggestions mentioned in chapter six makes the study more comprehensive.
Even after all the careful analysis and following a well defined methodology, certain
limitations persists in the study. Limitations such as inexperience of the researcher, lack of
detailed information on the existing practices within the company and time constraints
occurred during the course of the study. Also the ‘black swan effect’ clearly affected the
study.
But the researcher feels that the study is comprehensive and relevant with a high level of
integrity. The recommendations suggested can benefit both the companies and the Supply
Chain Management literature. The study will help to bridge the gap between the SCM
40

literature and the existing principles and processes prevailing in Rolls-Royce, Nike, Toyota,
and Tesco.
Chapter 8: Reflection
This chapter is a reflection of the experiences, knowledge and skills acquired by the
researcher in the course of this research. This report also includes the challenges and
difficulties faced by the researcher during this research. This study is done to on completion
of Masters in Business Administration from Cardiff University. The research was a very
41

demanding and challenging phase that tested the limits my limits. This chapter also try to
reflect the crucial academic elements that helped me in completion of the said research.
The research was done utilizing numerous theories, concepts and lessons acquired from the
different modules of study from the MBA course. The operational analysis module gave me
the inspiration to pursue the operational and logistics specialization and in turn do the project
on the Supply Chain Management. I was really intrigued by the process modelling and
operations management lectures which helped me to do the project in turn. The ‘international
business’ module gave invaluable firsthand knowledge about the globalization, multinational
corporations and their strategies which was instrumental in the development of the research
into multinational corporations like Rolls-Royce, Tesco, Nike and Toyota. The ‘study skill’
lectures about ‘critical thinking’ were particularly helpful in collecting and using reliable,
quality data for the research. The lectures taught me to be curious, even-handed and flexible.
It taught me to consider the multiple facets of a particular topic rather than focusing on a
single aspect. The concept of mind mapping from the lectures was also very helpful. The
strategic management module helped the research in planning ahead and focusing on the key
functional areas of the study. It also gave a brief knowledge regarding the corporate
strategies which was greatly beneficial for the research.
But the major areas of the research which helped were the operations and logistics lectures in
the third semester. The sessions on supply network strategy and operations strategy analysis
of Rolls-Royce from the strategic operations management and lean operations module were
reflected in the research. Knowledge acquired from all these lectures helped me to excel in
my project.
Translating the theory from the module to the project was a little harder than I anticipated.
Transferring theory into actual project without altering its integrity and clarity was hard. But
the researcher found that the intensive training and guidance received over the MBA course
was decisive in overcoming this challenge.
I truly feel that without the experiences, skills and mindset I gained over last year during the
MBA, I would have never completed the study. The individual assignment I did for the
‘International Business’ module gave the initial experience inside the international supply
chain and how it works. The research was so intriguing for me and motivated me to choose
the topic of Supply Chain Management for my final business project. The business plan was
42

also especially helpful. It was my first experience of a real-life project and taught me to think
independently and at times to be unorthodox to obtain the desired results. The assignment of
strategic operations management module where I did the assignment on the strategic
operations strategies of Tesco was crucial for my research.
I did not have any experience before joining the MBA in Cardiff University. I had never
even done a project or even an assignment before coming to Cardiff. I cannot point out all
the exact detailed experiences I gained from the MBA because somehow over the duration of
the course it moulded me to be capable of doing a decent research paper.
Doing a dissertation was an entirely different and a very demanding experience for my
limited experience and skills. It was entirely different from doing a 1000 or 2000 word
assignment. The research had to be more original and demanded more quality, integrity and
in-depth study than an assignment. When the research went deeper into the topic I felt my
skills were insufficient to complete the research. The invaluable help and supervision from
my supervisor Mr. Mohammad Naim, was the crucial element that helped me to complete
this research. He was very helpful and guided me throughout my dissertation. When I got
strayed from my original study, he guided me into the right path. If it wasn’t for him, I would
have never completed the project.
This research has instilled in me immense confidence in myself and my ability. At the start
of this research I was confused and constantly doubted my ability as a researcher and as a
student. Through this research my research skills and knowledge in the topic of Supply
Chain Management has expanded enormously. My ability to search, find and interpret
knowledge regarding a particular subject has evolved into a whole another level that I never
expected to reach. I have never felt this kind of ultimate sense of achievement that I feel right
now. The skills and knowledge I learned from this institution and in doing this project will
greatly benefit me in my future career. I am sure that the self confidence, sense of
achievement, the skills acquired, patience, flexible thinking and above all the dedication to
my work I gained during the course of this research will help me to build a strong and
illustrious career in business management.
Now that I had done a project, if I had the opportunity to do a project again I would like to
do an internship in a company while doing the project. Because this will be an even more
demanding and challenging task and the work will be even more accurate, real and valuable.
43

Total Word Count: 9919
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56

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