An essay on supply chain management of Cruise International Inc.

Supply chain management is a challenge and industries are constantly responding to the present and changing demands. The essay is going to present the pressure or load on service organization like cruise international Inc. to adopt new supply chain management. Today’s customer indicates more on excellent customer services, different varieties, high quality, lowest price, and quick delivery. To succeed in the challenging market, service organizations are trying best to meet consumers in an effective manner. There is an increasing number of passenger that is above 39.6 billion according to data presented CII statistic. CII is seeking the techniques of supply chain management in maintaining an assured and adequate supply of entertainment equipment, mechanical equipment, food product, retail merchandise to maintain business to have a competitive advantage. CII expects they can meet their ultimate expectation on their ship or out of the ship by giving thrilling amusement and for that, they are seeking supply chain management. CII not only keep in mind the satisfaction of customer but also a partnership with suppliers and purchase procurement (Burf, 2009).

Christopher (2016) indicated supply chain management is a process of integration that manages product, information, the point of consumption and cash flows with maximization of consumer satisfaction and minimization of organization’s total cost. Supply chain management generally involves suppliers, manufacturers, retailers, consumers, service providers, and distributors. From fast few years it has been noticed competition among service organizations (cruise companies) are increasing due to horizontal differentiation and variety of offerings. In CII context, four dimensions for competition in the company include the quality of service, the time of cruise, booking process and the itinerary. Though focusing investment and effort on supply chain management is not crucial to maintaining heavy standards, these maintain balance to address supply chain management, achieve the right balance between efficiency and speed (Compton et al., 2005). 

Supply chain management involves a series of processes and activities that are efficient like doing it in the first right for meeting the requirements of the customer. From the overview of supply chain management’s seven rights, it can be portrayed as ability that guarantees the ordered products and services are placed in the right amount, to the right place, at the right cost, at the right time and with the right quality (de Menezes, Wood, and Gelade, 2010). Supply chain management is defined as two or more companies are directly connected by downstream and upstream flows of services, products, information, and finances. Supply chain management concept for Cruise Company outlines fulfillment of seven rights including accomplishing perfect order, confirming availability of preferred product, processing order correctly, shipping order, advanced shipping notification with tracking number, delivering complete order without damage and on time and billing correctly. CII’s interest to supply chain management has a mission that can be addressed as expanding clients deal with decreasing working cost and inventory (Rudzki and Trent, 2011). CII emphasizes more on manufacturing plant at first that is part of where the company can minimize working and inventory cost. CII’s need for effective flows of supply chain management and in there company and supplier have a vested interest in cash flow and financial flow. The more concepts are seven principles of supply chain management that covers supply chain initiatives and strategies. The seven principles are segmenting customer according to service needs, customizing logistics network, listening market signals, differentiating product, managing sources of supply management, developing supply chain-wide technology and adopting the channel-spanning status measure. 

Applications of supply chain management are adapted in CII along with concepts to design business strategy as SCM is regarded as a bank of organizations to reduce inventory costs and delivery costs. This organization found satisfactory results from the application of supply chain management that why it relay ob the principles of supply chain management. CII could use the form or application of SCM in such areas like fuel supply, food supply, port services, consumable supply, and warehousing near harbors and entertainment so that client gets best experiences from the services. CII realized they need to provide the accommodation service and the service can be provided to the customer by application of supply chain management (Harrison, Lee, and Neale, 2005). For this service management, CII use other business like partnering with a hotel company to provide accommodation service to a customer that can be pointed to as supply chain management. Again ticket selling service can be provided to the customer by building a partnership with tourist and travel agencies. Today financial and insurance service can be provided with making a chain with suppliers and these services can be provided from CII by building a chain relationship with tourist and travel agencies. Same to these applications, services including cruise maintenance, technical repairs, and cruse’s electronic equipment, maintaining cruise, machinery maintenance, lubricant, information technologies, and internet can be settled with another business which companies are specialized in these factors. But there have another objective or mission of CII’s supply chain management are allocating service responsibility to specialized business organizations so that customer can get a better experience to stay on the cruise. The supply chain management is the core of business especially to reduce operation cost. 

Human resource management is a part to have success in the service industry to get employee loyalty and satisfaction. Personnel training and staffing are important for any service organization and here CII to make concentration on customer’s demand. As the human resource is an asset to the organization, a strong human management will help create customer experience for that training is needed there. Training positively impacts on employee’s productivity with resulting high employee satisfaction. Employee management through training creates opportunities for employees to broaden skills and knowledge so that employees can achieve development and individual growth by engaging in efficient teamwork (Schniederjans and Olson, 1999). In cruise service organizations, the employee received training have a higher level of satisfaction and development of competencies as training programmes assist to improve skills, employee commitment, loyalty, and professionalism. CII found human resource management is needed for managing employees on the ship and in multiple harbors. All applications of supply chain management in CII require the collaboration of partners through building supply chain and improving trust. The great collaboration system increases flexibility for CII to supply product or service to remove serious problems from the operation. CII is waiting for a big change in business operation. 

Partnership with suppliers by CII is referred as a core operation of supply chain management needs for the company to serve best services to clients. Today business world completes most of the task through outsourcing. Outsourcing is the best method to minimize the production cost and customer service cost though outsource is the organization’s noncore function. In partnering with suppliers, the first task for CII is to identify the partners those can provide the services at the perfect time, in a specific location and with quality (Kildow, 2011). CII should assess the strategy of partnership with suppliers as a long-term strategy because partners in the supply chain need to be easy and flexible to business. Short term goal and relationship do not carry any significance for business organization and in here these are also important for CII to make sure that its customer is getting all services in right time, at the right place and with the right quality. The returns from the supply chain management operation are closely related to reward and here CII must ensure that its supply chain and operation are aligned with the reward structure.  Reward system and return system can be measured with building policy, contract and procedure between supply chain partners that encourage suppliers to encourage delivering the better services. 

Supplier’s practices and policies must be agreed and aligned with applicable regulations and laws including freedom of association, benefits and wage, working hours, aggregate haggling, child labor, forced labor, ecological practices, and wellbeing and security. Another advantage of partnering with suppliers is being socialization in where business relation and decision are influenced by social events to establish a right condition in contract and transparency on pricing as well as in providing services to the customer (Drake, 2012). 

Supply chain partnership provides CII strategic factors to extend strong business operation and improve the extensive delivery at lower or expected cost in just in time. Just-in-time is a big operational activity in supply chain management in where the organization can provide services without physical presence whenever customer demands from any location. Some issues in business operation provide more importance to supply chain partnership and the issues are solving the joint problem, information sharing, compensation sharing, decreasing in operating costs, decreasing in coordination, providing financial risk and non-financial risk. The issues are dealing in supply chain management partnership to have a quick reaction to customer and market needs. The important thing for CII is the business is going to utilize the synergy power that will make business success and provide greater output (Gunasekaran, 2007). 

Harris, Harris, and Streeter (2011) indicated the benefits of supply chain partnership are noticed in an organization like financial performance. With an example is strategic supply chain partnership between manufacturers and suppliers to have earmarked performance and competitive advantage. The collaboration of CII and partners will carry significant growth in organizational profits as these strategies avoid adversarial working environment and relationship. There evaluating processes, system, inventories, equipment utilization and cost of methodologies are reducing the expense of enhancing management and operation in exploring partnership opportunities and quality of operation. CII already has received some benefits in accessing new markets and enabling its growth in the geometric rate that becomes more praiseworthy for CII. Other benefits of CII are accessibility to tools and resources, modern technologies and effective training to be productive business organization through the expertise of supply chain management. Hope that CII can place advantageous payment schedules and terms, larger orders, fuel growth and more booking of customers without extra investment (Ke, 2012). 

Another important issue for CII that it faces a conflict of ethical issues or interests in purchasing function as in supply chain CII is a part of another company or supply chain partner of another company (Mentzer, 2001).  Becoming partners in the supply chain can raise conflicts from extending business courtesies, arising from external contracts, affiliations with the non-profitable organization and involving in political, professional, academic and private interest.  Private interests from business organization create more conflicts of ethical issues in the form of investment, partnership, board membership, and shareholding. 

Utilizing an unethical way of cultivating of the position of supply chain partners like impelling someone to give undue advantages to them raise conflicts. Another one is potential conflicts emerge from the budgetary connection, business, and family. In the situations, a business expert or supply chain management expert must follow the codes and principles of corporate governance to maintain a safe and strategic relationship with suppliers so that conflicts cannot arise (Wilkins, 2012). To avoid such types of conflict CII must introduce or cover some areas like employer policies, conflict of interest, entertainment, gratuities, gifts, product samples, political matters, market power, the specification of standards and advertising (Corporate governance of non-listed companies in emerging markets, 2006). 

CII seeks to improve supply chain management with a variety of products on the ship and on land ship services by following the strategy of building a supply chain partnership. Supply chain partnership in CII will increase more strength to reduce total operating cost and improve service quality. CII faces some conflicts of interest and ethical issues and there policy and standard of supply chain management should be followed to minimize the effect. CII must be effective in utilizing the tools of supply chain management in operation and delivering services to the customer. 

Reference 

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Christopher, M. (2016). Logistics and supply chain management. Harlow (England): Pearson.

Compton, W., Fanjiang, G., Grossman, J. and Reid, P. (2005). Building a better delivery system. Washington, D.C.: National Academies Press.

Corporate governance of non-listed companies in emerging markets. (2006). Paris: Organisation for Economic Co-operation and Development.

de Menezes, L.M., Wood, S. and Gelade, G., 2010. The integration of human resource and operation management practices and its link with performance: A longitudinal latent class study. Journal of Operations Management, 28(6), pp.455-471.

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Harrison, T., Lee, H. and Neale, J. (2005). The practice of supply chain management. New York: Springer.

Ke, Y. (2012). Coordinating the optimal discount schedules of supplier and carrier. Waterloo, Ont.: University of Waterloo.

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Rudzki, R. and Trent, R. (2011). Next level supply management excellence. Ft. Lauderdale, Fla.: J. Ross Pub.

 Schniederjans, M. and Olson, J. (1999). Advanced topics in just-in-time management. Westport, Conn.: Quorum Books.

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