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Strategic Supply Chain Management & Innovations in Logistics – Lenovo Case Study

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Strategic Supply Chain Management & Innovations in Logistics – Lenovo Case Study

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The under mentioned paragraph is an extract from an article published by Robert Handfield, Ph.D., Executive Director of the Supply Chain Resource Cooperative, in a Q&A session with John Camp, Director, Logistics Solutions and Transformation at Lenovo in 2013

 Big issues in global logistics

Rob Handfield: Hi, I’m here with John Camp, director of logistic solutions and transformation at Lenovo. John manages a lot of the logistics for Lenovo globally and is clearly exposed to a lot of the issues that we’ve been talking about at this conference. John, what do you see as the big challenges, the big issues in global logistics today for Lenovo as you continue to operate globally in all the different markets that you do?
John Camp (Lenovo): One of the key things we are concerned about in the logistics world is increasing the flow of information, not only the physical movement of goods, as our network becomes more complex and becomes more time critical. We’re also very focused on the increase of information and managing the level of complexity that we have in our information chain as well.

 Complexity issues with exchanging information

Rob Handfield: I wondered if you could give us some examples of some of the complexities that you see in terms of exchanging information. Is it time zone issues? Is it the format of the data? Is it being able to work with governments, with suppliers, with multiple parties, or maybe all of the above?
John Camp: It literally is all of the above, although most of our concerns right now are being able to build a community, collaborate with our suppliers, our customers, and with our in-house peers. That’s a real critical initiative for us today in managing the flow of information and really shaping our technology road map and some of our key strategic initiatives.

 Key initiatives to managing the flow of information

Rob Handfield: I wonder if you might share with us some of the key initiatives that you have today at Lenovo as you seek to be able to manage the flow of information, as you seek to manage big data, and as you try to manage all of the complexity that exists in your global logistics system.
John Camp: Sure, we have a number of initiatives. We want to get closer to our customers, so we’re spending a lot of time and our energies on our customer experience and all of the interactions that we have with our customers, making those an improved differentiator for us in terms of the way our customers deal with us, and then extending that all the way back through our own manufacturing and production resources, all the way through to our suppliers. So for us it’s a challenge of connecting all of the nodes on the supply chain, not only physically but through information. We have a number of initiatives that are focused on customer service and operational aspects of that to run our ever-increasing, ever-complex network.


 Emerging technologies, mobile devices, and the horizon

Rob Handfield: Do you see any emerging technologies on the horizon that you think will be important to be able to deal with these things? Whether it’s integration of mobile devices, GPS technology, software as a service, performance analytics as a service, the kinds of things that you read about for instance in a Gartner report. Are you looking at all of those potential things on the horizon?
John Camp (Lenovo): Sure, we definitely are. I think that one of the biggest challenges right now in the supply chain is dealing with all of the information that we have to manage. So, clearly the trend toward big data and improved analytics clearly are on our minds. Moving to the cloud and being able to build a community with our partners and with our customers that gives all access to a single version of the truth is really important to us right now. And we’re really shaping our strategy from a technology and from an internal strategic planning perspective.
Think purchasing and procurement and often what comes to mind is the struggle or battle to make a supplier give you materials or services for the lowest amount of money possible.
However, as global growth stalls and companies are forced to control costs to generate profit, sourcing and procurement could take center stage.
It won’t, however, be about beating up suppliers for every penny. Instead, procurement’s new role will be to forge new relationships with suppliers and increase collaboration. As our friend Chuck Intrieri likes to say, collaboration is at the heart of successful supplier relationship management.

REQUIRED

a) Critically evaluate the logistic strategies that Lenovo is following, and the challengers being faced in the case study whilst unpacking the definition of logistics.

b) List suggestions to further improve the logistic strategies at Lenovo, especially in the light of the current, global Covid–19 pandemic.

Additional information

Table of Contents

a. Challenges faced and Strategies implemented by Lenovo
i. Handling the increasing flow of information
ii. Network complexity and Time criticality
iii. Information Complexity and Data format
iv. Ability to work with multiple stakeholders and overcome time zone issues
b. Suggestions to further improve the logistic strategies at Lenovo
i. Re-evaluate sourcing options
ii. Elevate distribution capacity
iii. Social Distancing
v. Enhancement of Network
vi. Vendor Tail Management
vii. Training and Development
viii. Improve modes of Communication
References
Preview

a. Challenges faced and Strategies implemented by Lenovo

Logistics and Supply Chain Management (SCM) definitions have evolved over years, while clarifying different focuses and perspectives by practitioners in different industries, geographic regions and functional departments and backgrounds (Stock and Boyer, 2009). Li (2014) defines logistics as the process of management of goods between the place of origin and the point of consumption, such as goods from customers or companies. Nevertheless, logistics is the overall operation of handling and organizing physical flow of information within an organization, between the organizations and its partners (Tlaty and Moutmihi, 2015). Furthermore, transportation is an important factor of logistics. Moreover, Tlaty and Moutmihi (2015) describes that logistics also includes demand planning, orders processing, supply, planning, production, customer and supplier relations, storage, handling, assembly, packaging and product packaging.

In the case study, Camp emphasizes that logistics is becoming an important feature in supply chain and the strategic plans of the company which could highlight competitive advantage. When discussing on the challenges of logistics, Camp iterates about elevating the flow of data amidst the complexity of the Lenovo’s information chain.

In the world of logistics, there are many things to factor in when you are seeking to improve on efficiency and effectiveness. One of the key challenges is handling the increasing flow of information.

i. Handling the increasing flow of information

Logistics is not merely the movement of goods. There is also a vast and unseen flow of information. Further, as time passes, the amount of information that is interchanged, between parties, only increases. It is the burden of Lenovo to handle this ever-increasing flow. For an instance, when an end customer orders a product from Lenovo, there are several data that the company needs to consider. Such as;

• Which product, out of my range of products, has the customer ordered?
• Is this product legally allowed to be shipped to the location of the customer?
• Which is the warehouse which is closest to the customer’s location? (Considering that Lenovo has several warehouses located world-wide)
• Is this product in stock in that warehouse currently? If not, what is the ETA for me to make this product available to be shipped to the customer?
• Are there any detailed packaging requirements that the customer has requested this product be packed in?

All of this information needs to be communicated and documented in a concise manner. The strategy that Lenovo seems to have utilized is to manage their data and information in data management platforms. This allows them to manage all their data, with authorization matrixes in place, for different levels of users. Thus, they can scale up in the case of an increase in their flow of information.

Another challenge faced by Lenovo is the Network complexity and Time criticality.

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