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CARIBBEAN MARITIME INSTITUTE
DISL FINAL PROJECT (Literature Review)
SUBMITTED BY
SHELDON ROSE
SUPERVISOR
MRS. JOHNSON
The effects of Supply Chain Management, Migration Patterns & Industrialisation and how they
impact each other and the world.
2014
Contents
ABSTRACT ............................................................................................................................................ 4
INTRODUCTION ................................................................................................................................... 5
Supply Chain Management .................................................................................................................. 5
Industry & Industrialization.................................................................................................................. 8
Migration .......................................................................................................................................... 13
Statement of the problem ................................................................................................................... 14
Research questions and hypothesis..................................................................................................... 15
Conclusion ........................................................................................................................................ 16
LITERATURE REVIEW ...................................................................................................................... 17
Introduction ....................................................................................................................................... 17
Dynamics of the Supply Chain ........................................................................................................... 19
Historical developments .................................................................................................................... 21
Migration Theory .............................................................................................................................. 29
Historical theories ............................................................................................................................. 32
Industrialization ................................................................................................................................. 35
Congruence ....................................................................................................................................... 36
METHODOLOGY ................................................................................................................................ 37
Introduction ....................................................................................................................................... 37
Sampling Techniques......................................................................................................................... 37
Data Collection .................................................................................................................................. 38
INSTRUMENTATION ........................................................................................................................... 39
RESULTS ............................................................................................................................................. 41
Introduction ....................................................................................................................................... 41
Presentation of Data........................................................................................................................... 41
Conclusion ........................................................................................................................................ 42
References ......................................................................................................................................... 43
ABSTRACT
Supply Chain Management (hereafter referred to as SCM) has had a profound effect on
the world as we know it, but its effects are nothing new. It would seem in fact that much of the
world as we know it today is as a direct result of not exploration but SCM. When Christopher
Columbus left Spain in search of new trade routes to India he was in fact seeking to secure a
more effective transportation route with his suppliers. When the Romans embarked upon
spreading their Empire it was simply mergers and acquisitions, all required elements of any well
managed Supply Chain Network. These changes however were not unaffected by other changes
taking place at the same time, because in fact the wealth of these nations were increasing as their
industries changed from agrarian to industrial to an early form of service industry. They sought
to find a cheaper more agreeable labour force (slavery) and a plentiful supply of natural
resources (colonization).
These activities caused a shift in the distribution networks for raw materials and finished
goods, colonies produced raw materials and supplied the colonizers who manufactured finished
goods. The paradigm shifted several times throughout history as SCM took a foot hold. From the
migration of finished goods manufacturing in the United States from Chinese raw materials to
the shift in finished goods manufacturing in China exporting finished goods to the United States.
These activities are not random and are all correlated, large container movers, new ports, canal
expansion, skilled labour migration are all as a result of Supply Chain Management.
INTRODUCTION
Supply Chain Management
(David Simchi-Levi, 2003) defines Supply Chain Management (SCM) as “a set of approaches
utilized to efficiently integrate suppliers, manufacturers, warehouses and stores, so that
merchandise is produced and distributed at the right quantities, to the right locations, and at
the right time, in order to minimize system wide costs while satisfying service level
requirements”.
Supply Chain Management (SCM) as a discipline has its roots in Operations Management,
Logistics & Inventory Management, the words did not have meaning until (Oliver, 1982) gave
life to the term and defined it as “the process of planning, implementing, and controlling the
operations of the supply chain with the purpose to satisfy customer requirements as efficiently as
possible. Supply chain management spans all movement and storage of raw materials, work-in-
process inventory, and finished goods from point-of-origin to point-of-consumption”. Since this
time many others have coined similar definitions but all follow certain fundamental
characteristics, the sourcing and procurement of goods, their transportation, storage and delivery
to the customer in the most cost effective, timely manner.
For the purpose of this paper I will limit the scope of SCM to four of its fundamental constituents
namely:
Procurement
Logistics
Inventory & Warehousing
Distribution & Customer Service
Procurement
Also known as purchasing is a primary function in many organisations, procurement may be
defined as ‘the process or related processes involved in securing goods or services, at agreeable
terms, prices and conditions for the benefit of the organisation’. Procurement may involve the
following activities more or less:
Supplier Analysis
Cost Volume – Profit Analysis
Price Negotiation
Legal & Regulatory
Supplier Analysis
In today’s business environment it’s not good enough to simply buy goods or services from
anyone, organisations have been known to crumble because of association firms of ill repute.
The practice of Green Business/ Sustainable Business1 is paramount and suppliers of goods and
services as well as procurers of them must adhere to these requirements and global standards.
Suppliers must be able to supply goods or services in the correct quantities & consistent quality
in the shortest possible timeframe with the best terms of payment. The supplier must meet or
exceed basic financial requirements such as good standing with banks and working relationships
with government regulators.
1 An enterprise to be that has minimal negative impact on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies.
Cost Volume – Profit Analysis
Cost Volume – Profit Analysis (CVP) ‘shows the relationship between cost and volume, and how
changes in either affect the operating and net income of a company. Commonly called break-
even analysis, cost-volume-profit analysis is used to calculate the production level needed for
revenue to equal fixed costs. The internal managers of a firm are the only ones able to use
information produced from cost-volume-profit analysis.’ (Johnson, 2013)
Price Negotiation
After the CVP analysis is complete the buyer may want to negotiate the price and establish the
terms of payment. During this process the buyer seeks get the lowest price possible and establish
favourable payment terms which will free up capital. The buyer seeks to sell for the highest price
possible and wants to sell the most goods he can to ensure a long production run and take
advantage of economies of scale.
Legal & Regulatory
Many goods require both export and import permits, phytosanitary certificates and other legal
requirements for payment of fees for the import or export of goods. The legal requirements of
payment are also looked at whether they be for letter of credit from banks both receiving and
sending
Industry & Industrialization
Industry is the production of an economic good or service within an economy. Manufacturing
industry became a key sector of production and labour in European and North
American countries during the Industrial Revolution, upsetting
previous mercantile and feudal economies. This occurred through many successive rapid
advances in technology, such as the production of steel and coal. Following the Industrial
Revolution, perhaps a third of the world's economic output is derived from manufacturing
industries. Many developed countries and many developing/semi-developed countries (People's
Republic of China, India etc.) depend significantly on industry. Industries, the countries they
reside in, and the economies of those countries are interlinked in a complex web of
interdependence.
Industries can be classified in a variety of ways. At the top level, industry is often classified into
sectors: Primary or extractive, secondary or manufacturing, and tertiary or services. Some
authors add quaternary (knowledge) or even quinary (culture and research) sectors. Over time,
the fraction of a society's industry within each sector changes.
Figure 1 Clarke's Sector Model
In the 18th and 19th centuries, the UK experienced a massive increase in agricultural
productivity known as the British Agricultural Revolution, which enabled an unprecedented
population growth, freeing a significant percentage of the workforce from farming, and helping
to drive the Industrial Revolution.
Sector Definition
Primary This involves the extraction of resources directly from the Earth, this includes farming, mining and logging. They do not
process the products at all. They send it off to factories to make a profit.
Secondary This group is involved in the processing products from primary industries. This includes all factories—those that refine metals,
produce furniture, or pack farm products such as meat.
Tertiary This group is involved in the provision of services. They include teachers, managers and other service providers.
Quaternary This group is involved in the research of science and technology. They include scientists.
Quinary
Sector
Some consider there to be a branch of the quaternary sector called the Quinary sector, which includes the highest levels of
decision making in a society or economy. This sector would include the top executives or officials in such fields as government,
science, universities, nonprofit, healthcare, culture, and the media.
Due to the limited amount of arable land and the overwhelming efficiency
of mechanized farming, the increased population could not be dedicated to agriculture. New
agricultural techniques allowed a single peasant to feed more workers than previously; however,
these techniques also increased the demand for machines and other hardware, which had
traditionally been provided by the urban artisans. Artisans, collectively called bourgeoisie,
employed rural exodus workers to increase their output and meet the country's needs.
British industrialisation involved significant changes in the way that work was performed. The
process of creating a good was divided into simple tasks, each one of them being gradually
mechanized in order to boost productivity and thus increase income. The new machines helped
to improve the productivity of each worker. However, industrialisation also involved the
exploitation of new forms of energy. In the pre-industrial economy, most machinery was
powered by human muscle, by animals, by wood-burning or by water-power. With
industrialisation these sources of fuel were replaced with coal, which could deliver significantly
more energy than the alternatives. Indeed, much of the new technology that accompanied the
industrial revolution was for machines which could be powered by coal. One outcome of this
was an increase in the overall amount of energy consumed within the economy - a trend which
has continued in all industrialised nations to the present day
The accumulation of capital allowed investments in the conception and application of new
technologies, enabling the industrialisation process to continue to evolve. The industrialisation
process formed a class of industrial workers who had more money to spend than their
agricultural cousins. They spent this on items such as tobacco and sugar, creating new mass
markets that stimulated more investment as merchants sought to exploit them.
The mechanization of production spread to the countries surrounding England geographically in
Europe such as France and to British settler colonies, helping to make those areas the wealthiest,
and shaping what is now known as the Western world. Some economic historians argue that the
possession of so-called 'exploitation colonies' eased the accumulation of capital to the countries
that possessed them, speeding up their development. The consequence was that the subject
country integrated a bigger economic system in a subaltern position, emulating the countryside,
which demands manufactured goods and offers raw materials, while the colonial power stressed
its urban posture, providing goods and importing food. A classic example of this mechanism is
said to be the triangular trade, which involved England, southern United States and western
Africa. Some have stressed the importance of natural or financial resources that Britain received
from its many overseas colonies or that profits from the British slave trade between Africa and
the Caribbean helped fuel industrial investment.
Whilst these arguments still find some favour with historians of the colonies, most historians of
the British Industrial Revolution do not consider that colonial possessions formed a significant
role in the country's industrialisation. Whilst not denying that Britain could profit from these
arrangement, they believe that industrialisation would have proceeded with or without the
colonies.
Since the mid-late 20th century, a few countries in Latin America, Asia, and Africa, such
as Indonesia, Turkey, South Africa, Malaysia, Philippines, Mexico, Costa Rica, and El
Salvador have experienced substantial industrial growth, fuelled by exporting to countries that
have bigger economies: the United States, China, India and the EU. They are sometimes
called newly industrialised countries
Despite this trend being artificially influenced by the oil price increases since 2003, the
phenomenon is not entirely new nor totally speculative.
Japan and Russia both were successful in the fact that they imitated many other societies giving
them flexibility. Yet they both had very little in common before the 19th century. Japan was
isolated from the world with its ongoing traditions and forms of centralized government. Russia
featured a more strong centralized government under the emperor.
Both would soon discover that westernization and industrialism were expanding and their own
ways would not hold up against the new changing world of industrialisation. In the late 19th
century the requirement for them to begin industrializing would become even more prevalent for
the success of their nation in this new, growing society.
Figure 2 Newly Industrialised Nations
Migration
World migration has been going on for centuries, and free mass migration—of those not coerced,
like slaves and indentured servants—has been going on for the past two. The reasons people
move are no big mystery: they do it today, as they did two centuries ago, to improve their lives.
What has changed is who is migrating and where they come from. Both the demand for long-
distance moves from poor to rich countries and the ability of the potential migrants to finance
those moves have soared over the past two centuries. As the gap in living standards between the
third world and the first world widened in the 20th century, the incentive to move increased. At
the same time, improved educational levels and living standards in poor parts of the world—and
falling transport costs globally, thanks to new technologies—have made it increasingly possible
for potential emigrants to finance the move.
Thus, over time, poorer and poorer potential migrants, those who live the farthest from high-
wage labor markets, have escaped the poverty trap. This emigration fact implies an immigration
corollary that has important political backlash implications: relative to native-born host country
populations, world immigrants have declined in "quality" over time—at least as judged by the
way host country markets value their labor. Adding to the rising demand for emigration, the
population pool of the most mobile young adults increased as poor countries started the long
process of economic modernization.
Every country passes through a demographic transition as modern development unfolds:
improved nutrition and health conditions cause child mortality rates to fall, thereby raising the
share of surviving children in the population.
After a couple of decades, this glut of children becomes a glut of young adults, exactly those
who are most responsive to emigration incentives. These demographic events were important in
pushing poor Europeans overseas in swelling numbers in the late 19th century and even more
important in pushing poor third-world workers to the first world in the late 20th century. At the
other end of this demographic transition are the rich industrial countries, where population aging
contributes to a scarcity of working adults and thus to a first-world immigration pull that
reinforces the third-world emigration push. Thus, the dramatic rise in world mass migration after
the 1960s should have come as no surprise to any observer who has paid attention to history. But
to truly understand world mass migration—and what might lie ahead—it is not enough to look at
only the past few decades. We must assess the present relative to a past that stretches back over
two centuries.
Statement of the problem
The world is advancing at an alarming rate, processes that used to take generations to manifest
themselves now occur in years. Migration, the rate of change of Industrialisation and Supply
Chain Management are clear indicators of that change. If we are able to see these trends then we
will be able to predict the next frontiers in manufacturing, infrastructure development, &
ultimately gain competitive advantage over competitors by being ‘first’. This information is
available to everyone but only those who can draw the parallels and see the connections will be
in a position to capitalise.
Research questions and hypothesis
This paper will attempt to show a direct correlation between the factors of Supply Chain Management,
Migration and Industrialisation. It will show that a study of these subject areas and analysis of their data
will result in predictive analytics.
The paper will prove that:
Decisions in the Supply Chain Management of Large Multi-National Corporations impact
directly the migration patterns of peoples.
The rate of change of industrialisation, supply chain decisions and migration patterns are all
correlated.
The migration of peoples is directly correlated to the movement of resources and the development
of infrastructure.
It is possible to use big data to predict ‘next frontiers’ is business
A null hypothesis for these questions will prove the viability of the research and show how the use of
predictive analytics can create opportunities for ‘first frontiers’ in business.
Conclusion
Being on the first frontier in business is a definite competitive advantage, an organisation that is
able to see the future and react before their competitors will have the cutting edge. In this world
of reduced lead times, cycle times and product life cycles a few months advantage or even a year
can be the difference between profit and bankruptcy. A comprehensive study of the big data
generated by these factors gives critical mass to the postulation purported in this paper that in
fact accurate predictive analysis can be made to govern business decisions and increase the
competitive advantage of those who know how to apply them.
LITERATURE REVIEW
Introduction
The subject of Supply Chain Management has its early roots in the military when Logistics were used to
coordinate the simultaneous operations on various fronts separated by distance and time. The concept of
Supply Chain Management is based on two core ideas. The first is that practically every product that
reaches an end user represents the cumulative effort of multiple organizations. These organizations are
referred to collectively as the supply chain.
The second idea is that while supply chains have existed for a long time, most organizations have only
paid attention to what was happening within their “four walls.” Few businesses understood, much less
managed, the entire chain of activities that ultimately delivered products to the final customer. The result
was disjointed and often ineffective supply chains.
Supply chain management, then, is the active management of supply chain activities to maximize
customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the
supply chain firms to develop and run supply chains in the most effective & efficient ways possible.
Supply chain activities cover everything from product development, sourcing, production, and logistics,
as well as the information systems needed to coordinate these activities.
The organizations that make up the supply chain are “linked” together through physical flows and
information flows. Physical flows involve the transformation, movement, and storage of goods and
materials. They are the most visible piece of the supply chain. But just as important are information flows.
Information flows allow the various supply chain partners to coordinate their long-term plans, and to
control the day-to-day flow of goods and material up and down the supply chain.
Supply chain management addresses the following problems:
Distribution network configuration: the number, location, and network missions of suppliers,
production facilities, distribution centers, warehouses, cross-docks, and customers.
Distribution strategy: questions of operating control (e.g., centralized, decentralized, or shared);
delivery scheme (e.g., direct shipment, pool point shipping, cross docking, direct store delivery,
or closed loop shipping); mode of transportation (e.g., motor carrier, including truckload, less
than truckload (LTL), parcel, railroad, intermodal transport, including trailer on flatcar (TOFC)
and container on flatcar (COFC), ocean freight, airfreight); replenishment strategy (e.g., pull,
push, or hybrid); and transportation control (e.g., owner operated, private carrier, common carrier,
contract carrier, or third-party logistics (3PL)).
Trade-offs in logistical activities: The above activities must be coordinated in order to achieve
the lowest total logistics cost. Trade-offs may increase the total cost if only one of the activities is
optimized. For example, full truckload (FTL) rates are more economical on a cost-per-pallet basis
than are LTL shipments. If, however, a full truckload of a product is ordered to reduce
transportation costs, there will be an increase in inventory holding costs, which may increase total
logistics costs. The planning of logistical activities therefore takes a systems approach. These
trade-offs are key to developing the most efficient and effective logistics and SCM strategy.
Information: The integration of processes through the supply chain in order to share valuable
information, including demand signals, forecasts, inventory, transportation, and potential
collaboration.
Inventory management: Management of the quantity and location of inventory, including raw
materials, work in process (WIP), and finished goods.
Cash flow: Arranging the payment terms and methodologies for exchanging funds across entities
within the supply chain.
Dynamics of the Supply Chain
Supply chain management is a cross-functional approach that includes managing the movement of raw
materials into an organization, certain aspects of the internal processing of materials into finished goods,
and the movement of finished goods out of the organization and toward the end consumer. As
organizations strive to focus on core competencies and becoming more flexible, they reduce their
ownership of raw materials sources and distribution channels. These functions are increasingly being
outsourced to other firms that can perform the activities better or more cost effectively. The effect is to
increase the number of organizations involved in satisfying customer demand, while reducing managerial
control of daily logistics operations. Less control and more supply chain partners led to the creation of the
concept of supply chain management. The purpose of supply chain management is to improve trust and
collaboration among supply chain partners, thus improving inventory visibility and the velocity of
inventory movement.
Importance
Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in
the global market and networked economy. In Peter Drucker's (1998) new management paradigms, this
concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize
entire business processes throughout a value chain of multiple companies.
In recent decades, globalization, outsourcing, and information technology have enabled many
organizations, such as Dell and Hewlett Packard, to successfully operate collaborative supply networks in
which each specialized business partner focuses on only a few key strategic activities (Scott, 1993). This
inter-organisational supply network can be acknowledged as a new form of organisation. However, with
the complicated interactions among the players, the network structure fits neither "market" nor
"hierarchy" categories (Powell, 1990). It is not clear what kind of performance impacts different supply
network structures could have on firms, and little is known about the coordination conditions and trade-
offs that may exist among the players. From a systems perspective, a complex network structure can be
decomposed into individual component firms (Zhang and Dilts, 2004). Traditionally, companies in a
supply network concentrate on the inputs and outputs of the processes, with little concern for the internal
management working of other individual players. Therefore, the choice of an internal management
control structure is known to impact local firm performance (Mintzberg, 1979).
In the 21st century, changes in the business environment have contributed to the development of supply
chain networks. First, as an outcome of globalization and the proliferation of multinational companies,
joint ventures, strategic alliances, and business partnerships, significant success factors were identified,
complementing the earlier "just-in-time", lean manufacturing, and agile
manufacturing practices.[12] Second, technological changes, particularly the dramatic fall in
communication costs (a significant component of transaction costs), have led to changes in coordination
among the members of the supply chain network (Coase, 1998).
Many researchers have recognized supply network structures as a new organisational form, using terms
such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global Production Network", and
"Next Generation Manufacturing System".[13] In general, such a structure can be defined as "a group of
semi-independent organisations, each with their capabilities, which collaborate in ever-changing
constellations to serve one or more markets in order to achieve some business goal specific to that
collaboration" (Akkermans, 2001).
The security management system for supply chains is described in ISO/IEC 28000 and ISO/IEC 28001
and related standards published jointly by the ISO and the IEC.Supply Chain Management draws heavily
from the areas of operations management, logistics, procurement, and information technology, and strives
for an integrated approach.
Historical developments
Six major movements can be observed in the evolution of supply chain management studies: creation,
integration, and globalization (Movahedi et al., 2009), specialization phases one and two, and SCM 2.0.
Creation era
The term "supply chain management" was first coined by Keith Oliver in 1982. However, the concept of
a supply chain in management was of great importance long before, in the early 20th century, especially
with the creation of the assembly line. The characteristics of this era of supply chain management include
the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and
widespread attention to Japanese management practices.
Integration era
This era of supply chain management studies was highlighted with the development of electronic data
interchange (EDI) systems in the 1960s, and developed through the 1990s by the introduction of
enterprise resource planning (ERP) systems. This era has continued to develop into the 21st century with
the expansion of Internet-based collaborative systems. This era of supply chain evolution is characterized
by both increasing value added and cost reductions through integration.
A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 1–type supply chain, systems such
as production, storage, distribution, and material control are not linked and are independent of each other.
In a stage 2 supply chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain
is one that achieves vertical integration with upstream suppliers and downstream customers. An example
of this kind of supply chain is Tesco.
Globalization era
The third movement of supply chain management development, the globalization era, can be
characterized by the attention given to global systems of supplier relationships and the expansion of
supply chains over national boundaries and into other continents. Although the use of global sources in
organizations' supply chains can be traced back several decades (e.g., in the oil industry), it was not until
the late 1980s that a considerable number of organizations started to integrate global sources into their
core business. This era is characterized by the globalization of supply chain management in organizations
with the goal of increasing their competitive advantage, adding value, and reducing costs through global
sourcing.
Specialization era (phase I): outsourced manufacturing and distribution
In the 1990s, companies began to focus on "core competencies" and specialization. They abandoned
vertical integration, sold off non-core operations, and outsourced those functions to other companies. This
changed management requirements, by extending the supply chain beyond the company walls and
distributing management across specialized supply chain partnerships.
This transition also refocused the fundamental perspectives of each organization. Original equipment
manufacturers (OEMs) became brand owners that required visibility deep into their supply base. They
had to control the entire supply chain from above, instead of from within. Contract manufacturers had to
manage bills of material with different part-numbering schemes from multiple OEMs and support
customer requests for work-in-process visibility and vendor-managed inventory (VMI).
The specialization model creates manufacturing and distribution networks composed of several individual
supply chains specific to producers, suppliers, and customers that work together to design, manufacture,
distribute, market, sell, and service a product. This set of partners may change according to a given
market, region, or channel, resulting in a proliferation of trading partner environments, each with its own
unique characteristics and demands.
Specialization era (phase II): supply chain management as a service
Specialization within the supply chain began in the 1980s with the inception of transportation brokerages,
warehouse management, and non-asset-based carriers, and has matured beyond transportation and
logistics into aspects of supply planning, collaboration, execution, and performance management.
Market forces sometimes demand rapid changes from suppliers, logistics providers, locations, or
customers in their role as components of supply chain networks. This variability has significant effects on
supply chain infrastructure, from the foundation layers of establishing and managing electronic
communication between trading partners, to more complex requirements such as the configuration of
processes and work flows that are essential to the management of the network itself.
Supply chain specialization enables companies to improve their overall competencies in the same way
that outsourced manufacturing and distribution has done; it allows them to focus on their core
competencies and assemble networks of specific, best-in-class partners to contribute to the overall value
chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and
deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique
and complex competency in house is a leading reason why supply chain specialization is gaining
popularity.
Successful SCM requires a change from managing individual functions to integrating activities into key
supply chain processes. In an example scenario, a purchasing department places orders as its requirements
become known. The marketing department, responding to customer demand, communicates with several
distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared
between supply chain partners can only be fully leveraged through process integration.
Supply chain business process integration involves collaborative work between buyers and suppliers, joint
product development, common systems, and shared information. According to Lambert and Cooper
(2000), operating an integrated supply chain requires a continuous information flow. However, in many
companies, management has concluded that optimizing product flows cannot be accomplished without
implementing a process approach. The key supply chain processes stated by Lambert (2004) are:
Customer relationship management
Customer service management
Demand management style
Order fulfillment
Manufacturing flow management
Supplier relationship management
Product development and commercialization
Returns management
Much has been written about demand management. Best-in-class companies have similar characteristics,
which include the following:
Internal and external collaboration
Initiatives to reduce lead time
Tighter feedback from customer and market demand
Customer-level forecasting
One could suggest other critical supply business processes that combine these processes stated by
Lambert, such as:
a. Customer service management
b. Procurement
c. Product development and commercialization
d. Manufacturing flow management/support
e. Physical distribution
f. Outsourcing/partnerships
g. Performance measurement
h. Warehousing management
a) Customer service management process
Customer relationship management concerns the relationship between an organization and its customers.
Customer service is the source of customer information. It also provides the customer with real-time
information on scheduling and product availability through interfaces with the company's production and
distribution operations. Successful organizations use the following steps to build customer relationships:
determine mutually satisfying goals for organization and customers
establish and maintain customer rapport
induce positive feelings in the organization and the customers
b) Procurement process
Strategic plans are drawn up with suppliers to support the manufacturing flow management process and
the development of new products. In firms whose operations extend globally, sourcing may be managed
on a global basis. The desired outcome is a relationship where both parties benefit and a reduction in the
time required for the product's design and development. The purchasing function may also develop rapid
communication systems, such aselectronic data interchange (EDI) and Internet linkage, to convey
possible requirements more rapidly. Activities related to obtaining products and materials from outside
suppliers involve resource planning, supply sourcing, negotiation, order placement, inbound
transportation, storage, handling, and quality assurance, many of which include the responsibility to
coordinate with suppliers on matters of scheduling, supply continuity, hedging, and research into new
sources or programs.
c) Product development and commercialization
Here, customers and suppliers must be integrated into the product development process in order to reduce
the time to market. As product life cycles shorten, the appropriate products must be developed and
successfully launched with ever-shorter time schedules in order for firms to remain competitive.
According to Lambert and Cooper (2000), managers of the product development and commercialization
process must:
1. coordinate with customer relationship management to identify customer-articulated needs;
2. select materials and suppliers in conjunction with procurement; and
3. develop production technology in manufacturing flow to manufacture and integrate into the best
supply chain flow for the given combination of product and markets.
d) Manufacturing flow management process
The manufacturing process produces and supplies products to the distribution channels based on past
forecasts. Manufacturing processes must be flexible in order to respond to market changes and must
accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in
minimum lot sizes. Changes in the manufacturing flow process lead to shorter cycle times, meaning
improved responsiveness and efficiency in meeting customer demand. This process manages activities
related to planning, scheduling, and supporting manufacturing operations, such as work-in-process
storage, handling, transportation, and time phasing of components, inventory at manufacturing sites, and
maximum flexibility in the coordination of geographical and final assemblies postponement of physical
distribution operations.
e) Physical distribution
This concerns the movement of a finished product or service to customers. In physical distribution, the
customer is the final destination of a marketing channel, and the availability of the product or service is a
vital part of each channel participant's marketing effort. It is also through the physical distribution process
that the time and space of customer service become an integral part of marketing. Thus it links a
marketing channel with its customers (i.e., it links manufacturers, wholesalers, and retailers).
f) Outsourcing/partnerships
This includes not just the outsourcing of the procurement of materials and components, but also the
outsourcing of services that traditionally have been provided in house. The logic of this trend is that the
company will increasingly focus on those activities in the value chain in which it has a distinctive
advantage and outsource everything else. This movement has been particularly evident in logistics, where
the provision of transport, warehousing, and inventory control is increasingly subcontracted to specialists
or logistics partners. Also, managing and controlling this network of partners and suppliers requires a
blend of central and local involvement: strategic decisions are taken centrally, while the monitoring and
control of supplier performance and day-to-day liaison with logistics partners are best managed locally.
g) Performance measurement
Experts found a strong relationship from the largest arcs of supplier and customer integration to market
share and profitability. Taking advantage of supplier capabilities and emphasizing a long-term supply
chain perspective in customer relationships can both be correlated with a firm's performance. As logistics
competency becomes a critical factor in creating and maintaining competitive advantage, measuring
logistics performance becomes increasingly important, because the difference between profitable and
unprofitable operations becomes narrower. A.T. Kearney Consultants (1985) noted that firms engaging in
comprehensive performance measurement realized improvements in overall productivity. According to
experts, internal measures are generally collected and analyzed by the firm, including cost, customer
service, productivity, asset measurement, and quality. External performance is measured through
customer perception measures and "best practice" benchmarking.
h) Warehousing management
To reduce a company's cost and expenses, warehousing management is carrying the valuable role against
operations. In the case of perfect storage and office with all convenient facilities in company level,
reducing manpower cost, dispatching authority with on time delivery, loading & unloading facilities with
proper area, area for service station, stock management system etc.
Migration Theory
Theories for migration for work in the 21st century
Overview
Migration for work in the 21st century has become a popular way for individuals from
impoverished developing countries to obtain sufficient income for survival. This income is sent
home to family members in the form of remittances and has become an economic staple in a
number of developing countries. There are a number of theories to explain the international flow
of capital and people from one country to another.
Neoclassical economic theory
This theory of migration states that the main reason for labor migration is wage difference
between two geographic locations. These wage differences are usually linked to geographic labor
demand and supply. It can be said that areas with a shortage of labor but an excess of capital
have a high relative wage while areas with a high labor supply and a dearth of capital have a low
relative wage. Labor tends to flow from low-wage areas to high-wage areas. Often, with this
flow of labor comes changes in the sending as well as the receiving country. Neoclassical
economic theory is best used to describe transnational migration, because it is not confined by
international immigration laws and similar governmental regulations.
Dual labor market theory
Dual labor market theory states that migration is mainly caused by pull factors in more
developed countries. This theory assumes that the labor markets in these developed countries
consist of two segments: primary, which requires high-skilled labor, and secondary, which is
very labor-intensive but requires low-skilled workers. This theory assumes that migration from
less developed countries into more developed countries is a result of a pull created by a need for
labor in the developed countries in their secondary market. Migrant workers are needed to fill the
lowest rung of the labor market because the native laborers do not want to do these jobs as they
present a lack of mobility. This creates a need for migrant workers. Furthermore, the initial
dearth in available labor pushes wages up, making migration even more enticing.
The new economics of labor migration
This theory states that migration flows and patterns cannot be explained solely at the level of
individual workers and their economic incentives, but that wider social entities must be
considered as well. One such social entity is the household. Migration can be viewed as a result
of risk aversion on the part of a household that has insufficient income. The household, in this
case, is in need of extra capital that can be achieved through remittances sent back by family
members who participate in migrant labor abroad. These remittances can also have a broader
effect on the economy of the sending country as a whole as they bring in capital. Recent research
has examined a decline in U.S. interstate migration from 1991 to 2011, theorizing that the
reduced interstate migration is due to a decline in the geographic specificity of occupations and
an increase in workers’ ability to learn about other locations before moving there, through both
information technology and inexpensive travel. Other researchers find that the location-specific
nature of housing is more important than moving costs in determining labor reallocation.
Relative deprivation theory
Relative deprivation theory states that awareness of the income difference between neighbors or
other households in the migrant-sending community is an important factor in migration. The
incentive to migrate is a lot higher in areas that have a high level of economic inequality. In the
short run, remittances may increase inequality, but in the long run, they may actually decrease it.
There are two stages of migration for a worker: first, they invest in human capital formation, and
then they try to capitalize on their investments. In this way, successful migrants may use their
new capital to provide for better schooling for their children and better homes for their families.
Successful high-skilled emigrants may serve as an example for neighbors and potential migrants
who hope to achieve that level of success.
World systems theory
World systems theory looks at migration from a global perspective. It explains that interaction
between different societies can be an important factor in social change within societies. Trade
with one country, which causes economic decline in another, may create incentive to migrate to a
country with a more vibrant economy. It can be argued that even after decolonization, the
economic dependence of former colonies still remains on mother countries. This view
of international trade is controversial, however, and some argue that free trade can actually
reduce migration between developing and developed countries. It can be argued that the
developed countries import labor-intensive goods, which causes an increase in employment of
unskilled workers in the less developed countries, decreasing the outflow of migrant workers.
The export of capital-intensive goods from rich countries to poor countries also equalizes income
and employment conditions, thus also slowing migration. In either direction, this theory can be
used to explain migration between countries that are geographically far apart.
Historical theories
Ravenstein
Certain laws of social science have been proposed to describe human migration. The following
was a standard list after Ravenstein's (1834-1913) proposal in the 1880s. The laws are as
follows:
every migration flow generates a return or counter migration.
the majority of migrants move a short distance.
migrants who move longer distances tend to choose big-city destinations.
urban residents are often less migratory than inhabitants of rural areas.
families are less likely to make international moves than young adults.
most migrants are adults.
large towns grow by migration rather than natural increase.
1. Migration stage by stage
Urban Rural difference
Migration and Technology
Economic condition
Lee's laws divides factors causing migrations into two groups of factors: push and pull factors.
Push factors are things that are unfavorable about the area that one lives in, and pull factors are
things that attract one to another area.
Push Factors
Not enough jobs
Few opportunities
Primitive conditions
Desertification
Famine or drought
Political fear or persecution
Slavery or forced labour
Poor medical care
Loss of wealth
Natural disasters
Death threats
Lack of political or religious freedom
Pollution
Poor housing
Landlord/tenant issues
Discrimination
Poor chances of marrying
War
Pull Factors
Job opportunities
Better living conditions
Political and/or religious freedom
Enjoyment
Education
Better medical care
Attractive climates
Security
Family links
Industry
Better chances of marrying
Industrialization
Industrialisation is the period of social and economic change that transforms a human group from an
agrarian society into an industrial one. It is a part of a wider modernization process, where social
change and economic development are closely related with technological innovation, particularly with the
development of large-scale energy and metallurgy production. It is the extensive organisation of
an economy for the purpose of manufacturing. Industrialisation also introduces a form
of philosophical change where people obtain a different attitude towards their perception of nature, and a
sociological process of ubiquitous rationalization.
There is considerable literature on the factors facilitating industrial modernization and enterprise
development. Key positive factors identified by researchers have ranged from favourable politico-legal
environments for industry and commerce, through abundant natural resources of various kinds, to
plentiful supplies of relatively low-cost, skilled and adaptable labour
Congruence
The factors of Supply Chain Management, Migration & Industrialisation are directly correlated.
When large Corporate Entities move their means of production from one region to another region
in the world, it requires a large labour force (skilled or unskilled) to sustain it. This creates a pull
force which compels a labour force to move towards the point of production. Be it national,
regional or international migration the forces at work are the same and so is the result. The
movement of people causes the rapid growth and development of towns and small cities where
large corporations set up operations. These town and small cities are ‘fast tracked’ on the
industrialisation process and rapidly develop consuming large quantities of resources and
developing at a rapid rate. It will be shown through the research and analysis of data that each of
these individual factors correlate and that a study of them can result in predicting the next
frontier of industry and commerce.
METHODOLOGY
Introduction
We will use a mixture of quantitative and qualitative data to arrive at our desired hypothesis. We
will present the various procedures and strategies that will be used to quantify our postulation.
Questionnaires will be used to collect quantitative data and the interviews will be used to provide
qualitative insights into the data collected. Also secondary data are based from the recent
literatures related to migrant & migrant behavior as well as port throughput and TEU data. As
stated above, this research will partially base its findings through both quantitative research
methods because this permits a flexible and iterative approach. During data gathering the choice
and design of methods are constantly modified, based on ongoing analysis. This study will also
employ qualitative research method because it will try to find and build theories that will explain
the relationship of one variable with another variable through qualitative elements in research.
Sampling Techniques
The general population for this study is composed of people employed to national or international
companies based locally. The respondents will be asked how far they travel to work and also if
they have migrated from another part of the country to work at their present location. The
representative of companies will be asked if the organisation strategically moves production means
to areas with limited barriers to the means of production. We will also collect historical data on
the migration patterns in countries where the means of production are most prevalent such as
Singapore, Malaysia, Hong Kong & China. We will compare the migration pattern with the
establishment of factories and outsourced jobs to see if the correlation is valid. We will associate
this data with ship traffic data and port throughput data from leading ports. The types and volumes
of cargo entering and leaving the points of production and their destination will be examined to
see how these have changed with time.
Data Collection
First, the respondents shall fill out a self-administered questionnaire. Ideally, the
respondents will grade each statement in the survey-questionnaire using a Likert scale (Barnett, V.
1991), with a five-response scale wherein respondents will be given five response choices.
The equivalent weights for the answers will be:
Range Interpretation
4.50 – 5.00 Strongly Agree
3.50 – 4.49 Agree
2.50 – 3.49 Uncertain
1.50 – 2.49 Disagree
0.00 – 1.49 Strongly Disagree
We have opted to use the questionnaire as a tool since it is easy to construct having the
rules and principles of construction are easy to follow. Moreover, copies of the questionnaire could
reach a considerable number of respondents either by mail or by personal distribution. Generally,
responses to a questionnaire are objectified and standardized and these make tabulation easy. But
more importantly, the respondents' replies are of their own free will because there is no interviewer
to influence them. This is one way to avoid biases, particularly the interviewers' bias. The
researcher will also use graph and charts for data presentation.
INSTRUMENTATION
For validation purposes, we will initially submit a sample of the set of survey questionnaires
and after approval; the survey will be conducted with a closed set of five respondents. After the
questions are answered, we will ask the respondents for any suggestions or any necessary
corrections to ensure further improvement and validity of the instrument. We will again examine
the content of the interview questions to find out the reliability of the instrument. Irrelevant
questions will be excluded and we will change words that would be deemed difficult by the
respondents to much simpler terms.
Data Collect ion Plan
The five respondents who will be initially used for the validation of the instrument will be
excluded from the data set. We will also tally, score and tabulate all the responses in the provided
interview questions. Moreover, the interview shall be using a structured interview format. It must
be noted that we will not take part in the interview but opt to use a third party to avoid conflict of
interest. It shall consist of a list of specific questions and the interviewer does not deviate from the
list or inject any extra remarks into the interview process. The interviewer may encourage the
interviewee to clarify vague statements or to further elaborate on brief comments. Otherwise, the
interviewer attempts to be objective and tries not to influence the interviewer's statements. The
interviewer does not share his/her own beliefs and opinions. The structured interview is mostly a
"question and answer" session. This study assumes that the survey used is an effective
measurement tool to identify the behaviour of migrant workers. This study also assumes that each
participant will honestly and thoroughly answer each question.
Statist ical Treatment of the Data
When the entire survey questionnaire have been collected, we will use statistics to analyze
all the data. We will use the Statistical Institute of Jamaica (STATIN) as a resource to help in the
analysis of the data gathered. Because of this research design, the results of the data gathered were
limited to the determination of factors that affect the migrant workers (expatriate or otherwise).
Thus, other possible findings in the field of migrant behaviour & industrialisation are also to be
analyzed.
Comparisons were drawn between the overall responses to the questions and the differing
responses (Creswell, 1994) the following statistical formulae will be also used:
1. Percentage – to determine the magnitude of the responses to the questionnaire.
n
% = -------- x 100 ; n – number of responses
N N – total number of respondents
2. Weighted Mean
f1x1 + f2x2 + f3x3 + f4x4 + f5x5
x = ---------------------------------------------;
xt
where: f – weight given to each response
x – number of responses
xt – total number of responses
The research will be assisted by the Statistical Institute of Jamaica (STATIN) in coming
up with the statistical analysis for this study. STATIN is one of the most widely respected entities
in Jamaica for the analysis of data. They will help to: (compute means and standard deviations,
determine whether there are significant differences between groups (e.g., t-tests, ANOVA),
examine relationships among variables (e.g., correlation, multiple regression), and graph results
(e.g., bar charts, line graphs) (Kirkpatrick and Feeney, 2003).
RESULTS
Introduction
In this section we will present the data in an easily comprehendible format and show how we
arrive at the null hypothesis.
Presentation of Data
Conclusion
The conclusion will state how the result of the findings are to be used for the benefit of others in
determining future frontiers.
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