Strategic Supply Chain Management

Posted: January 4th, 2023

Strategic Supply Chain Management

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Word Count: 2821 words

Table of Content

Executive Summary……………………………………………………………………………….3

Introduction………………………………………………………………………………………..4

Supply Chain Map………………………………………………………………………………5

SWOT Analysis……………………………………………………………………………………7

STEEPLE Analysis………………………………………………………………………………10

Porter Five Force Analysis……………………………………………………………………….11

Conclusion and Recommendations………………………………………………………………12

Reference List……………………………………………….……………………………………13

Executive Summary

The study focuses on the production of steel by Industries Qatar and elaborates how the group attempts to manage the supply chain related with the production of the material. The supply chain map at Industries Qatar shows that the group relates with tier 1, tier 2, and tier 3 suppliers who deliver different products and services to the company to facilitate the production, distribution, and sale of the steel, as well as incorporates investors, employees, and the buyers. The group is likely to understand how the external environment impacts on its operations, especially with regard to the management of the supply chain by employing effective analytical tools such as SWOT, STEEPLE and Porter analysis. The group should take advantage of its strengths and opportunities to increase production as well as take appropriate measures to address the weaknesses and threats that could interfere with functionality. It is apparent that the firm will make significant strides in managing its supply chain by taking proper considerations even as it continues with its manufacturing of the steel.

Strategic Supply Chain Management

Introduction

Industries Qatar in Al Dafna, Doha, Qatar is one of the leading oil and gas companies in Qatar based on its revenue, net income, total assets, and total equity. It has the same rank as other major oil and gas producers such as Qatargas, Qatar Fuel, North Oil Company, and Gulf Drilling International Limited that have investments locally and abroad. Since its formation in 2003, the company has increased its investments in petrochemicals while increasing its onshore and offshore drilling capabilities (Industries Qatar 2020). Other than expanding to other markets in the Middle East, the company pays adequate attention to improving its revenue base by producing and selling fertilizers where it specifically focuses on the production of ammonia, urea and several other by products (Industries Qatar 2020). The study, however, focuses on Industries Qatar’s category of spend in the production of steel, which supplements market demands in certain areas. The group produces a variety of steel products, including steel billets, bars, and pellets. The group runs an effective supply chain for the production and selling of the steel products, which requires considerable attention to attain smooth operations (Reuters 2019). The study elaborates how the group needs to understand how the external environment impacts on the supply chain to identify the factors that could promote functionality or interfere with outcome. Industries Qatar will make significant strides towards manufacturing the steel if the management utilizes the strengths inherent in the company’s system, and if it addresses the challenges that could impede proper functionality.

Industries Qatar focuses on sustainability, market, and product life cycle while producing the steel taking into account that these are important factors to consider while engaging in such a form of production. The manufacturer tries to lower its environmental impact during production, and tries to use resources wisely to prevent wastage and cost (Industries Qatar 2020). The company also strives to achieve sustainability by using materials that are not harmful to the environment, and by relating with suppliers who understand the importance of achieving sustainability. The company through its production of steel targets various local and international markets, while mostly targeting constructors or other groups that require the steel products for other purposes (Industries Qatar 2020). The group sells its steel to other oil and gas companies, which aid in different areas. More fundamentally, the group pays considerable attention to the product life cycle, which is the stage a product undergoes through from its initial introduction into the market until its decline or removal from the market. The group focuses on the introduction phase, which is where the product is released to the market for the initial time at a time when the stakes are high, and other practices such as promotion and marketing are also high (Industries Qatar 2020). The second phase the company considers in the product life cycle is growth whereby it considers how buyers perceive the product and their rate of purchase. The group is keen on the third phase, maturity, when the sales start to reduce or stop because of increased saturation in the market. The group tries to lower its price at this stage, and increases its marketing practices. The group is also keen at the fourth phase, which is the decline stage because this category is inevitable (Industries Qatar 2020). The company tries to keep the product alive at the final stage for as long as possible before the item completely loses its place in the market.

Supply Chain Map

Supply chain mapping is a process that many businesses use to identify the major operations associated with the firm’s product or service line, and is usually utilized as a corporate strategy to identify opportunities for improvement. The supply chain map allows the business to acquire a clear image of the business’ essential inputs and outputs and to acquire essential data for improving sustainability practices (Common Objective 2020). Organizations must be keen while using a supply chain map to acquire the true image of what the firm has to undergo or address while handling the supply chain process (Christopher 2017). The firm, for example, should begin with identifying and grouping the organization’s major suppliers with consumer groups that represent the firm’s primary business inputs and outputs. Considering the chief suppliers and important product lines is usually a suitable starting point for companies in the manufacturing sector (Hugos 2011). Service-based firms, however, may explore the various groups affected or impacted by their services (Hugos 2011). It is the reason why Industries Qatar uses a supply chain map to guide its supply chain activities.

Industries Qatar relies on its supply chain map as a fundamental guide in its production and selling of the steel. The company relates with tier 1, tier 2, and tier 3 suppliers all of whom play essential functions in the production of the product. The tier 1 suppliers provide systems and components such as the software and auxiliary parts used run the production machines, and delivers directly to the original equipment manufacturer (Industries Qatar 2020). The company while developing the steel deals with tier 2 suppliers who comprise of experts in various fields (Cohen 2016). The tier 2 suppliers, for example, comprise of computer experts who install and configure certain components and supply chain management experts who provide valuable insights into developing prosperous frameworks (Industries Qatar 2020). The group also deals with tier 3 suppliers who provide the essential raw materials needed for the production process such as chemicals and the scrap metals used for recycling. Apart from the suppliers, the group relies on its investors and employees’ commitment to deliver products that would appeal to consumers. The investors play an essential function in the way they provide necessary financial support to facilitate the production processes, while the workers use their skills and competence to enhance production. The corporation interacts with all these parties with the objective of attracting the end-user group, which is usually the consumer. The firm pays considerable attention to the transportation practices as the raw materials and products move from one point to the other without which it would be hard to access the required parts and components (Industries Qatar 2020). The framework below is a visual presentation of Industries Qatar’s supply chain map that it uses in the production and selling of the steel;

		Company Workers

                                          Tier 1                                                 Buyers                  

                                          Tier 2       

                                          Tier 3

Investors

SWOT Analysis

Industries Qatar understands that all that leads to the prosperity of a company’s operations do not come from within the organization, which makes it necessary to focus on how the external environment influences business activities. Gurel and Tat (2017) encourage businesses to consider the impact of the external environment, which comprises of all the outside influences or factors that impact on the organizational operations. Specifically, the firm should consider the micro environment, which comprises of the components that have direct impact on the business operations, and the macro environment, which comprises of general features that a business may not have direct control or influence. The external environment impacts on various operational areas, including production, marketing, and even selling, which encourages business people to embrace various evaluation tools to understand how the factors in the external environment impact on their activities. An effective tool is the SWOT analysis that enables the company to understand how its strengths, weaknesses, opportunities and threats impacts on its operations.

Industries Qatar should consider how the strengths, weaknesses, opportunities and threats of the product impact on its distribution and acceptance by consumers. One of the major strengths in the steel Industries Qatar manufactures is they are of high quality, which make them appealing to consumers. The group through its production of the high quality material indicates that it understands the importance of applying the concepts of marketing mix, which advocates for the development of products that appeal to consumers because of their quality and value. The other strength of the steel Industries Qatar manufacturer is it is sustainable. The manufacturer tries to use renewable materials as well as use raw materials that may have adverse effects on the environment. A weakness inherent in the material, however, is the company lacks adequate market, especially in markets outside the Middle East, which derails mass production. The group should identify appropriate ways of securing more market for the product if it aspires to improve the quantity of production. An opportunity regarding the material is the level of technology is advancing, which may impact on the quality and rate of production. The group would increase its ways and forms of production if it invests in the latest technology, and if embraces more innovative practices. The other opportunity that could impact on the production of the steel is more skillful workers are joining the manufacturing sector, which increases the probability of developing more improved products that meet consumers’ needs. The threat that could interfere with the production and distribution is the competition from other companies that produce steel of equally or even better quality in Qatar and other parts in the Middle East. Furthermore, the changing consumer desires and the legislations that change from time to time may also impact on the production of the steel.

The supply chain process at Industries Qatar facilitating the production of the steel also displays certain strengths, weaknesses, opportunities and threats that influence the sourcing of the raw materials, the production of the material, and distribution to various consumers. In addition to adhering to the supply chain map, the group adheres to an effective supply chain process to make sure that nothing strains its link between the organization and its suppliers. The company incorporates various groups, including warehouses, transportation firms, distribution groups, suppliers, warehouses, and retailers to improve the functionality of the entire process. The company in its production and selling of the steel use the Supply Chain Operations Reference (SCOR) model that was created and authenticated by the Supply–Chain Council (SCC) as a standard form of supply chain management. The company in its adherence to the SCOR model starts with planning where it gets a structure or guidance for developing a course of action, which suitably meets the created business regulations and objectives, and then transits to sourcing where the group acquires the relevant goods and services needed to achieve actual or planned demand. The group then moves to the making phase where the transformation of the raw materials to finished goods takes place before they are delivered to the consumers. The supply chain process is also effective because it permits for the returning of defective good or because of other reasons. The evident weakness in the supply chain process is the group does not seem to invest a lot in a mechanized or digitized value chain process, which may have some adverse implications on the output. An opportunity that could improve the functionality of the supply chain is the increased awareness regarding how to develop a robust supply chain, while the biggest threat is increased competition from other firms as noted in the previous section.

Strengths The group employs SCOR model	Weaknesses Inadequate investment in digitized processes
Opportunities Increased awareness on how to improve supply chain	Threats Competition from other companies

STEEPLE Analysis

Performing a STEEPLE analysis provides additional information regarding the steel Industries Qatar manufacturers. A suitable factor to consider are the social factors such as how consumers perceive the material, and how it is likely to impact on the production process. The group must also consider the technological features that could impact on production such as the development of new technology, as well as how the economic situation may impact on the production and selling of the material. The group should expect reduced sales in tough economic times and increased sales when the economy is stable. The company has to consider environmental factors such as the need to lower global temperatures while performing its activities, as well as political requirements such as the enforcement of federal policies on taxes and environmental protection. The firm, for instance, has to remit the necessary taxes for the production of the product, and must adhere to regulations on carbon emission during production. The group should consider the legal factors that could influence its operations, which may including battling a court case for failing to adhere to the terms of a contract with a supplier. Also important is the developers adhere to the ethical requirements that would permit effective operations. The operators, for instance, relate with the suppliers in a kind manner, and are honest in all their dealings.

Porter Five Force Analysis

Performing a Porter five force analysis provides some insight into how the steel the Qatari firm produces may attain competitive advantage and the factors that could derail it from achieving the desirable standards. The firm understands the possible threat of other operators and the rivalry that exists in the sector, and it is dedicated to develop high quality products, as well as to develop a supply chain management structure that facilitates production and lowers the obstacles that prevent buyers from accessing the product in real time, and in convenient places. The group understands the threats of new entrants who come with new strategies and better ways of appealing to consumers, and it is the reason why it applies the SCOR model, which is approved to be an effective supply chain structure. The company is keen on the availability of substitutes, which Bensecilas, Ombui and Iravo (2016) and Chowdhury et al. (2012) describe to be a significant factor to consider when providing or supplying a particular product in the market. Such substitutes may lower sales, especially if their providers use appealing methods to woo buyers, and if the products of high quality. The group in its production and distribution of the steel considers the consumer and supplier bargaining power that may have significant impact on the profits the team makes as well as on competitive advantage (Bruijil 2018). The group tries to set a price that would attract many buyers, but does not give in to prices that would deny it the chance to generate profits. The company also deals with suppliers who set prices that the group can afford without running into a financial crisis, or experiencing considerable challenges paying the bills. All these factors make the Porter five force analysis an important tool for gaining competitive advantage even as the group indulges in the production of steel.

Conclusion and Recommendations

The study focuses on Industries Qatar, which tries to maintain an effective supply chain process while producing steel. The group’s supply chain map indicates that the group deals with tier 1, tier 2, and tier 3 suppliers who provide different commodities used in the production process. The company also relates with investors and values the work of each worker who contributes towards the production of the steel and the success of the supply chain. The firm should utilize the strengths of its product and supply chain to increase productivity, as well as to increase delivery to customers. Industries Qatar may also advance its supply chain practices surrounding the production of steel by relying on analytical tools such as SWOT, STEEPLE and Porter’s analysis to understand the impact of the external environment on sourcing of materials, production, and sale. The corporation may take several measures to improve its supply chain to enable it overcome the weak areas. The team should strive to acquire information and lessons from other companies that achieve positive results from their management and application of supply chain frameworks. The group may also improve its performance in handling the supply chain by acquiring information from various sources, and by training workers on how to improve the production of the material through the use of advanced technology. The group should remember that the level of competition in the external environment is high and applying the right and equally competitive mechanisms are effective ways of achieving the desired outcome.

Reference List

Bensecilas, T, Ombui, K, & Iravo, M 2016, ‘Influence of the Porter’s five forces model strategy on performance of selected telecommunication companies in Kenya,’ International Journal of Scientific and Research Publications, vol. 6, no. 10, pp. 558-568.

Chowdhury, M, et al. 2012, ‘Michael Porter’s five forces analysis in shipping industry: Bangladesh shipping corporation perspective,’ BMJ, vol. 1, no. 1, 82-92.

Christopher, M 2017, Logistics & supply chain management, Oxford University Press, Oxford.

Cohen, S 2016, Strategic supply chain management, Penguin, New York.

Bruijil, G 2018, ‘The relevance of Porter’s five forces in today’s innovative and changing business environment,’ SSRN Electronic Journal, doi: 10.2139/ssrn.3192207

Common Objective 2020, Why and how to map your supply chain. Available from: <https://www.commonobjective.co/article/why-and-how-to-map-your-supply-chain> [April 26, 2020]

Gurel, T, & Tat, M 2017, ‘SWOT analysis: A theoretical review,’ The Journal of International Social Research, vol. 10, no. 51, pp. 994-1006.

Hugos, M 2011, Essentials of supply chain management, Wiley, London.

Industries Qatar 2020, Industries Qatar. Available from: < http://www.iq.com.qa/> [April 26, 2020]

Reuters 2019, Industries Qatar QPSC IQCD.QA. Available from: <https://www.reuters.com/companies/IQCD.QA > [April 26, 2020]