Task
The Supply Chain Management Director of the Brazilian Supermarket chain Compretudo is looking for a new Freight Forwarder to manage their trade lane from the suppliers in your country and your neighbouring country, as described in Assignment 2. You have previously identified those countries. If successful the new Freight Forwarder would take over all Compretudo’s freight forwarding business. You are the Business Development Director for Fast and Lose (F&L), an expanding Freight Forwarding business in your country. You are changing
F&L’s business focus more towards global supply chain management. Because of the potential business from Compretudo you are thinking of partnering with a Freight Forwarder in Brazil, ‘Rápido e Apertado’. Compretudo’s Supply Chain Management Director has asked you for an appraisal of their supply chain security issues and how you would enhance their supply chain visibility.
In your report should cover:
- The benefits of sourcing their goods from your country and your neighbouring country (previously identified) but with suggestions for risk mitigation and security;
- How Fast and Lose would co-ordinate and manage the various supply chain management roles and activities in moving the goods from the sellers in your country and in a neighboring country (previously identified) to the point of consolidation in your country, shipping to and distribution in Brazil.
- An appreciation of the potential risks to the security of their end-to-end supply chain in this specific scenario and any initiatives that may improve security and visibility and win the new business.
Introduction
Brazilian Supermarket chain Compretudo is looking to find a supply chain partner to manage and maintain the trade lane in different countries. The company has identified the home country of a new trade partner and other neighboring countries. Fast and Lose (F&L) is a potential freight forwarding or supply chain firm, which is in the limelight due to its differentiated services. The firm has maintained its focus on the global supply chain. However, the global supply chain process is triggered by some critical security issues or threats. The role of business in overcoming these threats or challenges is quite visible. On the other hand, Fast and Lose (F&L) intends to partner with Rápido e Apertado in Brazil to deal with these security threats effectively. This study revolves around the benefits of sourcing Compretudo’s Goods along with some suggestions for risk mitigation and security. The firm has to coordinate and manage the various supply chain roles and activities. Of course, potential risks have emerged, and therefore, some strategic considerations are needed to win the business.
Benefits of sourcing Compretudo’s Goods
Being a business development director of Fast and Lose (F&L), I have to streamline some strategic concerns regarding this new partnership with Compretudo, a supermarket giant in Brazil. For Instance, sourcing Compretudo’s goods can help the company to expand its business. It seems an excellent opportunity for the firm to emerge in the global supply chain process and shape its business model and process. One of the most significant benefits of this possible sourcing is to understand different custom challenges and compliance with the law. Cross border flow of goods is always challenging for global firms. Thus, it can help to integrate with the modern supply chain of logistic trends in the competitive global landscape (Module 4, 2019).
Apart from it, this sourcing is beneficial in terms of understanding or integrating with world Custom Organization (WCO) (Module 4, 2019). Being a responsible company, it has to align with the WCO framework and its standards. Of course, Fast and Lose wants to sustain its brand image in the global market and working with one of the prominent supermarket chains in Brazil, can justify the purpose. Interestingly, this business focus can be beneficial due to possible financial growth and stability. Apart from legal compliance, the company can improve revenue streams and build a long-term strategic partnership. Also, the successful operations can help to take over all Compretudo’s freight forwarding business, and it seems a prominent benefit, as far as the sustainability in the global business environment is concerned (Chao, Chen, Yang, & Chen, 2016).
Suggestions for Risk Mitigation and Security
It is a fact that the role of the customs administration in identifying and overcoming supply chain security risks. For Instance, it has been revealed that an importing country always has some security concerns. Thus, the company may work with customer administration to gain improvements in supply chain security. Sharing the information with the partner and understanding the cargo inspection (Module 4, 2019). Compretudo’s supply chain management director contains some supply chain security concerns, and these suggestions must be communicated or shared accordingly. Smuggling is also a prominent supply chain security issue or concern for the director of the supermarket. However, the freight forwarder suggests integrating with the global shield (Module 4, 2019). The global shield is a differentiated program, which has been designed to prevent drug smuggling or any misappropriation in the cross-border flow of goods. Fast and Loss Company has to mitigate the risk and eliminate the security threats in the supply chain process through integration with C-TPAT security criteria (Module 4, 2019). Both fast and Loss and Compretudo must depict their eligibility of C-TPAT security criteria, as it can make the whole trade line more secure, not only in Brazil but also in different operating countries. Innovations in the supply chain process to strengthen security are quite visible in this contemporary business era. Now is the best time to reshape the business model and modify the supply chain strategy to embrace innovations. Tracking of goods through technology and sharing information are two pertinent suggestions to make the difference. Overall, business partners have to work together to mitigate supply chain risks and security threats (Kwak, Rodrigues, Mason, Pettit, & Beresford, 2018).
Coordinating and Managing the Various Supply Chain Management Roles and Activities
Moving the goods from the Compretudo in a home country, neighboring country (previously identified), to the point of consolidation, shipping, and distribution in Brazil is main activities, which are to be conducted by this freight forwarder. However, clear roles and actions are to be identified and shared with the partners (Llamazares, 2017). For Instance, one of the primary roles is to assist freight quotes and cost of international forwarding. After sharing this information, the management of the company will share the list of different items precisely along with the separate cost. The primary activity is to book different modes of transportation to enable the cross-border flow of goods. Interestingly, fast and Loss will be coordinating with the supermarket giant in Brazil to select and book the mode of transformation. Depending on different products and volume, methods of transportation must be identified (Gupta, 2008). Consolidating shipments from various suppliers, preparing the shipment documentation, handling legal procedures, preparing insurance coverage, facilitating warehousing, and sharing the information regarding hazardous material of goods are some activities, which are to be conducted by the freight forwarder. Also, coordinating with the supermarket in Brazil to identify the additional need is also a primary role. All these roles and activities are to be managed and maintained adequately (Petkevičiūtė–Stručko & Yauhen, 2018).
Potential Risks to Security
There are many potential risks to supply chain security, and both business partners have to identify and overcome these security risks effectively. For Instance, apart from the smuggling and inventory theft, mentioned above, increasing piracy, physical tampering of goods, cyber-attacks, connectivity, political and government regulations, and different environmental risks are some potential risks to the supply chain security. Forwarding goods from Brazil to the targeted country is triggered by these threats. For Instance, after transmitting the goods from Brazil, despite coordinating with the seller, inventory theft is possible (Barrios, 2018). Both seller and freight forwarder have to bear the loss. As far as the end-to-end supply chain process is concerned, the risk of piracy is always there. It seems a possible uncertainty that can happen and cause a huge disaster. Several environmental issues may also cause damage, and it looks like a prominent supply chain risk for both partners (Wainstein, 2018).
Initiatives that may Improve Security and Visibility
Some strategic initiatives are to be taken to improve supply chain security and visibility. The most important thing is to win the business and enable long term business sustainability. It is a fact that possible security initiatives have been seen as a sign of professionalism in the business or supply chain process. For Instance, there is a need to strengthen the business partnership. Instead of focusing on the competition, parties must have to focus on immediate respective tasks. There is a need of providing or sharing the processes, which can strengthen the revenue streams and protect the business from different illicit activities such as weapon smuggling, tempering of goods, and other possible cyber-attacks if the advanced supply chain triggers the firm. It has been revealed that many businesses, including supermarket chains, export products swiftly. The key initiative is to develop a measure, which can help to evaluate the active movement of goods. Both parties have to improve this measure, as sheer speed should not be a concern for businesses. Another critical initiative to make the whole supply chain secure and visible is to audit the vulnerability regarding all threats or risks. After conducting the audit, the businesses or partners will be in an excellent position to shape proactive risk management strategies. Terrorism or facilitating terrorism through business is a huge concern. Thus, molding the supply chain process according to C-TPAT can be a crucial initiative to enable security (Manuj & Mentzer, 2008)
Winning the New Business
Winning the new business is a big concern for both Brazilian supermarket and freight forwarder. By streamlining these initiatives and critical suggestions to improve the supply chain security and visibility, the business relationship can be sustained. For Instance, fast and loss wants to take over the whole supply chain of the supermarket. On the other hand, the supermarket chain is committed to working with a company, which is safe and can go the extra mile to secure goods when moving goods across different borders (Murray, 2018).
Conclusion
In the end, it is to conclude that the role of the business in the supply chain process is visible due to some possible initiatives, which are to be taken by the business partners. The study focused on the new business partnership between Brazilian supermarket chain Compretudo and a new freight forwarder. Potential risks, suggestions, and strategic initiatives have been streamlined along with several insights. The successful implementation of these risk mitigation strategies can help to win the business.
References
Barrios, K. (2018, October 10). Top 10 Global Supply Chain Risks. Retrieved from https://www.xeneta.com/blog/global-supply-chain-risks
Chao, C.-C., Chen, F.-Y., Yang, C.-C., & Chen, C.-Y. (2016). Applying technological organization environmental model to examine the adopting intention of e-freight for the air freight forwarder. Journal of International Logistics and Trade, 14(1), 89-102,104-117.
Gupta, D. (2008). Flexible carrier-forwarder contracts for air cargo business. Journal of Revenue and Pricing Management, 7(4), 341-356.
Kwak, D.-W., Rodrigues, V. S., Mason, R., Pettit, S., & Beresford, A. (2018). Risk interaction identification in international supply chain logistics. International Journal of Operations & Production Management, 38(2), 372-389.
Llamazares, O. (2017, March 23). What Is A Freight Forwarder? Types And Functions. Retrieved from https://www.globalnegotiator.com/blog_en/freight-forwarder-forwarding-agent-meaning-definiton/
Manuj, I., & Mentzer, J. T. (2008). Global supply chain risk management strategies. International Journal of Physical Distribution & Logistics Management, 38(3), 192-223.
Module 4. (2019). Supply Chain Security Roles: The role of Customs in securing international trade. 1-15.
Murray, M. (2018, december 16). Introduction to Freight Forwarding. Retrieved from https://www.thebalancesmb.com/freight-forwarding-2221040
Petkevičiūtė–Stručko, M., & Yauhen, I. (2018). The complexity effect of freight forwarding trade instruments in project logistics. Intelektine Ekonomika, 12(1), 48-56.
Wainstein, L. (2018, December 10). 7 Supply Chain Security Concerns To Address In 2019. Retrieved from https://supplychainbeyond.com/7-supply-chain-security-concerns-to-address-in-2019/
