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General Motors: Supply Chain Management My Assignment Essay Help

Introduction


As the era of global trade advances, supply networks become increasingly significant. There is a wealth of theoretical knowledge devoted to constructing a sustainable supply chain in many domains and market conditions. However, the applicability of these hypotheses remains uncertain. The 2008-2009 decline of General Motors is an excellent example for analyzing this issue and drawing consequences for the company's current and future supply chain management.



Literature Review



Extremely diversified in terms of practices, theories, and models, supply chain management is a vast field of study. In order to gain a better understanding of the subject of the report, this paper will examine the supply chain management at General Motors by reviewing a selection of relevant literature.



Wisner, Tan, and Leong carried out one of the seminal contributions to the field of supply chains (2014). In this publication, the writers examined supply chain common practices and theoretical knowledge. They define a supply chain as a collection of productive forces that participate in the manufacturing and delivery of a product to the end consumer. There can be changes in the number of participants, stages, and methods for each product. Wisner, Tan, and Leong (2014) emphasize, however, that practically in every instance it takes precise planning, administration, and coordination, as sometimes dozens of companies are involved in the process of creating a single product.



Wisner, Tan, and Leong (2014) identify and evaluate different supply chain management (SCM) models utilized in commercial practice. Supply-Chain Operations Reference, or SCOR, is a model that examines the overall performance of a supply chain. It is based on four "pillars": modeling of processes and re-engineering, performance evaluation criteria, best practices, and the necessary SCM skills. The first addresses managerial processes applicable to various types of enterprises, including planning, resource gathering, production, delivery, and return (Wisner, Tan, & Leong 2014). The second includes more than 140 performance measures that provide senior management with a comprehensive view of their supply chain. About 400 distinct practices have been recognized by many successful managers and are distinguished by their applicability to the current business climate, different areas of operation, degree of success, and usefulness (Wisner, Tan, & Leong 2014).



Perez offers a second intricate perspective on supply chain management (2013). His supply chain strategy is centered on separating supply chains into six basic archetypes: Efficient, Quick, Continuous-Flow, Agile, Custom-Configured, and Flexible (Perez 2013, p 23). The roadmap then implements 42 metrics to monitor the performance of each type and determine if supply chain alterations are necessary and to which archetype they are ascribed. The author bases his approach on his own managerial expertise, making it a trustworthy business resource.



Almost all authors concur on the significance and high value of the planning stage, which can assist define critical areas for development and reorganization, as well as objectives, strategies, and other crucial SCM aspects (MacCarthy et al. 2016; Perez 2013; Stadtler 2005). The researchers also emphasize the importance of establishing relationships with partners that are mutually beneficial. Otherwise, such relationships are infrequently dependable and durable (Stadtler 2005; MacCarthy et al. 2016).



SCM is especially important for multinational corporations, whose structures are highly complicated and whose ineffective management can have a significant impact on their efficiency. MacCarthy et al. (2016) indicate that, to boost the productivity of interactions between partners within a global inter-corporate chain, the appropriate use of appropriate IT is vital under conditions of increased speed and volatility.



Supply Chain Dangers



Frequently, supply chain hazards are classified as either external or internal. The former is represented by conditions that are beyond the company's control, whilst the latter is directly within its command. External influences include well-known elements such as supply and demand. For instance, the availability of raw materials or components could be halted by a natural disaster. For instance, a storm, flood, or earthquake might wipe out crops necessary for the production of plant-based foods. In such a scenario, a company manufacturing grains in a disaster-stricken region would have to reroute its connections and seek out new partners with raw material supplies.



Unforeseen circumstances may also result in an abrupt fall in demand. As an illustration, one may recall that cocaine and heroin were frequently used as anesthetics in clinics. When the data demonstrating the grave repercussions of cocaine use was published, the demand for the drug in clinics decreased. In the eighteenth century, lead-based cosmetics experienced a similar fate.



The proliferation of terrorism and cybercrime is a further external threat. Various groups may disrupt the supply chain by stealing or corrupting valuable data or destroying property. Such occurrences are typically unexpected and may target either a partner or the parent company.



Significant risks are posed to the entire supply chain by the business issues of a key supplier, which could damage the primary company. For example, if a coal mining business declares bankruptcy, the supply of hot water to homes that rely on thermoelectric power plants may be interrupted.



Internal hazards include issues that can halt production or sever commercial ties within the core organization. Manufacturing hazards, such as technical issues in production facilities, may be associated with potentially destructive issues. Inadequate planning may result in unanticipated financial or human losses, or even insolvency. Ineffective business procedures, such as faulty information management or bureaucracy, may also contribute to the demise of the company and its suppliers.



In order to remain competitive and maintain ties with suppliers, mitigating these risks necessitates comprehensive planning and management in all domains, as well as the collection of correct and appropriate information.



Case Report

General Motors

General Motors was one of the corporations that attracted great attention from researchers (GM). The company's history is distinguished by its climbs and falls, such as its 2009 bankruptcy, rebirth by federal funding, and current relative prosperity. The business was established in 1908 as a maker of horse-drawn vehicles. Through a succession of astute purchases, General Motors was able to become a major maker of vehicles in a variety of price ranges and styles. In the early 1980s, the corporation sold approximately 350,000 automobiles annually under the Cadillac, Buick, Chevrolet, and other brands. Due to its inability to optimize its internal structure, the company lost practically all of its assets and went bankrupt during the 2009 financial crisis. In their manufacturing plants, sales offices, and owned enterprises, GM employed approximately one million Americans. The U.S. government chose to buy out General Motors' debts and restructure them in order to restore the company to the market because a million workers losing their jobs would be disastrous for the economy.



Due in part to GM's strict connections with its suppliers and employees, the 2008-2009 economic crisis had a profound impact on the company. According to Goolsbee and Krueger (2015), the demise of GM would result in a high number of supplier bankruptcies, as the company was a major partner for car seat and other equipment manufacturers. GM has always struggled to discriminate between its suppliers and its low-skilled workers, which is another contributing factor (Helper & Henderson 2014).



Therefore, General Motors is an unusual instance with significant implications for supply chain management. It highlights the benefits of effective management-worker relationships, the significance of foresight, and risk management in large multicultural and multinational enterprises.



Lessons Learned from the Literature



Due to the case's bankruptcy and resurgence history's illustrative value, business analysts and academics paid close attention to it. As was indicated previously, Goolsbee and Krueger (2015) determined that the failure of a large manufacturer in a certain industry produces enormous problems for the entire supply chain, which has significant consequences for supply chain management. Also, Helper and Henderson (2014) stated that a significant portion of the company's problems stemmed from its connections with its suppliers. In comparison to its Japanese competitors, the average time GM spent on the whole car production cycle was uncompetitive. The rigidity of GM's internal structure, as evidenced by its fixed-rate payment plans, also contributed to its market failure during the financial crisis (Goolsbee & Krueger) (2015). In addition, Helper and Henderson link the low salaries offered to GM factory workers with the company's high defect rate.



From the Literature Review, Arguments Emerged.



The aforementioned issues demonstrate that General Motors experienced systematic supply chain inefficiencies. The researchers link these difficulties to numerous causes. One of them was an incapacity to perceive contemporary obstacles and to assess the strengths of their opponents (Helper & Henderson 2014). GM's top executives appear to have heavily depended on the techniques they have employed thus far. They were appropriate while the market and economic conditions were favorable, but GM's scale and structural rigidity prevented it from adjusting as quickly as was necessary in rapidly changing conditions.



Lack of competition in the 1970s and 1980s, when the corporation held a 50-60% market share, made the company less vigilant to potential threats when Toyota and Honda automobiles began to come on the American market (Helper & Henderson 2014). Another problem was the absence of a just-in-time inventory system, which increased manufacturing costs (Helper & Henderson 2014).



Opportunities and Difficulties



The company was faced with a wide variety of obstacles. First, the organization lacked the capability for fast organizational transformation. The firm fought to overcome the union contracts that obligated them to make set payments. Closing a manufacturing site would necessitate a significant number of legacy payments, which would slow down the process. Another difficulty was the company's inability to withstand a decline in sales profit. The aforementioned rigidity impeded the company's ability to adjust to its losses. As a result of GM's inability to identify and assess its competitors and its overconfidence in its own processes, the increase in competition became the company's most pressing issue.



Concerning opportunities, the company's recent revival has afforded it the chance to evaluate its supply chain management and fight for a share of its former market. Another possibility is a detailed examination of more successful competitors, such as Toyota and Honda, which have already become multinational organizations. If GM could employ these techniques to restructure its own supply lines, the decreased average cost and manufacturing time, as well as the techniques used to achieve them, would be beneficial. GM has the option to rethink its staffing policies now that it is relatively free of its prior financial obligations. The company will be able to better adapt to the current scenario if it establishes entirely new strategic objectives for its supplier relationships. After a huge catastrophe, GM was awarded a second chance, which provided it with an exceptional opportunity to study and comprehend its mistakes and ensure they are never repeated.



Business Practice Applicability of the Theoretical Knowledge



Frequently, a model is a theoretical construct whose actual execution may necessitate extensive reorganization and incur substantial expenses. This occurs in part because the real world has a complex structure and a massive number of distinct occurrences. The majority could be examined, organized, and forecasted. However, the effects of some remain unknown. The human component, for instance, is one of the most unpredictable and potentially disruptive variables. Each individual’s responses to stress could be unpredictable, and a CEO who was admired by coworkers and business partners could see a decline in professional skills due to illness or other personal situations. In the case of GM, the senior management's alleged personal refusal to adapt to difficulties led to the catastrophic failure of the company and its partners.



Typically, researchers develop intricate frameworks and theories to address such a challenge, but execution becomes problematic. A complicated and multifactorial model, such as SCOR, is highly dependent on the availability of information necessary for the evaluation of critical parameters. The larger the chain, the more difficult it is to collect and process all required data. The introduction of new IT technologies, such as electronic document flow, significantly simplifies this work. Due to the fact that partners may not always be as vigilant or may not possess the same technology, the dependability of the data may be an issue. Such a problem exists, for example, in developing nations, although GM will likely manage such a danger (Georgise, Wuest, & Thoben 2017).



Another difficulty associated with the applicability of theoretical knowledge is the limited expertise of the author in SCM. As such, Hernan David Perez designed the above-mentioned road map, constructing it based on his own SCM expertise in the fields of fast-moving consumer products, car manufacture, and retail. Even while the approach is utilized successfully in these industries, there is no assurance that it will function in other fields, such as oil and gas. Due of the author's expertise in the field of SCM for vehicle manufacture, this road map may be appropriate in this instance.



The regional distinctiveness of business connections is another concern. In Asian countries, for instance, long-lasting and fruitful relationships between spouses are built through a lengthy and meticulous process of forming personal connections. In contrast, in the United States and Europe, a great deal depends on the offer and terms with specific figures and quantities. However, cultural diversity is now a widely-applied notion in the field of global supply chain management. GM will be able to overcome this challenge if it takes a culturally sensitive approach to developing trustworthy partnerships with suppliers and their personnel from other nations.



All the aforementioned challenges demonstrate once more the complexity of global business conditions and the multiplicity of variables that might have varying degrees of impact on the performance of SCM. The applicability of theoretical frameworks, concepts, and models is hindered by the specific combination of business environment peculiarities in a given country, relationships between partners, and the level of technological advancement attained and employed in the companies forming a supply chain. However, a judicious selection of methods and practices coupled with an appropriate SCM model can assist the organization in overcoming these obstacles.



Recommendations



As a first step following such an incidence, the company should perform a thorough examination of its past and present to determine what it must do to be competitive on the market now and tomorrow. GM may consider implementing a complicated model such as SCOR for supply chain analysis. It will expose the company's internal and external relations' strengths and weaknesses and provide executives with insight on intervention areas. The organization should not undervalue the planning phase of implementing change in the realm of SCM since it affords the opportunity to foresee potential dangers and take precautions against them.



GM's senior management should also apply progressive thinking in order to not just implement ideas that work for their competitors, but also remain ahead of them. Globalization brings many more dangers than recession or competition. GM must consider fail-safe solutions to safeguard its supply chain from data manipulation or theft in order to combat terrorism and organized cybercrime.



Conclusion



Supply chain management has a significant impact on the market performance of an organization. Effective SCM performance evaluation methodologies and models help ensure a company's competitiveness. The General Motors case study demonstrates that supply networks must be managed with the utmost expertise. Problems encountered by the company during the 2008-2009 economic downturn demonstrate that a flexible internal structure and well-established partnership with suppliers could be the difference between survival and failure.



Bibliography



Georgise, F., Wuest, T., and Thoben, K. (2017). SOR model application in poor countries: obstacles and requirements.



A. Goolsbee and A. Krueger, "A retrospective look at rescuing and restructuring General Motors and Chrysler," Journal of Economic Perspectives, vol. 29, no. 2, pages 2-34, 2015.



Helper, S., and R. Henderson, "Management practices, relational contracts, and the decline of General Motors," Journal of Economic Perspectives, vol. 28, no. 1, pages 49-72, 2014.



Supply chain evolution — theory, concepts, and science.



Supply chain roadmap, H. Perez, CreateSpace Independent Publishing Platform, New York, NY, 2013.



Stadtler, H 2005, ‘Supply chain management and advanced planning––basics, overview and challenges’, European Journal of Operational Research, vol. 163, pp. 575–588



London: Cengage Learning, 2014, Wisner, D., C. Tan, and G. Leong, Principles of supply chain management: a balanced approach.

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