In this essay, we are going to discuss the changes within the structure of the organization and the factors, which necessitate the management to adopt new policies. In particular, we should focus on the integration of business processes and supply chain. In order to do it, we may refer to the research article Integrating business processes by Rodney McAdam and Daniel McCormack. In this work, the authors explore various approaches to restructuring and provide examples of implementation. First, according to the scholars, there are three main reasons why companies choose to restructure themselves:
- attempt to strengthen the position in the market or even to become best in some industry (McAdam & McCormack, 2001, p 115).
However, the underlying cause of this measure is the lack of flexibility. The thing is that unlike small enterprises large companies are usually less responsive to the changing environment because participants are often isolated from one another and cannot effectively interact (McAdam & McCormack, 2001, p 117; Child, 2005, p 357).
In this article, the scholars analyze several cases of integration processes within the company. For example, they mention such concepts as lean production and Toyota. This automobile giant insisted that its suppliers should to operate nearby (McAdam & McCormack, 2001, p 116). The major peculiarity of this method is that it enables to cut operation costs and establishes quick flow of information. Lean manufacturing also helps to make the process of manufacturing more time-efficient (Mentzer, 2001, pm 186). This is one way to incorporate business processes and supply chain. This evidence exemplifies strategic decisions, made by the management and shows that restructuring can make the firm more productive.
Nortel Networks case
Rodney McAdam and Daniel McCormack examine the case of Nortel Networks. It is considered one of the largest manufacturers of telecommunication equipment. In this sphere, technologies are evolving almost on a daily basis. Nortel management realized that the success could be achieved only by quick responsiveness and constant innovation.
Therefore, they invested considerable capital in order to purchase many data networking businesses such as Bay Networks and this brought them to the forefront of this industry, because they were arguably the only company which was manufacturing both data and voice communication equipment (McAdam & McCormack, 2001, p 122). In part, this case illustrates the merging of supply chain and business processes because this enterprise simply bought the suppliers, which were most valuable.
Yet, this is only one facet of the reorganization. Apart from that, we should not overlook their relationships with the customers, who can stay in direct contact with suppliers; namely, we need to mention the so-called “customer focused teams” that keep track of manufacturing process and ensure timely delivery (McAdam et al, 2001, p 126). The presence of such teams practically eliminates the possibility of controversies of conflicts.
Such approach gives them advantage over their competitors (2001, p 128). Rodney McAdam and Daniel McCormack state that in the vast majority of cases, large enterprises seldom try to integrate business processes with the supply chain, but the examples of Nortel Networks and Toyota show this change is both cost and time-effective.
To conclude, we have discussed possible strategies, which aim to improve operations in the enterprise. Their essence lies in close collaboration between the manufacturer and supplier: occasionally, they even merge into a single entity. The major benefits are better coordination, low operating costs, customers involvement and time efficiency.
John Child (2005). Organization: Contemporary Principles and Practice. Blackwell.
John Jeston, Johan Nelis (2006). Business process management: practical guidelines to successful implementations. Butterworth-Heinemann.
John T. Mentzer (2001). Supply chain management. SAGE.
Rodney McAdam, Daniel McCormack (2001). Integrating business processes for global alignment and supply chain management. Business Process Management. (7), 2 pp 113-130.