SUPPLY CHAIN AND LOGISTICTS

ASSIGNMENT

Prepared by : Syed Muhammad Farrukh

Azeem

Table of Content

Executive Summary. . . .. . . . .. . . ... . .. . . .. . . . . . . . . . . . . . . . .. . . .. . . . . . . 4

1. Introduction . . . . . . . . . .. . . .. .. . .. . . . . . . . . . . . . . . . .. . . .. . . . . . . . . 5
2. Mission . . . . . . . . . .. . . .. . . . . . . . . . . . . .. . . . .. . . .. . . . . . . . . . . . . . .. . . . 5
3. Organisational goals . .. . . . . . . . . . . . . .. . . . .. . . .. . . . . . . . . . . . . . . . . .. .5
4. Sustainability- Supply Chain Strategy. . . . . . . . . . . . . . .. . . .. . . . . .. . 5
5. Pillars of Plan A. . . . . . . . . .. . . .. . . . . . . . . . . . . .. . . . .. . . .. . . . . . . . . . . 6
6. Revival of Supply Chain :. . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . .. .. . . . . 6
6.1 Successful Steps for Supply Chain. . ..6
7. Drivers for Sustainability of Supply Chain Management. . . . . . . . .7
7.1 Brand Trust. . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . .
7
7.2 Operating Cost. . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . .
.7

7.3 Managing Product Lines. . . . . . . . . . . . . . . . . ... . . . . . . . . . . ... . . . . . 7

7.4 Corporate Public Risk. . . . .. . . . . . . .. . . ... . . . . . . . . . . ... . . . . . . . . 7
7.5 Ethical Investment Funds. . . .. . . . . . . . . . . ... . . . . . . . . . . ... .. . . . . . .. .7
8. Customers perception. . . .. . . . . . . . . . . ... . . . . . . . . . . ... . . . . . . . . . . . . 8
9. SSCM approaches and tools (Metrics, Criteria, Measures) . . .. . . . . . . . . .8
9.1 Communicating Company sustainability policy and values. . .. . . . . . . . . ..8
9.2 Pre-qualification Criteria . . .. . . . . . . . . . . ... . . . . . . . ... . . . . . . . ... . . . . 8
9.3 Purchasing Specifications . . .. . . . . . . . . . . . . . . . ... . . . . . . . ... . . ... . . 9
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9.4 Internal Training . . .. . . . . . . . . . . . . . . . . ... . . . . . . . ... . . . . . . . ... . ... . 9

9.5 Supplier Customer Partnership and Alliances . . .. . . . . . . . . . . ... . . . .9
9.6 Validation. . .. . . . . . . . . . . ... . . . . . . ... . . . . . . . ... . . . . . . . ... . . . . .9
9.7 Success Factors. . .. . . . . . . . . . . ... . . . . . . . ... . . . . . . . . . . . ... . . . .10
10. Conclusion. . . .. . . . . . . . . . . ... . . . . . . . . . . ... . . . . . . . . .. . . . . . . . 10
11. Recommendations. . . .. . . . . . . . . . . ... . . . . . . . . . . ... . . . . .. . . . . 11

Executive Summary

Supply Chain Management is the management of the upstream and downstream value-added
flow of material or goods which includes the supply of raw materials, processes of making
products and its warehousing, Inventory management and transportation from source origin to
final delivery of goods and material through interconnected networks or channels. The whole
mechanism is integrated with design, planning, execution, control, logistics and monitoring of
supply chain activities. Supply Chain Management is a crucial issue in todays competitive
business world because profitability and profit growth of a company significantly depends on the
effective and efficient of supply chain management.
In context to Marks & Spencer, the globalization of markets had offered plenty of opportunities
for increased sales, but Marks & Spencer did not apply the same logic to its supply chain
management, which is the key factor for sale decline in domestic and international markets in the
era of 90s. Contrarily, its competitors were able to procure cheaper products from their global
supply chains. These competitors and their suppliers with shorter production cycles were often
less costly and quick response to the leading fashion houses of that era. Whereas M&S products
was no longer perceived to provide sufficient competitive advantage. M&S supply chain was no
longer responsive for the needs of modern global retailing due to consumers increasingly
fashion-conscious in their pursuit of the latest products and designs. In short, M&S was not able
to compete in a rapidly developing global marketplace.
Marks & Spencer revitalized their own-brand by reducing operating cost and formalizing ethical
supply chain management policy. The mission of the company is to build the sustainable
business, through consistent, profitable growth to make sure that customer and stakeholders can
always trust in companys products. Marks and Spencer succeeded by implementing the right
thing in the right way.

1. Introduction:
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Marks business was started by Michael Marks in 1884.[10]He came with the strategy to sell
durable merchandise at economical price. In 1894, Thomas Spencer joined the business as a joint
partner and later form a public limited company named as Marks and Spencer in 1926.[10] The
company was involved in selling cloth and food production. Thus, M&S known as matured
brand. Till 1998, the business expanded to almost 500 Marks & Spencer stores around the world.
After 1999, Marks and Spencer faced sales decline, profit collapse and market share fall. Its
reputation was declined due to their attitude towards its worker. They also failed to manage
Supply Chain activities of national and international markets and in response to what competitors
were doing to remain in competitive market. They were facing critical problems in the marketing
strategy for international market penetration as well as supply chain management.
The main aim of Marks & Spencer is to become the worlds most sustainable major retailer by
2015. M&S introduced a strategy of 100-point plan to improve the sustainability of the business
called Plan A. M&S has upgraded the existing system by heavy investment that was conducive to
support their business. To achieve this goal Marks and Spencer has introduced a new strategy in
2007.They have promoted the speed of activities to enhance the level of M&S business. The
overall goal aimed to create long-term sustainable value and growth in market share. M&S have
focused on three priorities viz. restructuring their supply chain, implementing new IT systems
and driving operational execution. These changes were succeeded to deliver long-term benefits
such as improved cost efficiency, driving sales growth and created a platform for future
profitable growth.

2. Mission:
Mission of Marks and Spencer focuses primarily on quality, which is the most important priority
of the company. M&S wants providing new quality products in the areas of cloths, food, home
and financial services and offering really high quality goods at a very affordable price leading to
consumer receiving good value for money. [6]

3. Organisational goals
To increasee sales and market share in retailing
To continuee differentiation strategy by delivering freshness, quality and innovation
To become the worlds most sustainable major retailer by 2015[8]

4. Sustainability- Supply Chain Strategy

The main aim of Marks & Spencer is to be the worlds most sustainable major retailer by 2015.
To gain this in 2007 Marks and Spencer has introduced a new strategy called Plan A. Plan A
Strategy is 100-point plan to improve the sustainability of the business. [4]
Moreover company also pays attention to the persistence of clothes covered by Marks & Spencer
Technologies. Company spends as much time and energy to prepare and test their food.
Important goal on that level of business is to produce healthy food. To achieve it Marks &
Spencer is working on eliminating harmful fats, excess salt and sugar from its food preservatives.
The main objectives of Marks & Spencer set in Plan A included:
1. reducing the amount of waste generated by factories and stores of Marks & Spencer
2. protecting natural resources of the earth through greater use of recycled materials
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3.
4.
5.
6.
7.

promoting of healthy lifestyles

promoting and applying the principles of Fair-trade
introducing greater diversity of organic products
creating new jobs
the use of technology to eliminate the adverse climatic changes and protection of animal
rights
The issues handled through Plan A lies into three categories.
1. People: its own employees, and those employed in its supply chain
2. products: with an emphasis on producing high quality, value for money goods that have
positive environmental and social benefits.
3. community: recognising the companys role in helping to create and maintain good
places within which to work and live.[5]

5. Pillars of Plan A:
Pillar 5.1. Climate change is aimed to reduce operational emission of carbon by 35% and
make operations carbon neutral.
Pillar 5.2. Waste is aimed to help customers reuse and recycle products and packaging of
M&S and reduce companys operational waste by 25% and construction waste by 50%
Pillar 5.3. Natural Resources is aimed to use of natural resources in companys operations
Pillar 5.4. Fair partnership is aimed to ensure workforce and communities benefit in our
supply chain
Pillar 5.5. Health and wellbeing is aimed to promote healthy life style.[5]
All these activities shape brand image of the Marks and Spencer selling good quality
products taking into account persistence of environmental issues.

6. Revival of Supply Chain :

6.1 Successful Steps for Supply Chain
Delivered 35 m of cost saving
Warehouse consolidation in progress
Opened Distribution Centre
East Midlands site planning
Permission underway
Food depot voice picking rollout
International direct deliveries
SAP implementation.
POS software implementation
Store stock systems
Food forecasting pilot underway
HR transformation
Shop your way rollout
Lastly, M&S have invested in systems and infrastructure in order to keep goods transported
directly to all international branches through speed up distribution and reduce export costs. In
addition to M&S online shopping is one of business area growth where most customer
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increasingly using websites to browse and look for a bargain. The retailers could offer the
customers a free delivery in order to keep them online dealing. [2]

7. Drivers for Sustainability of Supply Chain Management

The key interests of Marks and Spencer for introducing sustainability into their business can
be outlined in five main areas. All these issues have an influence on how sustainability within
the supply chain has been developed and managed by Marks and Spencer.
7.1 Brand Trust
As Marks and Spencer stocks only own-brand goods, there may be an expectation from
the consumer that all goods conform to similar criteria on issues such as safety, quality,
environmental and social impact. Ensuring Brand Trust means capturing and addressing
consumer concern across all product ranges. Brand Trust is one of the key drivers for
Marks and Spencers interest in sustainability. Brand Trust is an evaluation by Marks
and Spencer of what the consumer wants from a high-street retailer.
7.2 Operating Cost
Another key driver for sustainability is to cut the costs associated with the supply chain.
Operating cost drives aspects of sustainability within the supply chain. An example is the
clothing business, where flexibility in the supply chain is being achieved in the market
from identification of fashion, to contract tender specification etc.
7.3 Managing Product Lines
Many specific product lines need to have stricter or different specifications according to
customer demands. Key examples of this have been the introduction of organic range
products in foods, as well as labeling for the domestic consumer to enable informed
choice. The consumer needs to be reassured in these areas that these products meet
certain standards.
7.4 Corporate Public Risk
The Marks and Spencer supply chain is highly transparent to the consumer market
through the NGO and pressure group channels.
7.5 Ethical Investment Funds
There is a growing interest from investment fund management in developing assurances
of Corporate Social Responsibility (CSR) from the invested organizations.
It is clear that Marks and Spencer has been driven strongly by the consumer market
towards introducing sustainability. The two key areas have been consumer (and public)
pressure) and market evaluation.[7]

8. Customers perception
Marks & Spencer value the loyalty and confidence of customers and focus on striving to offer
the highest possible standards of quality, value, innovation and service. They will always try to
ensure that their labelling, advertising and other forms of communication are clear, honest and
accurate. M&S endeavour to meet customer satisfaction by anticipating different trends such as
stylish, flattering and smart. They welcome recognising and analyse the customers perception
through research with high level of customer requirements. They keep performing strongly as
consumers turn to trusted brands like M&S for impact on their financial services. [7]

9. SSCM approaches and tools (Metrics, Criteria, Measures)

To meet the needs of sustainability, Marks and Spencer has applied a number of tools and
strategies within the supply chain. These management tools include the application of
environmental criteria, ethical criteria, as well as safety standards issues as covered by:
9.1 Communicating Company sustainability policy and values
At a policy level, Marks and Spencer has developed the Global Sourcing Principles. In
accordance with these principles, Marks and Spencer directly contract for both goods and
services to ensure what Marks and Spencer believe to be acceptable standards, as well as keep
improving those standards. Marks and Spencer enforce these principles firmly among suppliers
and encourage their implementation further down the supply chain. These principles
include:
(a) Workforce Rights, including minimum -age of employment, regulated working
conditions in compliance with national pay rates.
(b) Labeling goods in line with Marks and Spencer agreement for production sites
environmental responsibility to national standards as well as improvement from the
supplier.
(c) Some of the social and ethical standards have been influenced by the involvement of the
Ethical Trading Initiative (ETI). Marks and Spencer is a member of the ETI and the ethical
standards within Marks and Spencer global sourcing principles in line with ETI framework
of standards.
9.2 Pre-qualification Criteria
For any global sourcing of goods, whether these are clothing or food, the global sourcing
principles apply. These are introduced to potential suppliers through Corporate Communications
within Marks and Spencer. The application of these principles is carried out within each business
unit through the procurement function at contract stage. When tenders for contract go out to
suppliers the global sourcing principles are used in the decision-making process.
Before any global or local contract is taken up within Marks and Spencer, a site visit is
undertaken to ensure that product and service specifications can be met. These specifications can
include issues of health and safety, environmental controls, and in the case of global sourcing,
adherence to the global sourcing policy.
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9.3 Purchasing Specifications

The direct interface between the supplier and Marks and Spencer is managed through the product
buyers within each business unit. Buyers are supported by product technologists from their own
business unit, who advise on specification issues for products and the process of production.
With some product groups the environment department supports the product technologist to
advice on key issues for product and process standards. For example fish sourcing, cotton and
wool.
9.4 Internal Training
The environment department is a corporate function, not aligned to any particular business unit
within Marks and Spencer. It is the environment department who is in a position to push issues
into the supply chain by education of the product technologists, as these people are the interface
with the supplier.
Training is often informal and based on product issues by the product technologists or the
environment personnel.
The Procurement functions have received formal training from an outside consultancy on
techniques necessary to integrate the global sourcing principles into their processes. From the
start Marks and Spencer require each supplier to implement the Global Sourcing Principles,
which establish a minimum acceptable entry standard into the Marks and Spencer supplier base.
9.5 Supplier Customer Partnership and Alliances
Marks and Spencer is a member of Project ACORN. As part of this project they work with a
number of smaller SME suppliers in an attempt to cascade environmental best practice principles
into their first tier supply base, with the understanding that this environmental training will be
cascaded further down the supply chain. Part of this process is an attempt to let first tier suppliers
take responsibility for undertaking environmental responsibility of their supply chains, rather
than leaving this to Marks and Spencer.

9.6 Validation
All production sites are regularly visited by Marks and Spencers own staff. Auditing processes
have a different focus depending upon where suppliers are based. Within the UK, most of the
emphasis is placed upon food safety and health standards. The audits of suppliers activities are
carried out through both the buyers and product technologists on site visits. The environment
department inputs into these audit mechanisms on various product issues where leading edge
environmental practice is expected. Audit mechanisms can be risk-based or product based. For
example, in the clothing area there is an environmental code of practice. Product technologists
carry out occasional quality checks against this code of practice on products by testing samples
from suppliers.

For some global suppliers, the audit mechanism is used to assess health, safety, environmental,
social and ethical criteria. Audits are determined for targeted high risk suppliers. As part of the
ETI membership, Marks and Spencer also works with an external consultancy to carry out some
audits on the companys behalf. Some audits are also done in conjunction with NGOs to reflect
transparency with ETI principles.
Where suppliers are found to be in breach of Marks and Spencers global sourcing principles,
actions may be taken:
"..Suppliers must not only apply these principles at all times, but must also be able to show
they are doing so. We will take action against suppliers who do not comply, which may involve
cancelling our orders and ceasing to trade."
Marks and Spencers Global Sourcing Principles, 2000).
9.7 Success Factors
Although the approach to supply chain sustainability within the Marks and Spencer is not
completely integrated between the various functions of environmental, health and safety and
ethical criteria, there are several organizational structures that make this company work well.
Technologists i.e. experts in particular product lines, who in turn are influenced by the
environment department, support buyers in each business unit. They are the key information
holders that can influence environmental standards introduction and improvement. Specific
product buyers and product technologists handle only those product suppliers; there is in-depth
product knowledge in dealing with those suppliers on hand. This leads to better suppliercustomer relationships, as well as a good understanding of sustainable product standards.
The Environment department is a corporate function rather than a business function. This means
they can influence all business areas. They also have input into the Corporate Social
Responsibility sub board, which feeds information into the PLC board and influences corporate
Marks and Spencer environmental policy. Standards for global sourcing are an embedded
process within the procurement process. Audits of production sites are undertaken on a regular
basis.[7]

10. Conclusion
1. In near future, it is possible that individual companies will not compete against
companies, but rather that entire supply chains will compete against other supply chains.
This will require whole supply chains to be tighter and have closer relationships. Adding
value through those chains would be a key feature of a successful supply chain
management approach.
2. SSCM managers are questioning if the current metrics used in supply chain management
are adequate to enable a shift towards the triple bottom line. They have suggested that
rather than present reduction of waste or percentage of on-time deliveries, metrics
should include the number of years that a company has remained a supplier to its
customer or the average life span of the customer base. Stable relationships with suppliers
building trust mechanisms will make supplier-customer influence easier.
3. Environmental management systems (EMS), such as ISO14001, can be a powerful tool
for incorporating environmental issues into supply chain management practices and

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relationships. However, an EMS is only as effective as the underlying corporate culture

and the level of commitment that the organization allow.
4. Governmental sustainable supply chain management approaches and tools are restricted
by the EU and National procurement rules, particularly regarding the pre-selection of
suppliers and post contractual obligations. The rules force public bodies to concentrate
more on tender specification criteria. These criteria are also true for other regulated
industries such as the utilities sector in procurement of large cost goods and services.
5. Many of the leading organizations do not use the term supply chain, but supply network
and engage in managing the supply network.[7]

11. Recommendations
Further research would be useful that would link all three triple-bottom line elements including
the financial aspects of operations. Other findings within the other research strands need to be
integrated with this research before methods to cascade sustainability through the supply chain
can be determined. There should be further research on development of business models of
successful supply chain management approaches e.g. what are the effects of applied tools and
approaches for the triple bottom line and what are the lessons learnt from successes and
weaknesses. There is a need for the development of a flexible portfolio of SSCM tools such as
strategic, tactical and operational, which are focused on the needs of different organizations.
These tools will need to be hard and soft. Hard tools e.g. SSCM performance measurement and
soft tools e.g. partnership, collaboration and networking methodologies.[7]

References:
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1- Lan Dayson (2009/10). Group Finance and Operations Director Fully year results [online]
available from <http://annualreport.marksandspencer.com/brand-and-marketplace/our-brand.aspx
>. [16th March, 2011].
2- M&S (2009). Quality worth every penny Annual report and financial statements [online]
available from <http://corporate.marksandspencer.com/file.axd?
pointerid=c25b7670e6e4420abd2403cb7a6149f4&versionid=c6167e6e5dc44b918eb9a277b921f
a23>. [16th March, 2011].
3- Retailed Gazette (2011). M&S to start work on new DC [online] available from <
http://www.retailgazette.co.uk/articles/ms-to-start-work-on-new- dc>. [16th March, 2011].
4-Marks and Spencer: How we do business Report 2010 [online] available from
<http://plana.marksandspencer.com/media/pdf/planA-2010.pdf> [11 March 2011]
5-Gyekye, L. (2010) Marks and Spencer's Plan A makes "good progress. Journal of Material
Recycling Week [online] available from <http://www.mrw.co.uk/marks-and-spencers-plan-amakes-good-progress-comment-update/3005441.article> [18 March 2011]
6- Grundy, T. (2004) Gurus on Business Strategy. London: Thorogood [online] available from
<http://up.m-e-c.biz/up/Mohcine/Book/Gurus%20on%20Business%20Strategy.pdf> [18 March
2011]
7-Supply Chain Strategy and Evaluation CASE STUDIES
Professor Martin Charter, Aleksandra Kielkiewicz-Young, Alex Young and Andrew Hughes
The Centre for Sustainable Design
[February 2001]
8-Grayson, D., Jin, Z., Lemon, M., Rodriquez, M.A., Slaughter, S., and Tay, S. (2008) A new
mindset for corporate sustainability [online] available from
<http://naomi.typepad.com/1000_cranes_blog/files/a_new_mindset_white_paper.pdf> [17 March
2011]
9-Heizer and Render ,Operations Management, 10e
10- A Short History of Marks & Spencer [online]
http://marksintime.marksandspencer.com/media/56669/short_history_of_m_s_for_w
ebsite.pdf

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