Introduction
Executing business activities on a global platform demands a well-planned strategy that is vibrant and competent of handling risk and the different challenges of international trade. Business organisations that aspire to take their products or services beyond the domestic market are dealing with the challenge of making the appropriate sourcing decisions, being practical to constant changes in the global world, linking trade conformity with business requirements, offering free trade agreements, lowering duty and hindrances and remaining ahead of the competition (Ruan, 2007).
This process also requires the cost of managing in-house resources to remain competitive in the constant changing compliance environment and executing effective operations. Irrespective of all the issues and challenges, companies that effectively implement and carry out their global trade process experience remarkable operational and cash flow benefits (Varley, 2014). This essay highlights the global trade distribution process implemented by the German’s leading and famous automobile manufacturer Mercedes-Benz.
Global Trade Distribution Processes in Mercedes-Benz
Mercedes-Benz is one of the most successful and leading automobiles companies across the globe. In the year 1926, the company was established by Gottlieb Daimler and Carl Benz. The company is headquartered in Stuttgart Germany and has different divisions including vans, Daimler trucks, buses, Mercedes Benz cars and financial services. The company has been continuously implementing the innovative technologies since its foundation with the aim of becoming a pioneer in automotive engineering (Bass, 2007). The company focuses on offering high quality automobiles to attract large number of customers. The company aims to create the best possible automobile to make its customers happy and exceed the expectations of the customers.
Mercedes-Benz accepts the complexity and difficulty out of global trade management. The company’s global trade distribution process enables the Mercedes-Benz to provide solutions or measures that are tailored to its consumer’s individual import and export trade operational demands or requirements. The company helps its clients in evaluating their current supply chain and other important operations, and measuring them against industry best policies and processes. It facilitates the company in focussing its approach to international trade on better performance, appropriate data management, risk alleviation and process standardisation.
Flow chart for the global distribution process
The global trade distribution process not only contributes to the actual movement of trade, but also towards the capacity and potential to move investment, technology, finance and labour across the borders of nations. The global trade distribution process of the company involve minimising inventory costs, lowering order fulfilment cycle, enhancing acquiescence and increasing profitability by improving whole cycle times and ensure better management of import and export transactions (Dennis and Harris, 2003).
The decision of Mercedes-Benz to establish its distribution operations across the world helps the company in strengthening transportation infrastructure, logistic network and highly skilled workforce. The business environment of United Kingdom assists the company in growing and expanding Mercedes-Benz’s trade distribution processes globally, and in return, this investment facilitates in generating jobs and motivating future economic development opportunities across the globe (Osland, 2003).
Figure1: Global Trade Distribution in Mercedes-Benz
(Source: http://www.mse-solutions.com/fileadmin/user_files/image/supply_chain_processes_en.png )
Mercedes-Benz is moving at fast pace systematically with the innovation of its factories and that includes a combination of production and logistics operations. These systems are considered as the significant elements in maintaining the flexibility in today’s highly competitive car markets. The production and logistics frameworks of the company have developed and spread over the years and the entire process is showing its age (Birkbeck, 2011). A new SAP based logistics and production system is implemented by the company to enhance flexibility and develop support for the business activities.
In order to improve the supply chain management process, an ambitious project was proposed by managers of the company under the name “Automotive Supply MFA”. This project consists of material planning, warehousing, delivery goods, congregation line supply and parts shipment. Implementation of this project has resulted in saving of time and expense when products reach the assembly line quickly. The innovative SAP configuration works on modules. They involve materials and warehouse management, sales distribution and production planning.
Figure2: Supply chain management in Mercedes-Benz
(Source: http://server-e9-11.hosting.imerja.com/images/2011/1/1_unctad_cottonsc.bmp)
Recently the company has invested more than three billion Euros in Germany to realign its production organisation for passenger cars. The company has invested the amount to enhance capacity and upgrading its passenger cars and power-train plants. In Innovative organisational models, main focus is given on vehicles and power-train product architectures. The managers of the company work with the aim of constant growth and significant increase in production process. The company has taken effective measures to enhance the capacity of its global trade distribution operations by appointing a new supply chain partner. Nowadays, most of the businesses operate globally; therefore, in order to perform effectively in the global marketplace, it is important for the company to have a better understanding of the effects of global distribution process. The company has hired supply chain procurement systems specialists to develop visibility of supplier and management of vendor. This system implements an evidence-based strategy to evaluate and authorise proficiency of suppliers to enhance financial health, environmental performance, customer service and corporate social responsibility.
Recommendations
Though the implementation of SAP and other innovative System assists in meeting and fulfilling demands of customers but addition of new criteria in such system can also help in meeting new regulations or changing demands (Ritzer, 2009). As the risks posed by various suppliers vary in nature, so these assessment can be made applicable by modifying needs according to the specific tasks each will execute. It is recommended that the company should explore more innovative methods and processes of productions tracking across its clothing brands.
The implementation of innovative technologies in Mercedes-Benz will assist company in creating production tracking solutions for the global trade distribution processes. This in turn helps the company to supervise transparency in its global trade distribution processes across various ranges (Jones and Robinson, 2012). It is important for the company to achieve the high standards for global distribution processes and implementation of innovative assessment systems can help the company to improve supply chain management and profitability, while minimising risk and liability both for suppliers and Mercedes-Benz.
Mercedes-Benz in order to make high sales and profits needs to maintain an effective relationship strategy through well-organised customer relations, a guarantee to quality products and services and a commitment to customer service throughout global markets. The company is highly recommended to implement an innovative management information system within its existing operational framework to keep strict eye on each and every management function to effectively maintain global trade distribution processes.
References
Birkbeck, C.D.2011. Making Global Trade Governance Work for Development: Perspectives and Priorities from Developing Countries. Cambridge University Press
Dennis, C., and Harris, L.2003. Marketing the e-Business. Routledge
Osland, J.S. 2003. ‘Broadening the debate: the pros and cons of globalization’. Journal of Management Inquiry, 12 (2), pp.137-154
Ritzer, G. 2009. Globalization: A basic text. Singapore: John Wiley & Sons.
Ruan, J. 2007. Essays on Technology, Trade, and Welfare. ProQuest
Varley, R.2014. Retail Product Management: Buying and Merchandising. Routledge
Bass, C. 2007. Mercedes Benz 'Pagoda' 230, 250 & 280SL: The Essential Buyer's Guide. USA: Veloce Publishing Ltd.
Jones, P. and Robinson, P. 2012. Operations Management. Oxford University Press.
