Culture of Supply Chain Management
South Korea falls under the category of countries with global integration and a vast and sophisticated economy. A well-structured supply chain is necessary for success in the increasingly globalized and competitive business environment. South Korea has a supply chain management system that is cultured so that all their business services are well coordinated. The logistics services have been merged with the supply chain services (Kim & Song, 2019). Services provided are tailored to meet the standard performance benchmarks. All stakeholders, including suppliers, retailers, analysts, operational staff, and customers, have direct relations and work closely. The market is mainly dominated by second-tier and third-tier retail stores. Some agents offer sales services for foreign products and services.
Logistic Distribution
Logistics play a crucial role in managing and enhancing trade locally and internationally. In South Korea, it has become rapidly growing. South Korea is a peninsula and therefore utilizes maritime and air transportation for goods entering and leaving the country. Domestic logistic distribution is mainly by road and rail. Air transport mainly manages highly perishable and urgent goods, including vaccines and fresh produce (Kim & Song, 2019). The distribution methods adopted, however, entirely depend on the product. Newly discount stores and e-commerce distributor platforms have emerged to replace the small family-run stores, street vendors, and stalls.
Supply Chain Challenges
With rapid advancements in technology, there has been rapid E-commerce growth. People have opted to shop online especially following the COVID-19 pandemic. Traditional suppliers have been forced out of the market (Oh, 2019). Shortage of labor and workforce has handicapped manufacturing and shipping companies. This is because their product does not meet the demand in the market. Inadequate transport services for organizations that depend on them always face supply chain breakdowns. The sector also faces high employee attrition rates as the aging workforce quits (Oh, 2019). This is primarily due to the work-life imbalances associated with the work’s nature. The challenge of limited or insufficient visibility has also impaired the sector’s effectiveness. As most seek to adopt technology for their supply chains, they lack data management abilities (Oh, 2019). Using more than one third-party logistics to fulfill all orders can result in patchwork. This is primarily due to the disconnect between the services offered and the specific needs.
Supply Chain Opportunities
Though faced with many challenges, supply chains still have opportunities to explore. There is a reduced overhead cost due to more precise predictions of demands. This has enabled the companies to manage the overhead costs accrued to the storage of slow-moving inventory (Kim & Song, 2019). Supply chain data analysis enables corporates to identify potential risks. This opportunity has led to improved risk mitigation and early precautions. The total cash inflow has significantly been improved through improved decision-making. Companies have been able to implement cost-effectiveness that has eliminated wasteful spending.
Practices to be Emulated in Saudi Arabia
Countries such as Saudi Arabia can copy various practices from South Korea to improve their supply chain management. Such applications include multisource for supplies to meet the market demand. Like in South Korea, Saudi Arabia should opt for nearshoring by companies reducing their geographical dependence. A vast coverage is more expensive as it is complex and involves several parties. Ecosystem partnerships between suppliers, retailers, and consumers will aid in smooth operations. Deployment of technology in the supply chain is essential in managing various systems and for data management that will facilitate success.
References
Kim, K. H., & Song, S. H. (2019). A study on the effect of win-win growth policies on sustainable supply chain and logistics management in South Korea. The Journal of Industrial Distribution & Business, 10(12), 7-14. Web.
Oh, A. S. (2019). Development of a smart supply-chain management solution based on logistics standards utilizing artificial intelligence and the Internet of Things. Journal Of Information and Communication Convergence Engineering, 17(3), 198-204. Web.