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Stakeholders

Stakeholders are any group of people that have an interest in a business, such as employees, owners, customers, suppliers, and the local community. Stakeholders can be hugely impacted by decisions a business makes with its supply chain.

Sourcing Supplies

Many businesses now source supplies globally, they often use less developed countries to maximise profit margins on each product. Sourcing globally could provide vital jobs in a country and create new employees, whilst increasing profit margins for shareholders and cheaper prices for customers. Sourcing globally is also likely to reduce business costs, this is because less developed countries generally pay much lower wages to employees, and can often source cheaper raw materials.

On the other hand, sourcing supplies in less developed countries could result in employees losing jobs in the UK and businesses potentially reducing the quality of their products. Businesses must satisfy customer needs by keeping a consistent quality level, irrespective of where production takes place.

Businesses must also decide how to store and distribute supplies and finished products. Some businesses keep supplies in a central location, whilst some send them out to individual stores.

Decisions that businesses make about their supplies can have a range of impacts, including costs, quality of finished goods, and reliability of delivery, the production process, price change, customer satisfaction, reputation, sales and profits.

Managers

Managers often have to make decisions about the supply chain and logistics. Managers are a very important stakeholder in this process; they may have to decide whether to source supplies locally or globally. Sourcing globally could have a big impact on the cost price of goods, but may also impact the quality. Sourcing globally will also extend and complicate the logistics element of the supply chain, something managers must deal with.

Managers may also make decisions on how to store and distribute supplies, and how the business should manage its stock. Each of these decisions may have a huge impact on other stakeholders in the business. Often managers have targets on both costs and sales, so they will be very interested in the quality of the goods and services provided by a supplier.

Employees

Employees are heavily affected by the decisions made by managers and shareholders about supply and logistics. For example, if a business decides to change the location of its manufacture to another country, employee jobs may be at risk. However, if a business decides to grow their supply chain, employees could have increased opportunities. Employees working conditions and wages could also be impacted by such changes.

Owners and shareholders

Owners and shareholders main concern is often profit, they will want to provide a high quality product whilst being able to achieve high levels of profit and high profit margins. They may also be concerned with the reputation of the business, moving production abroad may reduce quality and have a negative impact on sales and the reputation of the business.

Customers

Customers often have a lot of choice about where they shop for goods and services. Customers will expect high quality products, at reasonable prices, with a reliable service and good customer service. Changing a supply chain could affect any of these elements. It is important that a business does not focus solely on reducing costs, as this could have an impact on quality and make customers shop elsewhere.

The quality of the raw materials or services provided by suppliers can have an impact on a business’ reputation. For example, if supplies are regularly delivered late, this can negatively affect the business’ reputation because it will affect the business’ ability to deliver to its customers on time. If businesses provide high quality and reliable products, they will have a higher chance of gaining a good reputation with their customers.

Suppliers

Suppliers have a huge interest in the behaviour of their customers. Suppliers must be reliable and provide a fair price for their products, to ensure businesses do not go elsewhere. Suppliers must also make sure their prices are very competitive, being too expensive could mean that a business must source their products from overseas suppliers.

Government

The government has many interests in a business’ supply chain and logistics. The first interest they have is with the law, as the government wants to ensure that businesses stick to laws put in place to protect business and competition. Secondly, the government wants to ensure that businesses keep people employed and ensure money stays in the economy, so they sometimes give businesses incentives to keep production in the UK, or add tariffs to imported goods.

Local Community

Local communities are often impacted by businesses, especially by their supply chain and logistics. Decisions a business makes could impact employment, pollution and the environment, or an increase or decrease of traffic in the area.

If a business opens up a factory or warehouse, the local community would be positively impacted by an increase in employment, but may voice concerns about the negative impacts of pollution in the local area and an increase in traffic in the area.