Global Supply Chain

Posted on: 12th May 2023


Page 1-Where does the data for metrics come from, and who within the organization should receive KPI reports?

Page 2-Why are service level agreements needed in the logistics sector?

Page 3- What is meant by supply chain vulnerability?

page 4-Discuss the relevance of the Sarbanes-Oxley Act 2002 (SOX) to logistics.

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Global Supply Chain

Section 1: Where does the data for metrics come from, and who within the organization should receive KPI reports?

Certainly, the data for metrics arise from three distinct functions within the supply-chain network: receiving, put-away, and inventory accuracy. For the case of the receiving metrics, a consideration is made for receiving products into the storage facility or warehouse (Khan & Yu, 2019). Therefore, the receiving metric accounts for one of the most significant transactions. The relevant data for this function emerges from; delivery paperwork records, purchase-order numbers, lot numbers, matching-part records, and physical inspection reports (Kwak et al., 2018). The source of the data metrics is fundamental.

In reference to the put-away metrics, attention is set to the physical movement of the product immediately after it has been input to the relevant IT or information technology systems. The destination is the carton or pallet point or location where the product is stored (Sweeney et al., 2018). The number of units of the pallets for the put-away process is an essential metric and the percentage of the total product that has been put away within a stipulated time frame (Kwak et al., 2018). The metrics established for inventory accuracy include the following counts-oriented elements; empty-cycle, part, random, and cycle.

The cycle counts emerge from the inspection report of the warehouse. Further, the random counts arise from assessing the cycle counts of the inventory stored in particular pallet points within the warehouse (Mangan & Lalwani, 2016). For the part and empty-cycle counts, the metrics are established from all the stipulated locations within the warehouse and the locations that lack stock within the warehouse respectively (Sweeney et al., 2018). Therefore, the managers serving within the operational units should be responsible for receiving the particular KPI reports.

Section 2: Why are Service-Level Agreements needed in the Logistics Sector?

In logistics, a service-level agreement (SLA) refers to a contractual understanding or agreement signed by two parties; usually, a corporate entity or company and a registered vendor stipulate the following details (Kwak et al., 2018). They include; purpose, the scope of responsibilities for the two parties, services to be offered, relevant KPIs (key performance indicators), a model for tracking (assessing) KPIs, and the consequences for non-compliance or non-fulfillment (Kwak et al., 2018). The SLAs help manage supply-chain operations for the logistics managers due to the multiple advantages involved.

The service-level agreement (SLA) presents high efficiency in transactions since it offers a high level of transparency. In addition, the SLA establishes a reliable feedback schedule that promotes regular and reliable communication between the two parties (Sweeney et al., 2018). Further, the service-level agreement helps develop strategic or key priorities, goal-heads, and needs that emerge in the probable points challenges from the beginning of the supply-chain operation (Mangan & Lalwani, 2016). Therefore, the advantage of the equalization of the relevant expectations within a baseline provides the two entities with a reference platform during the evaluation process of the KPIs (Sweeney et al., 2018). Further, the service-level agreements promote mutual understanding between the parties by developing a model for the measurement of the KPIs.

Thus, the SLA lays out the expectations of each party; hence, in the event that there emerges incompleteness in the fulfillment of the duty of any of the parties, then the SLA serves as a reference point for the performance measurement (Khan & Yu, 2019). Furthermore, the inclusion of renegotiation and breach-of-contract clauses in the service-level agreement helps the two parties in the resolution of disputes and conflicts when any misunderstandings arise (Mangan & Lalwani, 2016). In essence, the service-level agreements help to promote cordial business relations between the transacting parties within the supply-chain operations (Khan & Yu, 2019). Further, the SLAs are effective and present ease in use; thus, the element of contractual power from the integration of a clause of indemnity.

Section 3: What is meant by Supply-Chain Vulnerability?

The supply-chain vulnerability may be defined as significant exposure to severe disturbances that emerge from risks operating within the supply chain together with the risks that arise externally from the supply chain (Mangan & Lalwani, 2016). It is imperative to understand that modern supply chains have become complex and characterized by multiple information and physical flows geared towards effective and efficient delivery of goods with accuracy in quantities, timeliness, and cost-effectiveness (Khan & Yu, 2019). There may be internal as well external risks associated with a supply chain network; thus, the supply-chain managers must be keen to understand the degree of vulnerability facing a given supply chain (Mangan & Lalwani, 2016). In this regard, the management function of supply chains must be quick to assess the aspects of potential risks and design strategic plans to address the particular risks.

In analyzing and assessing the supply-chain vulnerability, a few factors and elements must be considered. They were first investigating the elements that have disrupted supply chain operations in the past (Kwak et al., 2018). For instance, a supply-chain manager would identify a security factor such as robbery or vandalism of a company truck that interrupted a supply chain operation. Certainly, managers should be keen to identify the weaknesses within the company’s internal operations, such as manual records of production units; thus, the internal risks contribute to the supply-chain vulnerability (Kwak et al., 2018). Further, the analysis of near-misses scenarios such as lateness in delivery of goods to customers is an essential factor in understanding the supply-chain vulnerability. Indeed, manufacturing companies often experience the risk of a shortage of key sources or raw materials involved in producing goods (Sweeney et al., 2018). When such a situation occurs, the supply-chain operations are halted; hence the business is significantly affected; therefore, the impact of the supply-chain vulnerability on the production entity is exposed.

Section 4: Discuss the Relevance of the Sarbanes-Oxley Act 2002 (SOX) to Logistics

A professional report from PWC, Price-Waterhouse-Coopers, states that the Sarbanes-Oxley Act of 2002 is one of the essential pieces of legislation in the United States that focuses on public accounting matters and financial disclosure and corporate disclosure governance (Khan & Yu, 2019). Indeed, on the surface view, the law focuses on the essence of financial statements and the persons or professionals involved in preparing them and communicating their contents to the investors within the public sphere. It is paramount for finance managers and the company executives to scrutinize the assumptions behind the financial statements to minimize risks associated with the lack of full disclosure by the management (Sweeney et al., 2018). Thus, the view above helps to highlight the congruence between the Sarbanes-Oxley Act of 2002 and the world of logistics.

Admittedly, the law fails to refer directly to the function of supply-chain management or operations, but in modern practice, line managers are required to develop a higher degree of confidence that goes beyond the financial reports. Thus, the finance officers usually express interest in gaining knowledge linked to the transparency of the supply chain, especially on the elements of the source and the distribution channel (Kwak et al., 2018). On the other hand, the logistics managers have pointed out that the significance of the legislation is the aspect of control whereby managers are mandated to know the undercover happenings in their departmental operations. For instance, for logistics companies, compliance with C-TPAT (Customs-Trade-Partnership-Against-Terrorism) is an approach in support of the legislation Sarbanes-Oxley Act of the year 2002 since it aims at drawing transparency on the entire supply-chain framework (Mangan & Lalwani, 2016). Therefore, supply chain managers must seek to know the security challenges or issues involved in producing their goods based on the view that it will help to limit the risks associated with the lack of compliance with the Sarbanes-Oxley Act of the year 2002.



Khan, S. A. R., & Yu, Z. (2019). Strategic supply chain management. AG: Springer International Publishing.

Kwak, D. W., Rodrigues, V. S., Mason, R., Pettit, S., & Beresford, A. (2018). Risk interaction identification in international supply chain logistics: Developing a holistic model. International Journal of Operations & Production Management.

Mangan, J., & Lalwani, C. (2016). Global logistics and supply chain management. John Wiley & Sons.

Sweeney, E., Grant, D. B., & Mangan, D. J. (2018). Strategic adoption of logistics and supply chain management. International Journal of Operations & Production Management.

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