Establishing supply operations in developing countries or regions often involves

Question

Establishing supply operations in developing countries or regions often involves the so-called “last mile challenge.” Western companies need to adapt to poor logistics infrastructure, and unique institutional/economic environment and sustainability concerns in this effort in order to sell or buy product and services. Cases such as Nestle, Tetra Pak, eChoupal, Dabbawala in our class illustrate success supply chain strategies where companies are able to work with stakeholders (e.g. government agencies, NGOs, suppliers, and customers, etc) to confront such last mile challenge. How are these companies similar in terms of working with stakeholders and creating supply chains? Please conceptualize and elaborate the fundamental principles that capture such strategies.

Explanation / Answer

When a western country chooses to expand their operations in third world countries or developing countries, it will initially be a challenge to adapt themselves with the poor infrastruture and logistics facility. These problems more acute when there are language barriers. Expecially in country like India where each state has a separate language, Westerners might feel lost. All the states in India are different by their cultural beliefs, language and societal values. Hence establishing supply operations is big challenge to all the companies who are eyeing for expansion in developing countries.

With all the above mentioned disadvantages, companies still make it big in the industry due to their operational strategy. These companies merge with the existing companies here and study the political and the business atmosphere of the country for quite a few years. Once they are accustomed to the needs of the people and the society, they start their own operations by employing local people. This is one of the key principles to success for companies that operate in developing countries. It creates a strong relationship with all its stakeholders so that all are benefitted by the company. Further these companies never try to instill their practices in a foreign land rather, they try to adapt to the existing facilities which stands as a fundamental principle for supply chain management in their organization.

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