Solution
Shashank answered on
Jun 03 2020
How to attain agility in Australian supermarkets supply chains
How to attain agility in Australian supermarkets supply chains
Project Report
Executive Summary
The report takes a deep dive in understanding the ways on how agile supply chain can be achieved especially for Australian supermarkets The concept of agile supply chain has been considered as one of important issues for most business across the world. This has been making impact on the companies’ performance and also their profitability. The report analyses the requirement for agile supply chain and helps reader to understand the importance of it. The factors which are important for supply chain agility and how does it affect the business with the features that comes along with it. The Australian supermarket has been taken into consideration and three major ways have been provided which can help in attaining the agility in the Australian supermarkets supply chain. These methods cover different perspective which can be implemented for attaining the level of supply chain to global level. In the last section, the importance of big data has been discussed and the potential that it ca
ies to influence the future of retail market and supply chain agility. The report helps reader to understand the importance of agile business techniques with the perspective of supply chain and give them a holistic view of how can these processes result in transforming the business and give competitive advantage to them.
Table of Content
Executive Summary
1. Introduction
2. Background of industry issue
3. What is agile supply chain?
3.1. Definition
3.2. Key Features of Agile supply chain
3.3. Why it is required?
3.3.1. More about virtual integration
3.3.2. Impact on Profitability
4. Towards Supply Chain Agility: Australian supermarket
5. Achieving Supply Chain Agility in Supermarkets
5.1. Improving the dimensions of Supply chain
5.2. Through “Design of” and “Design for” supply chain
5.3. IT integration and flexibility
6. Future of Supermarkets Supply Chain in Australia
6.1. Big Data Analytics
7. Conclusion
8. References
1. Introduction
The growth of any business is mainly driven by the performance of its key verticals which acts like a “pillar of growth”. These verticals comprise of marketing, sales, human resources, operations, financial management and supply chain management. If any of the pillar starts malfunctioning it is imperative to either get a fix or replace it with more superior methods. Having an efficient supply chain can be blessing for a company as it can help in boosting the path of growth in various ways. Businesses takes years to manage their supply chain which can help in making their business profitable. The major challenges that world emerging startups are facing that is acting as a major hinderance in growth is lack of efficient supply chain. On the other side, many companies have emerged as business leaders at world level by ensuring that their supply chain is efficiently managed which can also help in assisting other process in the company.
With the growth of Australian retail sector, the supermarket chains are facing challenged in dealing with on how they should manage their supply chain. The consumer demand has increased has helped in boosting the industry but unable to manage supply chain is not making the situation very amicable for supermarket business.
2. Background of the industry issue
The globalization of retail industry of Australian has changed the market landscape for many players who were operating in domestic area. There has been rise in foreign players having systematic and strategically coordinated management of goods and services which help them achieving low cost and gain competitive advantage over others. The domestic players like Woolworths and Coles who have been major players in Australian supermarket industry and also the major market shareholder have been poached by international players. This has led these companies to approach supply chain consultancies to make their process efficient and create potential for scaling up. Driving efficiencies and competitiveness in supply chain network will help them counter the competition and drive down their excess cost which has been a hurdle in their business. With more international players like German Chain Lidl and Costco entering the market and offering huge discount to the customers, the need to make changes in supply chain strategy has never been more. To overcome the recent challenges, the organizations have been taking help firms from US and Europe to assist them in making better supply chain process. The companies have been looking forward for making investment in training and education both from the local market and also from outside their areas to ensure that they gain enough capabilities to make their future secure. The cost has increased for them in the recent time which has made the task of making profits even tougher.
With more options coming up for customer, the demand for fresh food items has also increased. The need to address this problem is of high importance as any delay can lead to losing their loyal customers. Although, domestic players have advantage over others in terms of having better understanding about the unique geography, scale, infrastructure availability and population of Australia, so getting them completely out of the race might take time even for the most efficient player in the international market. The issue comes up with high criticality as any disruption in the supply chain process can cause huge repercussions leading to extremely high cost. Hence, the importance of following the standardized process has increased and shifted their focus on adaptability which ensures the process runs smoothly like before. Reducing the customer experience to even average can be risky for long term sustainability of business. (Accenture,2018)
The companies have started investing in redeveloping the supply chain by improvising sophisticated business process management(BPM) capabilities. Firms like Webmethods which offer retails companies real time insights has helped in improving the performance in great manner. This has been done by identifying the bottlenecks and analyzing if their process can be improved. The strategical changes implemented by the supermarket chains have been focusing on achieving enhanced IT infrastructure and gain technical advancement. It has been increasingly realized that the ultimate aim that must be achieved for long term sustainable profit is agility in the supply chain process. The IT capability might become outdated with the changing technology but achieving agility will provide ability to adapt with any changing environment that business might face. (Braunscheidel, and Suresh, 2009) As a result, long term competitiveness can be achieved by the retail companies in Australia.
3. What is agile supply chain?
3.1. Definition
Agile refers to speed and ability and making the process agile is to develop an ability which works towards honing your skill and efficiency to achieve the target. Agile Supply Chain is refe
ed to usage of qualities like responsiveness, competent, flexibility and fastness to manage the supply chain entity on a regular basis. There is usage of real time data and up to date information which lean supply chain do not offer. (Agarwal, Shankar and Tiwari, 2006) As a result, leveraging features like this against demand forecast helps in improving the overall efficiency and productivity of the process.
3.2. Key Features of Agile supply chain
· Following an agile process helps in avoidance of potential shortages and reduction in excessive stocked inventory.
· Higher service levels are offered by companies following agile method even though lower inventories are maintained.
· Agile companies have proven research in performing better in various areas i.e. risk management, inventory placement, integrated planning, forecasting etc.
· The process is different from lean concept in various ways.
1. One of typical response of lean concept was to overstock inventory which is not the case in agile methodology.
2. The information gathered from lean supply chain is not used for making analysis (quantitative and predictive) which gives it disadvantage of forecasting future requirements.
As discussed above, Christopher (2000) has highlighted various characteristics that is required for a supply chain to be “truly agile”.
a. Market sensitivity: Leads to connectivity with end user trends
. Virtual: Reliability exist in terms of sharing information across the supply chain partners.
c. Network Based: Enables the organization to gain flexibility by taking advantage of the strength of expert players
d. Process Integration: High level of interconnectedness between the members present in the network. (Chen, Daugherty and Landry, 2009)
An elaborated diagram is shown below which highlights the features in detail:
Source: Modeling agility of supply chain ; Ashish Agarwal ; Ravi Shankar; M.K.Tiwari
3.3. The need of Agile Methodology
The process of operating the supply chain changes after agile practices are implanted. The use of lean might help in increasing the workflow of individual employees, but agile practices help in achieving more than this. With real time data modular and raw material reserve formulations which help in staying near to the end product. Also, it give opportunity for supply chain partners to work together and produce the amount of product according to the daily requirement unlike quarterly, monthly or yearly. The focus of agile solutions helps in improving the lean supply chain with better responsiveness and foster the relationship between supplier to customer to manufacturer. (Gligor and Holcomb, 2012.)
Due to change in environmental factors there might be change in demand of specific product from customers. Supermarkets and retail chains can adapt to high variety, sudden changes in volume and cater to the changes in the market in minimum possible time. This can be done by understanding the real time data and disruption in demand that have been caused.
3.3.1. More about virtual integration
We have understood that agile gives ability to the supply chain for responding towards the changes in the external environment which might turn out to be opportunities. This can be done by leveraging skills, assets and other important resources in the region they are operating. This
ings the need for virtual integration between the organizations which can lead to establish shared goals and communicate effectively across the supply chain. It can be seen as informal, flexible and dynamic relationship between various units and sectors which are part of the supply chain. This results in supporting and facilitating larger or complete supply chain initiatives which can lead to benefiting of various parts of supply chain. As a result, this paves a clear path for senior management to remain fully empowered by getting every individual unit fully involved.
3.3.2. Impact on Profitability
The real question that lies in the mind of leadership team of any organization is that if the changes that they are introducing in the system will affect their profitability or not. There is a continuous quest that goes on to ensure adequate measures are taken so that company’s profitability is not affected. The agile methodology provides a shield from challenges that comes with rapid technological changes, uncertainty in growth due to changing environment and dynamics of the market, decrease in the product life cycle etc. A supply chain which is agile consist of set of companies that exist as separate entities and have business interdependence. There is a link maintained between these companies by forward flow of materials and information feedback flow. This empowers these companies to a great extent with different expertise as it is practically not possible for them to have all the necessary resource in order to avail the opportunities in the market. Achieving agility helps in end to end coordination with suppliers and customers to integrate operations and gain competitive advantage in global market. As a result, these...