Nishtha answered on
Jun 22 2021
SUPPLY CHAIN OPERATION OF BUNNINGS AUSTRALIA
Table of Contents
1. Analysis of the Existing Situation of the Company 3
ent Performance of Supply Chain 5
3. Supply Chain in the Off Shoring 7
4. Identification of Major Issues of Off Shoring 8
5. Recommended Solution for the Issues Identified Above 8
Bunnings is the leading retailer for home improvement and outdoor moving products. The company focuses on providing home improvement products in lowest price, backed and delivering best services. The company has business in Australia and New Zealand. The company has three divisions Bunnings trade, Bunnings and Bunnings warehouse. The Western Farmers company from Western Australia decided to go country wide with their hardware mega store called Bunnings and through clever research and purchases of local hardware stores slowly gained a foothold in all the states and cities in Australia.
The company expertise in hardware products and that is in lowest and reasonable prices. They have 250 stores in Australia. Bunnings continued working in the same way before, during and after. Most people tried Masters but found they prefe
ed Bunnings. It is not because of the sentiments of the customers. Nevertheless, the company better established, had a better range of products and had a friendlier staff. The report focuses on two types of supply chain, Offshoring, the practice of outsourcing operations overseas, usually by companies from industrialised countries to less-developed countries, with the intention of reducing the cost of doing business. Another one, reshoring is the process of returning manufacturing and production process in home country or company’s original country.
However, there are some issues Bunnings faced opting offshore supply chain systems. Company‘s offshore expansion and Woolworths onshore contraction failed in the UK. The offshore technique not be able to create value for the company and did not assists in reduction of the cost. Another issue is vote for home shoring, giving jobs to the people of foreign land increase unemployment rate and increase budget deficit in home country. Management issues, those who micromanage may find it difficult to control a team running on the clouds. Communication issues, language can be a big ba
ier if your team is not sharing a common native language (Bunnings, 2020).
1. Analysis of the Existing Situation of the Company
Offshore development is not the right fit for every situation. For example, founders that do not have a technical background should never outsource their product development offshore. The trade model of the Bunnings includes three partners that are builders, trades, business and organisation. While the business and trades share 33% and 44% respectively of the total revenue generated. The channel of market of the business and Business & Organisations are Stores & Trade Centres.
Moreover, in case of the trade its stores. Every business expose to the external threats in the environment. It includes fluctuation in demand, global competition, increasing cost of the raw material, labour cost and political threats and change in policies. There are two potential competitors existing in the market .There is Woolworths having share of 8% stake of the vast Australian market share and uses its subsidiaries such as Home Hardware and Timer, Thrifty Link and Masters Home Improvement.
Another competitor is Metcash, which has a 7.3% market share and uses its two subsidiaries: True Value Hardware and MITRE Bunnings is cu
ently the market leader in Australia comparing with its competitors. Bunnings management has created a culture. Even though it is a massive company with hundreds of locations, it has retained a friendly neighbourhood vibe. Bunnings has strong relationship with its partners and suppliers (Bunnings, 2020). The cu
ent model of the Bunnings somehow struck in the middle with no differentiating positioning or competencies. The company has to change its product styles and services as it operating in different country.
For example, UK is a small island with small houses, not much big spaces for stuffs. Small kitchens, small rooms and small kitchen, there is a demand of small storage unit. The company cost of running large edge store is increasing due to heavy rents, higher utility bills and wage legislation. The company does its intergradation of the product in a way, first supplier has to send and receive transaction electronically. Company confirms it and sends advance-shipping notice. The inventory and the EDI (Electronic Data Interchange) is connected if vendor is the Bunnings vendor. By applying EDI to the organisation, management can facilitates many processes in the company with automatic information processing, reduce administrative duties and eliminate data entry e
This system enhances the productivity and allows more businesses to take on more operations with a fewer human involved. With EDI technology, the whole process done in a matter of seconds due to the automated process that allows for prompt fulfilment of tasks like registering and balancing validation. However, the issue is Transparency of Business Processes. Controlling and coordination organisation must have a comprehensive, up-to-date view on all operations; clear understanding of interconnections between these operations and agreed procedures for dealing with different process flows. Bunnings faces some issues facilitating the transparency in its supply chain management.
Another issue is advent of e-commerce; demand for a large number of unique items with relatively small quantities sold is on the rise. These long-tail items suddenly pick up sales and quickly stocks out. Variances like these are naturally hard to predict, making inventory planning notoriously difficult. Most organisation as Bunnings do not be able capitalise on this demand because (given the small volumes) they are not aware of it.
ent Performance of Supply Chain
As stated by Saberi et al. (2019), organisations think that Supply Chain Management (SCM) is a sort of management framework under IT. SCM is really a "network", which comprises of numerous players. A conventional structure of Supply Chain is as simplistic as the relationship between supplier, manufacturer, wholesaler and retailer. Through the channel association of these divisions along with the whole supply chain network who cooperate toward the shared objective of building customer value, SCM enables organisations to react with the...