Managing Operations Of Brambles Limited: A Case Study

This is an individual effort.  The basis for this paper will be either a case assigned by your lecturer, or a service company chosen by yourself and discussed about with the lecturer. The case should be treated as a problem presented by your company’s top management for analysis and a recommended course of action.  

The purpose of this project is for students to analyse and improve real-world business operations by applying the knowledge learned in this unit. This project exposes students to important managing operations issues. Student will need to

1) Investigate a real-world Service business operation,

2) Measure the performance of existing business operations

3) Identify the corresponding business layout, location and flow of information,

4) Describe its supply chain strategy

5) Scrutinize the business quality aspects

5) Suggest alternative managing operations aspects, and

6) Evaluate the improvement of the newly suggested aspects 

About the Brambles service company

The report intends to analyze on the real- world business operations of the service company. The organizations that is selected for this study is Brambles Limited situated in Australia. Managing business operations is about making the work procedure right and involves higher level of integration of the enterprise resources for getting the product in appropriate place in proper way by keeping view on costs as well as time considerations. Effective management of operations influences the organizations ability to compete and also provides huge opportunity to enhance its productivity and profitability (Coelho and Laporte 2014). As Brambles limited is a service company, it has different processes involved beginning from understanding consumer needs to attaining feedback on service.  This report mainly reflects on the importance of managing business operations within the service organizations.  The study focuses on the performance of the existing business operations and business quality aspects of the Brambles limited. The corresponding business layout, location and flow of information are also identified in this study. The supply chain strategy of Brambles limited is also elucidated in this report. The alternative managing operations aspects of this company are recommended in this study. Furthermore, the improvement in newly suggested aspects of managing operations are also evaluated in this study.

Brambles limited is ASX (Australian Securities Exchange) listed supply- chain logistics organization that is headquartered in Australia. This company operates in more than 60 nations primarily through CHEP and IFCO brands. Brambles is a world- leading service provider of the supply chain logistics solutions that is based on provision of crates, containers and reusable pallets for shared utilization by several participants throughout the supply chain. The enterprise also operates container logistics businesses that serves the aerospace, oil as well as gas and automotive sectors. This company helps moves several goods to the people in various places under the brands CHEP and IFCO. For this reason, this organization makes real contribution to better sustainable future. Brambles created one of the most sustainable business in the globe through reuse as well as share of its platforms under the framework named as ‘pooling’. As of 2017, Brambles employs of over 14000 people and owns 590 million pallets, containers and crates.  This entity primarily serves fast- moving consumer products, beverage, fresh produce, retail and manufacturing sectors. The scale as well as density of Brambles network permits faster approach to its customer changing requirements.  Brambles mission is to be globe’s leading service provider of innovative solutions in the support service and utilize its outsourcing expertise for adding exceptional value to the customers. This business also attempts to engage its customers through various sector initiatives as well as strategic forums. Moreover, Brambles focuses on offering goods and services which deliver them competitive advantage. This company is basically committed to improve experience of customers of its goods and services (Brambles Corporate Site. 2018). 

Performance of existing business operations of Brambles

Brambles operating framework follows the principles of circular as well as sharing economies that create highly effective supply chains by decreasing operating costs as well as natural resource demand (Swink et al. 2017). Besides this, by promoting reuse of its assets among the several parties in supply chain, this organization provides consumers sustainable as well as efficient alternatives to utilize disposable goods or manage its proprietary platforms. Recent statistics reflect that the company has attained huge growth of sales revenue in every operating segments. The return on capital invested (ROCI) remains strong at over 17% and the cash flow from the operations improvement as well as net debt declined by about US $49.1%. In the financial year 2017, the final dividend of around AU 14.5 leading to rise in 30%. The other significant items of about US $1436.1m involving non- cash impairments of about $363.8m in relation to CHEP recycled and HFG oil as well as gas venture. The underlying profit highlights that the direct cost of pallets and IPEP enhances owing to volume growth as well as higher values of pallet. The net financial cost declined largely owing to interest income from shareholder loan as well as deferred consideration. The tax expenditure as well as effectual tax on profit was slightly below in the year 2017 owing to mix of earnings. The loss in the discontinued operations involves US$243.8m non- cash impairment of CHEP recycled (Brambles Corporate Site. 2018).  

The cash capital expense enhances owing to timing of payments in relation to high capital commitments in the financial year 2016. On the accrual basis, the capital expense declined by about US$138m in the last year. Prior to this year the working capital movement highlighted effect of payment procedure. The dividend paid for business operations increased to about US$143m mainly due to effect of DRP being neutralized. Overall, the recent data reflects that the performance of the existing business operations of brambles improved in the year 2017 as compared to the year 2016.

 

Figure 1: Five year performance of Brambles continuing operations

Source: (Brambles Corporate Site. 2018)

The business layout of Brambles organizes the sustainability activities under three main programs that includes- better business, better communities and better planet.

Better business- Brambles limited gives reusable packaging that has been pooled through several users. It help customers understand its supply chains as well as reduce environmental footprint. Owing to environmental efficiencies of its pooling framework, CHEP has the ability to attain carbon neutrality for consumers. Brambles also works with suppliers and consumers for delivering sustainable solutions. It engages customers through various sector initiatives for hearing their voice through interviews, leadership meetings etc. It undertakes procedure that involves recognition of material risk such as environmental, social and economic risks relating to sustainability. It also uses survey for seeking feedback from workers, recognizing vital actions for improvement and tracking progress against responses from customers.

Business layout, location and flow of information

Better communities- Brambles positively contributes to the society where all people operates by supporting business environment, education, loss of food, waste initiatives and motivating individuals to participate in the local society initiatives. The businesses of brambles gives in- kind as well as financial support to the community groups across the globe by focusing more on educational and environmental areas. It identifies that by implementing logistics as well as supply chain professionals, it can be placed to aid reduce wastage of food throughout value chain (Brambles Corporate Site. 2018).

Better planet- Brambles has been committed to achieve ‘Zero Harm’ as well as takes into account social as well as environmental affects in buying and using materials. It has recognized key materials through its proactive engagement with its supplier as well as consumers for positively influencing and improving its supply chain. The company is also working with it suppliers and consumers for identifying opportunities in order to enhance efficiency as well as sustainability of all these material supply chains (Brambles.com. 2018).

 

Figure 2: Sustainability framework of Brambles

Source: (Brambles Corporate Site. 2018)

This company mainly depends on its information systems (IT) for operating its business. These system help to prevent from misuse or loss of unauthorized accessibility to data mainly due to unsuitable recognition, storage, processing or process of disposal that might lead to financial loss or disruption in business operations (Popper and Velasco 2017). Better network as well as sector- leading supply chain professionals underpin the sustainable operating framework of this enterprise (Schönsleben 2016). This helps the enterprise to have good flow of information within the business operations and manage its customers’ supply chain across the globe. With operations in more than 60 nations, this company’s network advantage mainly comprises scale as well as density of service centre network and customer relationship strength in each market it operates. However, utilizing its asset management professionals and network advantage, this organization connects participants of supply chain, thereby assuring efficient flow of products through supply chain (Mizgier, Wagner and Holyst 2012). By decreasing transport distances and total number of platforms needed for servicing supply chain, this enterprise delivers savings that every participants share.

Brambles integrate supply chain strategy for creating better supply chain and having positive impact on business operations (Hines 2012) This enterprise adopted few strategies for improving the performance of supply chain as well as aid address challenges that are associated with rising challenges connected with increasing complexity and modern supply chain evolution. It strategizes to reduce capital requirements as well as complexity of consumer’s operations and simultaneously decreases waste from its supply chains. 

Bramble conducts detailed analysis of the consumers supply chains for mapping the flow of products, platforms and information to recognize the reasons of the network inefficiencies as well as goods damage (Mizgier, Wagner and Holyst 2012). In order to determine optimal mix of procedure as well as platforms for supply chains, it can mitigate inefficiencies of network and assure safe as well as sustainable transportation of products through supply chain. This company’s network scale gives unique ability to collaborate among the participants supply chain for delivering transport efficiencies (Farahani et al. 2014). This involves matching as well as eliminating transport lanes, contracting transport and sharing transport for the customers. It strategy also involves reduction of transport distances and total number of platforms that is needed for supply chain business operations, it delivers saving in which every participants share. This entity works closely with the consumers for developing store- solution strategies and the issues facing them. This in turn improves efficiency of shared supply chain by enhancing sales at low costs to retailer, supplier and customer. Moreover, these merchandising as well as fulfillment solutions that involve full size as well as fractional display pallets, efficiently reduce time and labor needed to shift products from the area of manufacture to point of sale (Qrunfleh and Tarafdar 2014). This enterprise has also developed solutions which improve overall performance as well as efficiency of consumers facilities. These solutions involve- customizing processes for customers platform, optimizing customers configure, building as well as protecting goods load and giving high quality platforms for enhancing automated facilities performance. Thus, Brambles retains its ownership of instruments, repairing, inspecting it for maintaining proper quality levels and improving supply chains (Gunasekaran and Ngai 2012).  

 

Figure 3: Network scale of Brambles for collaboration

Source: (Brambles Corporate Site. 2018)

The different business quality aspects of Brambles involves- supply chain collaboration, innovation, better workplace, people’s engagement and enablement, peoples safety, peoples learning and development, people inclusion as well as diversity. Bramble works with its suppliers as well as customers for delivering mutually beneficial outcomes. It share and reuse business framework manly perpetuates virtuous cycle of using resources and creating effective supply chains by decreasing operating costs and natural resource demand. It aims to increase total number of participants for supply chain collaboration projects. In the year 2016, Brambles armored its commitment towards sustainability as well as innovation by establishing new venture. Brambles combines digital technologies with its physical platforms, so that its partners across supply chain experience more connected and effective supply chain (Chrobot-Mason and Aramovich 2013). The data driven solutions seamlessly integrate its operations, reusable platforms and business procedure, Brambles aim to give customers with real-time feedback and ability to analyze and monitor movement of products throughout supply chain. Brambles also focuses on creating better workplace, which in turn improves the quality of business operations (Chrobot-Mason and Aramovich 2013). It invests in workers safety and embeds diversity into work culture for enabling better teamwork and driving performance. Moreover, this underpins engagement of customers and facilitate fulfill its vision to be employers of choice. People – engagement as well as enablement is another vital business quality aspect of Bramble. It believes in engaging diverse and safe work environment brings out best in all people and aids them to reach their potential. It aims in achieving world best practice in employee’s engagement. In addition to this, people safety is another aspects of business quality of Brambles. It is committed to Zero Harm to its people and those working with customers as well as communities they serve. It Zero Harm charter signifies that this company seeks to apply occupational safety, health and environmental practice for the workers. Another business quality aspects of Brambles is learning and development of its people. Brambles focuses on providing learning and development opportunities to its people.  It is also committed to select, develop and support individual solely based on their professional capability. It retains as well as develop best individual for job based on merit and job relating competencies (Badurdeen et al. 2013). 

The recommendations are provided to the managers of this company in order to improve its business quality aspects. As it is the service organization, it must focus on providing customers with proper attention and satisfy their requirements in timely way. The managers of this enterprise should pay more attention on the work schedule of the employees and in few cases manage inventories. Effective management of employees work schedule can help the managers of this enterprise to improve its business operations. The managers of this organization should minimize inventory as too much can interfere with smooth flow of goods through the operations. In addition to this, the managers of Brambles should reduce unnecessary movement of material.  Even though some inventory is vital for allowing smooth operations, too much of these might create safety concerns mainly in such cases where equipment is needed to move in various places. Moreover, the leaders and managers of this enterprise should maintain flexibility for allowing for new conditions. Flexibility will help the managers to reconfigure design for accommodating new products or change in product mix in its operations . 

Inventory management is the most vital functions in a service organization. As per Gong and Janssen (2012) effective management of inventories enable the enterprise to react smoothly to the market demands as well as bring in cost decline via optimal holding of stock. There are several ways that might facilitate enterprise to improve as well as optimize its inventory management. These ways include- segmentation of product, integration of inventory management tools and data analytics and implementation of optimization software. Besides this, Brambles can enhance flexibility in its operations by deploying new software solutions as well as cloud-based applications. Also, by adopting flexible working hours and cash flow options, Bramble can improve this flexibility aspect. Furthermore, creating open environment can also enhance communication among the workers, which in turn aid to improve newly suggested aspects of managing operations.

Conclusion 

From the above discussion, it can be seen that Brambles had difficult year in the last year with respect to previous years. Despite stable performance in its businesses, operating challenges in its pallets business has weighed on Brambles financial performance. Over the past five years, the sales revenue attained by Brambles increased at yearly growth rate of around 7%. This growth highlights the expansion of world’s CHEP pallets as well as IFCO RPC businesses via ongoing conversion of consumers to the pooled solutions, expansion of its main commodities and new market entry. However, the profit of this company also increased as highlighted by sales revenue growth. Some of this enterprise profit improvement drivers include -supply chain program for decreasing operating cost mainly through optimization of plant network and decrease in the indirect cost worldwide. As the macroeconomic conditions impacts their supply chain operations where the customers operate, Bramble focuses on driving growth via investment in consumer value proposition and diversification in its opportunities. Apart from this, integration of effective strategies also helps Bramble to gain competitive advantage over its rivalries and expand its business globally. 

References

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