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INFS8202 Industry Research Project

tag 0 Download 0 Pages / 0 Words tag 21-06-2022

Answers:

1. Introduction and Problem Statement

1. Introduction

One among every three Australians prefers to dine out or have items from fast food outlets, food courts, clubs or even pubs (Ipsos.com.au 2017). This has increased the demand and considerable opportunity for entrepreneurs in setting up their business. Eventually, the importance and significance of supply chain has risen for the takeaway shops. In order to build competitive advantage, takeaway shops and fast-food chains are struggling in limiting their resource consumption, specifically in reducing the investment required for inventory and supply chain. This research will identify the ways by which the delivery charges can be minimized for an Indian takeaway shop in Melbourne.

2. Background of the Research

With the progress of time, takeaway shops in Australia have expanded a lot and reached to 29,000 in number in the year 2016 (Food and Food 2017). This has resulted in extreme competition among the food and beverage industry partners. Ultimately, companies are trying to reduce the cost of expenditure.  According to Sari (2015), cost associated with delivery charges in supply chain incurs almost 41.5% of total expenditure. Therefore, if the cost can be reduced or optimized then cost of production can be limited entailing more revenue for the organization. This research will identify the ways by which the cost associated with supply chain can be optimized for an Indian takeaway shop.

3. Industry and Company Background

1. Industry Background

The Australian food service is quite diversified, among which consumers spend the second most for takeaway items.The Food and Beverage industry in Australia has grown at a slow pace and at present it depends largely on imports due to limited local suppliers (Park and Kyung 2014). On the other hand, Soni and Patel (2015) pointed out that cost of supply chain has increased due to labor rate, energy prices, transport costs and change in commodity prices. These reasons have led to the rise in delivery charges for takeaway shops in Australia from the past 7 years. Even though with such financial challenges the industry has grown just 3.9% from 2012 to 2017 giving 153332 employments (Ibisworld.com.au 2017).

Figure 1: Takeaway Service Sub-Category Number

2. Company Background

This research will be done considering an Indian takeaway shop in the Melbourne city of Australia. At the shop, utilization of just the fresh locally sourced delivery is maintained, joined with suitable flavors specifically imported from other sub-continent, for offering standard and traditional recipes with present-day curve. It makes a vital eating background for customers. Moreover, it is consisted with three members of full -time staff and four casual staff, which includes one kitchen assistant working part-time. There are other eight members who deal with inventory management and one accountant, one manager and the operation overhead who control the management. Customers are able to download shop menus and stay in touch with us through booking next meal at shop.


Figure 2: Indian Bites Takeaway Shop

4. Significance of the Research

The research will help in identifying the ways by which the inventory and supply chain costs can be minimized for the concerned takeaway shop. Being an Indian takeaway shop it has to deal with huge delivery charges associated with imports and due to this the revenue optimization is affected (Bischak et al. 2014). Therefore, this research will help in reducing the challenges associated with financial constraints surrounding inventory investment so that the shop can create a competitive edge in Melbourne suburb.

5. Rationale of Study

What is the research issue?
 
The main issue in this research is the rising supply chain delivery charges that is impacting the revenue growth of the shop. Operating in the Melbourne suburb is extremely challenging as there are more than 5000 cafes and restaurants per capita, which is the highest in the world (Cannella et al. 2015). On the other hand, the takeaway shop serves Indian dishes and for that it needs to import 65% of its raw materials. Therefore, on one hand the bargaining power of suppliers is extreme and on other hand, the cost of import is huge, which has resulted in rising delivery charges for the takeaway shop.

Why is it an issue and why now?

The rising delivery charges is an issue for the Indian takeaway shop because it is impacting the revenue collection. The takeaway shop is more than 5 years old, however the revenue has increased to just 18.63% at the 5th year, where it was supposed to be at 50%. It has been understood that supply chain is quite fragmented and the huge inventory cost including wastages is impacting on business outcome.
Figure 3: 5 Years Statistics of Takeaway Shop
 
This is an issue at present because the takeaway shop has covered 5 years and still it has not able to clear its debt. The reserve funds in supply chain costs has already been consumed and the business in struggling hard in competing. Even though the demand is high still, the net profit is growing at snail’s pace.

How and when it is going to be investigated?

The issue that has been highlighted above is going to be analyzed in deep through this research. Existing literature in the supply chain delivery charges optimization will be analyzed. Primary data will be collected through questionnaire that will be provided to shop employees in order to understand the current supply chain loopholes. The collected data will be analyzed and suitable recommendations will be provided in support of the takeaway shop.

What could be the research shade light?

The research will successfully identify the techniques for calculated delivery expenses so that inventory investment can be reduced. The takeaway shop will be able to gain more revenue in future and net profit will get increased through supply chain optimization.

6. Research Problem

The Indian takeaway shop is struggling hard in maintaining its resources. The company has able to reach its break-even point at the third year but the net profit at each year is very less. The inventory and supply chain charges are imposing more cost to the company and therefore creating problem in organizational sustainability for the following years. Even though the organization is very small, it has able to limit its expenditure for human resources but due to poor supply chain management the organization has to invest more. This needs to be optimized in this research through suitable recommendations.

7. Research Purpose

Reducing Delivery charges to the Indian take away shop in Melbourne suburb is the main purpose of the research. Significant goal is to discover best techniques to lessen calculated delivery expenses in the business. The prime aim is to reduce the investment inventory in supply chain for building competitive advantage. Benefits for the organization can rocket upward in the event that if accomplishments of sufficient reserve funds is ensured in supply chain cost. 

8. Research Aim and Objectives

Research Aim

The aim of the research is to optimize the delivery charges associated with inventory and supply chain for the Indian takeaway shop in order to build competitive advantage.

Research Objectives

Following are the objectives:

• To identify the ways of investment in supply chain and inventory management
• To identify the reasons for high delivery charges in supply chain
• To propose some recommendations by which inventory investment can be reduced

9. Structure of the Research


Figure 4: Research Structure

2. Theoretical background – Literature review

1. Concept of Delivery Charge and Inventory Cost

Delivery expense includes the amount charged for freight fees in the business. Moreover, it involves the freight received by organization and freight sent by organization. According to Azzi et al. (2014), delivery cost includes the expenses incurred by an organization towards transporting its goods to the customers. It includes all the oil and gas costs, other transportation costs and payment to the third-party delivery companies. On the other hand, Guan, Li and Sethi (2016) opined that total delivery expense includes the amount of money it spends for an organization for manufacturing and delivering its cost. Moreover, it includes manufacturing cost, product sully cost and finished product logistic cost. In this way, delivery expense is highly dependent on inventory cost. According to Ishtiaq, Hassan and Khan (2016), inventory cost is expressed as the percentage of inventory value like capital, warehousing, depreciation, taxation, shrinkage cost, obsolescence and insurance. Reduced cost of stock out cost and cost of replenishment can automatically reduce the delivery expense. 

2. Reasons for High Delivery Charge and Inventory Cost

Delivery expense is highly dependent on some factors. According to Tat, Taleizadeh and Esmaeili (2015), cross channel suppliers lead to high level of inventory cost. Moreover, multi-channel suppliers for getting variety of raw materials actually increases the supply chain cost. On the other hand, Mishra (2013) opined that poor management of inventory increases the cost of inventory, which can major impact of enhancing delivery expense of an organization. Moreover, unrecognized storage area causes delay in delivery, which has major impact on enhancing the cost of delivery expense. As per Sarkar and Shewchuk (2016), poor monitoring of market and carriers can also increase the cost of delivery expense and inventory management cost. Wrong choice of between the suppliers and carriers can enhance unnecessary expenses for an organization. Apart from that, shrinkage and damage of goods during transportation can also increase the cost of delivery expense of an organization. 

3. Ways of reducing inventory cost and Delivery Cost

Towards getting the best price in goods delivery, most of takeaway shops in Melbourne have started to negotiate with multiple carriers and suppliers. Shah, Soni and Patel (2013) stated that comparing multiple carriers ultimately suggests the lowest price for effectively delivering the goods to the customers. On the other hand, Dye (2013) opined that foreign takeaway shops are more likely to get their goods supplied by the suppliers of their own country. It ultimately increases their cost of inventory and supply chain cost. Hence, some of takeaway shops have started to use local suppliers and carriers for getting supply and deliver their goods. It has been found that Daawat Indian Restaurant in Melbourne always uses regional carrier within Melbourne. In this way, they have become able to reduce their delivery expense and enhance their level of profitability. 
According to Priyan, Palanivel and Uthayakumar (2015), insurance from the third-party carrier can actually reduce the cost of delivery and inventory cost. The cost of delivery related to shrinkage and damage is high minimized through the insurance from the third party. Furthermore, Sainathuni et al. (2014) opined that depending on the association with the suppliers and carriers, takeaway shops can get bulk discount for their supply and delivery charges. It has been found that Vindaloo Dreams has made long lasting relationship with the regional carriers and suppliers. In this way, they get huge discounts on their goods supply and delivery.  

4. Relationship between Inventory Management and Competitive Advantage

According to Shockley and Fetter (2015), reduced inventory lead time actually reduced the cost of total inventory management. Moreover, the reduced inventory lead time leads to shorter production cycle time. In this way, it actually material cost and improved quality of the products. Hence, organization can become able to deliver quality products at right time with reduced cost. It can enhance the potentiality of competitive advantage for organizations. On the other hand, Tiemessen and van Houtum (2013) opined that stock control practice reduces the cost of inventory management and leads to continuous production of goods and services. In this way, proper inventory management and reduced inventory cost can improve the sales volume and with lowest operational cost. Hence, it can foster competitive advantage in takeaway shops. 

Figure 5: Inventory Management

5. Calculated Delivery Expenses

Below are the ways by which an organization can reduce its calculated delivery expenses.

Consolidated shipments

Goods are transferred according to the space specification determined by the buyer and is done through full container loads.

Cargo insurance

Third party insurance is required for the cargo shipment so that it covers the value of goods that are transferred.

Integrated platform

Integrated supply chain helps in sharing supplies to the buyers under the same platform and thereby reducing cost of delivery.

Outsourcing

Excessive cost, risk of transportation and multiple orders are taken care through outsourced firm, which looks after supplies.

Resource optimization

Includes assets, vehicles and inventory facilities both with status leased or owned has to be audited regarding its net value.

Table 1: Ways to Reduce Calculated Delivery Expenses

According to Modi and Thakkar (2014), an organization needs to spilt the variable and fixed cost associated in a supply chain so that best information is carried on in future. Most of the organizations follow the traditional approach of supply chain planning but for a takeaway shop the scenario is quite different. On the other hand, Otten, Krenzler and Daduna (2016) pointed out that total delivery cost is comprised of supplying, manufacturing, packaging, warehousing and distributing. Therefore, an organization needs to follow the calculation of variable operating cost so that based on this fund reserve can be done.

(total cost to operate at maximum volume - total cost to operate at minimum volume) / (maximum volume - minimum volume)

Figure 6: Optimization Planning for Supply Chain

6. Research Questions

After discussing all the research literature and identifying the research objectives, the main problem that needs to be discussed in the analysis section is how to reduce the delivery charges to the takeaway shop.

Following are the research questions:

  • What the ways of investment in supply chain and inventory management?
  • What are the reasons for high delivery charges?
  • What can be the best possible ways by which inventory investment can be reduced?

3. Research Methodology

1. Research Approach

Research approach facilitates in gathering most accurate information regarding about research area. The choice of research methodology is highly dependent on variables of research and research topic (Dumay and Cai 2015). There are two types of approaches in the research study. Inductive approach is an inductive inference, which is used to generate untested conclusion. It generalizes information from specific to general. This approach allows in creating new theories and models for collective relevant research information. On the other hand, deductive approach evaluates research propositions related to existing theories and models. It actually reduces the time and budget constraints of research study through application of existing theories and models (Choy 2014). Therefore, deductive approach has been selected for completing this research study.

2. Research Purpose

It is highly important to understand the topic of the research effectively towards properly conducting the research study. Research purpose facilitates in gathering huge knowledge regarding various research variables. Most commonly applied research purposes in research study are exploratory, explanatory and descriptive purpose. Explanatory purpose facilitates in recognizing relationship between different research variables of research study. It builds links among different research variables (Vamsi Krishna Jasti and Kodali 2014). Exploratory purpose assists in identifying the social causes behind the research study. In this way, it can identify the background and the current issues associated with the research study (Lee and Jarvik 2014). Furthermore, descriptive purpose assists in getting actual purpose of the research study through proper explanation of the research topic. Therefore, descriptive purpose has been chosen for gathering actual purpose of the research topic for its proper completion.

3. Research Strategy

Research strategies are extremely helpful in collecting most authentic information about research topic. Most common research strategies are namely case study, focus group, interview and survey (Azhdarzadeh et al. 2015). Case study and focus group are mostly used on secondary data collection method. Survey and interview are mostly used in primary data collection method. Survey strategy has been used in collecting accurate information about the research topic (Farooq and O'Brien 2015).  In survey method survey questionnaires have been formed and those were distributed among the selected respondents for collecting information from them.

4. Data Collection

Data collection is the most important process in collecting appropriate and authentic information about research area. Two types of data collection method can be used for carrying out research study such as primary method and secondary method. Secondary method has been used for collecting relevant research information from the secondary sources like authentic journals, books and website (Lather and St. Pierre 2013). This research study is basically based on primary method for collecting first hand authentic data about the research topic. In primary method, quantitative technique has been used for collecting most relevant research information. In this technique, survey questionnaires are formed for the employees of the Indian Takeaway in Melbourne. These employees were asked to answer the questionnaires from their perspectives.

5. Sample Selection

In order to conduct the research study, 15 employees of the Indian Takeaway shop in Melbourne have been selected for conducting survey method. The data collected from these 15 employees will help in reaching accurate research result. These employees comprise of both full time and part time and they are associated with different roles. However, since the shop is small so all the employees were suitable for the sample size.

6. Data Analysis

Data analysis assists to convert the common information collected from the respondents into precise information (Fletcher 2017). Statistical method of data analysis has been selected in this research study for evaluating the quantitative data. In this method, mean, median and mode method have been selected for evaluating the collected data.

7. Ethical Consideration

Effective completion of research study is highly dependent on its degree of ethical consideration (Gummesson 2014). It should be ensured that respondents are not forced to take part in the process of data collection. Likewise, in this research study, the respondents were permitted to take voluntary involvement in the data collection process. It was also assured that the information collected from the respondents was only for personal purpose and not for any commercial purpose. Moreover, all the data protection acts were maintained for ensuring data protection of the information from the respondents.

4. Findings

1. Process of Findings

In findings, questionnaire was shared among the respondents of the takeaway shop. There were questions and respondents were asked to provide their responses. After gathering the response data, statistical method was used to analyze the outcome. With the help of suitable table, charts and graphs the data was analyzed and outcome was tallied by comparing with theoretical background. Also, it must be mentioned that the questionnaire was designed in accordance to research aim, objectives and questions.

2. Quantitative Questionnaire

1. Tenure Identification

How long are you associated with the organization?

Options

No of response       

Percentage of Response

Total Respondents

1 year

2

13.33

15

2 years

1

6.7

15

3 years

2

13.33

15

4 years

3

20

15

5 years

7

46.67

15

Table 2: Tenure Identification

Figure 7: Tenure Identification

While considering the above data, it can be said that the takeaway shop has able to satisfy its human resource and therefore only two new employees have been recruited in the last year. This indicates good productivity and quality outcome. Also, this indicates that the salary provided by the shop is justifying the operation. This acts as the benefit for the organization in terms of resource consumption as no training needs are required.

2. Supply Sources

What are sources for raw material supplies?

Options

No of response       

Percentage of Response

Total Respondents

Import

11

73.33

15

Local Vendors

4

26.67

15

Table 3: Supply Sources

Figure 8: Supply Sources

Considering the supply chain of the takeaway shop, it must be noted that it is an Indian themed business that operates in Melbourne. Eventually, most of the supplies are to be imported from overseas. The findings indicate that the shop is importing 73% materials from overseas, especially from India and the subcontinent. This might be one of the reasons for overcharged delivery. On the other hand, it must be noted that 4 employees responded for local suppliers. However, these supplies are basically for machinery, materials, kitchen equipment and local food items. Locally sourced deliveries constitute mainly the side dishes but the supplies for main traditional dishes are from subcontinent. Therefore, it can be said that even though there is a mixture of local and imported supplies, still for a small size shop it might be quite difficult to handle financial considerations.

3. Multisource Impact

How far do you agree that multisource imports are impacting managing funds for supplies?

Options

No of response       

Percentage of Response

Total Respondents

Strongly Agree

2

13.33

15

Agree

10

66.67

15

Neutral

2

13.33

15

Disagree

1

6.67

15

Strongly Disagree

0

0

15

Mean

Median

Mode

SD

2.133333333

2

2

0.743223353

Table 4: Multisource Impact

The mean value indicates 66.67% employees agreeing with the fact that imports from multiple sources are impacting on the fund management. However, this value is conflicting with other options, even though the responses are quite less. The magnitude of difference is huge and even it must be noted that the mode value is 2, indicating highest response. Also, median value indicates there is 66.67% scope of improvement in fund management. While comparing with the literature, it must be said that having supplies from multiple sources create hurdles in inventory management. Also, there is extra stack of inventory that gets piled up and leads to wastage ultimately.

For the takeaway shop,such reasons add up to fund consumption. The shop needs to centralize its supplies from selective broad suppliers so that cost of import is reduced and items are sourced from one particular supplier. This will help in optimizing the logistics and supply chain operation, reduce transactional cost, maintain good relationship and have supplies in bulk.

 

Figure 9: Multisource Impact

4. Calculated Delivery Expenses

How far do you agree that calculated delivery expenses for the business in accurate?

Options

No of response       

Percentage of Response

Total Respondents

Strongly Agree

0

0

15

Agree

2

13.33

15

Neutral

0

0

15

Disagree

8

53.33

15

Strongly Disagree

5

33.33

15

Mean

Median

Mode

SD

4.066666667

4

4

0.961150105

Table 5: Calculated Delivery Expenses

From the above table, it can be understood that there is no contradiction in the responses. The mean value or the average is coinciding with the maximum responses and this shows the clear concern that the calculated delivery expenses in the business is not accurate. As discussed in the literature review section, the company might not be following any of the options such as outsourcing, integrated supply or resource optimization. However, based on the median value, it can be said that the shop has the ability or scope to achieve 53% positive outcome through calculated delivery expenses in the future.

 

Figure 10: Calculated Delivery Expenses

5. Fund Reserve

How far do you agree that fund reserve for supply chain will help in smooth business flow?

Options

No of response       

Percentage of Response

Total Respondents

Strongly Agree

3

20

15

Agree

9

60

15

Neutral

2

13.33

15

Disagree

1

6.67

15

Strongly Disagree

0

0

15

Mean

Median

Mode

SD

2.066666667

2

2

0.798808637

Table 6: Fund Reserve

From the above table, it can be identified that mean value is 2, which indicates 60% of the respondents are contradicting with the rest regarding fund reserve. 9 respondents believe that fund needs to be kept reserved specifically for supply chain so that smooth operation is continued. On the other hand, based on the median value it must also be said that there is a 60% scope of fund reserving as majority of the respondents are indicating its necessity. Even though the standard deviation value is less than 1, which indicates less risk but as majority of the respondents believe there is less fund to support the supply chain management for the shop in future. Therefore, from the findings, it can be analyzed that the shop needs to reserve supply chain funds as there is scarcity at the current situation.

 

Figure 11: Fund Reserve

6. Supply Chain Method

Among below, which option is mostly followed in supply chain?

Options

No of response        

Percentage of Response

Total Respondents

Vendor Management

7

46.67

15

Automated Credit Recovery

0

0

15

Recipe Management

3

20

15

Centralized Order Guides

0

0

15

Inventory Management

5

33.33

15

Mean

Median

Mode

SD

2.733333333

3

1

1.830950833

Table 7: Supply Chain Method

From the table, it can be identified that mean value is 2.7, indicating recipe management response, which is contradicting with rest of the options. This indicates that 20% of the respondents are contradicting with 46.67% respondents. Therefore, it can be identified that even though the mode value giving highest response percentage, however the average response is indicating that managing recipe is mostly focused in supply chain management. Also, the median value indicates scope for improvement and therefore there is 20% scope of improving the average response through recipe management. This indicates that the organization does not focus in automated credit recovery and centralized order guides. Both of these factors are completely ignored raising the supply investment for supply chain.

7. Inventory Management Planning

What kind of planning is ensured for inventory management?

Options

No of response       

Percentage of Response

Total Respondents

Sales Forecasts

3

20

15

Menu Engineering

2

13.33

15

Material Management

3

20

15

Suggested Order

6

40

15

Commissary Management

1

6.67

15

Mean

Median

Mode

SD

3

3

4

1.309307341

Table 8: Inventory Management Planning

From the above table, it can be identified that mean value is 3, which indicates average response is for material management planning. On the other hand, this value is contradicting with the maximum value as indicated by mode, which is suggested order. Most of the respondents are of the view that the takeaway shop manages its inventory through suggested order but on the other hand, 20% respondents indicates that inventory replenishment is done by planning material supplies. However, there is a scope of raising the average percentage value by 20% to suggested order. This is because the company needs to understand what kind of orders are placed mostly by the consumers and based on that the inventory of such raw materials is to be replenished. This will reduce the cost of redundancy and minimize the wastage.

Figure 13: Inventory Management Planning

8. Supply Chain Investment

According to you, which option is followed for reducing supply chain investment?

Options

No of response       

Percentage of Response

Total Respondents

Supplier Diversification

10

66.67

15

Volume Discounts

4

26.67

15

Electronic Sourcing

0

0

15

Expert Advice

1

6.67

15

Outsourcing Supplies

0

0

15

Mean

Median

Mode

SD

1.466666667

1

1

0.833809388

Table 9: Supply Chain Investment

From the above table, it can be identified that the mean value is 1, which indicates 66.67% response. On the other hand, the average value is coinciding with maximum response, which is supplier diversification. Therefore, there is no contradiction and all the employees are perfectly clear that reducing supplier diversification is only option that helps in managing supply chain investment. However, earlier it has been found that multisource investment is seriously affecting the fund management of the company. Based on the median value, it is clear that there is a scope of 66.67% to reduce the supply chain investment cost by reducing the multisource supplies.

Figure 14: Supply Chain Investment

9. Logistics Investment

According to you, which option is consuming the maximum cost in logistics?

Options

No of response       

Percentage of Response

Total Respondents

Transportation

6

40

15

Fuel

2

13.33

15

Dollar Value

1

6.67

15

Damage

3

20

15

Distance Factor

3

20

15

Mean

Median

Mode

SD

2.666666667

2

1

1.67616342

Table 10: Logistics Investment

From the above table, it can be said that mean value is indicating the third position, which is dollar value and it is contradicting with highest response factor transportation. On the other hand, median value is indicating that there is 13.33% scope of reducing logistics cost through fuel optimization. Since this shop imports raw materials every day for traditional Indian recipes, therefore the logistics cost is extremely raiseddue to transportation expenditure. Mode value indicates the maximum response as transportation, which needs to be optimized in future along with fuel optimization.

Figure 15: Logistics Investment

10. Reason for High Inventory Cost

According to you what is the reason for high inventory cost?

Options

No of response   

Percentage of Response

Total Respondents

Unorganized storage areas

5

33.33

15

Poor record on waste

2

13.33

15

Poor cash register audit

3

20

15

Poor monitoring of market

4

26.67

15

Poor checking proportioning standards

1

6.67

15

Mean

Median

Mode

SD

2.6

3

1

1.4040757

Table 11: Reason for High Inventory Cost

From the above table, it can be understood that response from poor cash register audit is contradicting with unorganized storage areas. Both of these factors are extremely important for inventory cost management as described in the literature review. However, there is a scope of improving the cash register audit by 20% in future if the accountant becomes more concern in the areas of cash inflow and outflow. Also, the most vital point as indicated by the mode value is that the storage areas in the inventory is extremely poor. Therefore, this might be one of the reasons for inventory oversupply and more wastage. The storage area might be small and therefore materials are poorly segregated and sorted. There is more kitchen wastage and earlier supplies are getting piled up unused. Standard deviation value is more than 1, which indicates huge risk for the company regarding financial management.

 

Figure 16: Reason for High Inventory Cost

11. Competitive Edge

How far do you agree that competitive edge for the shop is getting affected by high delivery charges?

Options

No of response       

Percentage of Response

Total Respondents

Strongly Agree

9

60

15

Agree

3

20

15

Neutral

2

13.33

15

Disagree

1

6.67

15

Strongly Disagree

0

0

15

Mean

Median

Mode

SD

1.466667

1

1

0.743223

Table 12: Competitive Edge

From the above table, it can be identified that both mean and mode is indicating the same position. This indicates that maximum response is getting coincided with average response. In such a case, it is clear that maximum of the respondents agrees that due to high delivery charges, the shop is not able to establish competitive advantage. In order to create competitive advantage, the shop needs to be financially strong and for that revenue needs to accelerate. However, as discussed in the introduction part, this organization is achieving very limited revenue hike at each year. On the other hand, it must be highlighted that there is 60% scope of achieving competitive advantage in future if the delivery charges are reduced through supply chain optimization.

 

Figure 17: Competitive Edge

12. Delivery Charges

According to you what do you think is responsible for high delivery charges in supply chain?

Options

No of response  

Percentage of Response

Total Respondents

Inventory

6

40

15

Preparing high convenience foods

1

6.67

15

Cross channel suppliers

1

6.67

15

Logistics cost

5

33.33

15

Distance Factor

2

13.33

15

Mean

Median

Mode

SD

2.733333333

3

1

1.624221425

Table 13: Delivery Charges

From the above table, it can be identified that 6.67% response is contradicting with 40% response. There is a tight contradiction between cross channel suppliers and inventory. Rise in delivery charges increases with the increase in poor inventory management. Also, more number of suppliers for similar raw materials and supplies in increasing the cost of cross channel suppliers. These reasons are ultimately increasing the delivery charges of supply chain and impacting on revenue. Since the revenue is poor for the consecutive years, competitive edge is not gained and finally this organization is struggling hard to survive.

 

Figure 18: Delivery Charges

Conclusion and Recommendation

Conclusion

 While concluding the study, it can be said that the Indian Takeaway Shop in Melbourne is using multisource suppliers for getting supply of both local raw materials and importing foreign food materials. However, the multisource suppliers and carrier selection is actually increasing the delivery charge of the shop. The shop is not also highly focused on vendor management for reducing its inventory cost. However, most of the employees of the shop are with the view that reducing supplier diversification is the only option for reducing the ultimate inventory cost. On the other hand, from the data analysis, it has also been found that transportation also contributes largely in maximizing the delivery cost. Wrong selection of carriers sometimes enhances the delivery charges of the shop. Furthermore, the takeaway shop also has lack of proper recognized storage area for storing the raw materials adequately. It often leads to wastage of materials and enhances the ultimate cost of delivery in the shop. Maximum employees of this shop believe in cross channel suppliers for enhancing the inventory and delivery cost. However, they believe that the shop should immediately look into the matter of reducing inventory cost and delivery charges for gaining competitive advantage over the rivals.

Linking with Objectives

Objective 1: To identify the ways of investment in supply chain and inventory management

This objective can be effectively linked with questionnaires 3, 4, 7, 9 and 10. From question 3, it can be known that the shop uses multisource supplier chain in their business. It is actually increasing the cost of supply chain and inventory management. From questionnaire 4, it has been found that calculated delivery cost of the shop is not accurate for reducing the inventory cost. Questionnaire 7 demonstrates that the shop follows only suggested order for their inventory management. In some situation, such planning enhances the cost of inventory management. Furthermore, questionnaire 9 highlights that cost of increasing logistic, which can have major influence on the ways of investment in supply chain and inventory management. From 1ustionnaire 10, it has been found that unrecognized storage area is actually enhancing the inventory investment of the shop. In this way, these questionnaires are perfectly aligned with the objective for gathering accurate information about the topic of the research.

Objective 2: To identify the reasons for high delivery charges in supply chain

This objective can be accurately linked with question questionnaire 2, 3, 10 and 12. From questionnaire 2, it has been found that the Indian takeaway in Melbourne mostly uses importing for sourcing raw materials for food processing. Moreover, they also used multisource suppliers for souring raw materials. In this way, the importing process and multisource of raw material enhance the delivery charges in raw materials. Apart from that, questionnaire 10 indicates that unrecognized storage areas are also enhancing the inventory cost of the shop. It has direct impact on the high delivery cost of the shop. On the other hand, from questionnaire 12, it can be known that inventory preparing for high delivery cost is actually increasing the delivery expense of the shop.            

Objective 3: To propose some recommendations by which inventory investment can be reduced

This objective can be effectively linked with questionnaire 5, 8 and 11. From questionnaire 5, it has been found that maximum employees of the shop are willing to reserve money for supply chain towards smooth business operation. From questionnaire 8, it has been assured that maximum employees want to reduce supplier diversification for reducing ultimately delivery cost for the shop. Single source supplier can actually reduce the investment cost in inventory and reduce the ultimate cost of delivery in this shop. Therefore, the shop should immediately shift into single source suppliers. From questionnaire 11, it has been found that high delivery charges are actually reducing the competitive advantage of the shop. Therefore, the shop must look into the matter of reducing high delivery cost for gaining competitive advantage.

Recommendation

Single Source Supplier

From the research paper, it has been found that the Indian Takeaway in Melbourne is using multisource suppliers and carriers for sourcing and delivering goods. It is actually requiring paying multiple suppliers and carries, which is ultimately increasing the inventory cost and delivery expense of the organization. Multisource suppliers are effective for large sized organization, which has the affordability to pay multisource suppliers. However, this shop is not so large in size. This organization is not able to afford such enhancing cost of multisource suppliers. Therefore, the shop should use single source suppliers and carriers for reducing the cost of inventory and delivery cost.

Outsourcing

 The shop can outsource their total supply chain department to a reputed organization. The outsourced organization will take all the responsibilities of supply chain management and develop cost effective plan towards minimizing overall inventory and delivery expense of the main shop. However, the shop should select expert and knowledgeable outsourced company, which will be able to source less expensive materials, transportation optimization and better inventory management. Through outsourcing process, the shop can also better manage their core business areas. Therefore, the shop will be able to minimize their overall supply chain cost and ultimate delivery cost for creating competitive advantage.

Greater Association with Suppliers

The shop can also reduce the inventory cost of the organization through availing large discounts from the suppliers and carriers. However, the shop will be able to get large discounts from the suppliers, when there will be high level of association with the suppliers. Long lasting and collaborative association with the suppliers will help the shop to get huge volume of discounts from the suppliers. In this way, greater a

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