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Background of the organization and the selected process

Describe about the Operations Management for Carton-Mix Optimization for Walmart.

Operations management refers to the plan, procedure and control of the renovation procedure that exchanges resources like manual labor and raw materials into goods and services that are traded to the target consumers. It can be stated that there are several other reasons that makes operations management significant enough, as it focuses both on services and manufacturing. However, for this specific task, focus would be shed on supply chain management of Big W, as this is one of the significant parts operations management. Ahire et al. (2015) have stated that operations management takes into account overseeing, designing as well as controlling the procedure of production and redesigning business operation in the overall production of goods and services. In order to carry on the entire task, supply chain management of Big W has been selected and this would be analyzed some specific perspectives like cost, quality, speed, dependability and flexibility (Arli et al. 2013).

From the company profile, it can be seen that Big W is the home to a wide variety of Australia’s preferred brands like Apple, Bonds, Peter Morrissey and Mambo. It can be seen that this company is highly committed towards giving Australians the lowest prices each day. Apart from that, it can be seen that Big W stocks a wide range of brands taking into account Smart Value, AWA, Dymples, Avella and some more of the fresh fashion trends. This brand is famous among the people in the industry, as they have rich online stocks of more than 20,000 product lines. The mobile app of Big W allows its valuable customers to be savvy with proper price comparison scanner and this proves transparency of their prices of the products. From the news, it has been seen that the company recently has faced severe issues as well as loss over the last few years. The company has lost their sales and this has indulged the existing rivals to take over that position (bigwvision.com.au 2016).

From news, it can be stated that Woolworths is expected to follow the lead of Wesfarmers and clear all the decks because its struggling Big W chain by booking restructuring charges as well as asset impairments. News have revealed the fact that to reduce cost, the management team of Big W has cut almost 100 jobs including 40 buyers and 30 e-Commerce staffs. They are expecting to cut the costs and restructure their supply chain through restoring profits. It has been seen that like Target, Big W as well is sitting on excess inventory after the unseasonal warm start to winter and many have to take more provisions in order to clear all the unwanted stocks after exhausting $145 million in provisions booked in February 2015. The main issue that the customers face in case of Big W is absence of products in the shelves and this disappoint the customers. Apart from that, it can be stated that the price of the products are comparatively high in Big W and this demotivates the customers to buy from this organization (bigwvision.com.au 2016).

Evaluating present performance of the process

Evaluating present performance of any organization benefits an organization from several perspectives and these have been mentioned here.

Strategic benefits

  • It helps in higher customer retention
  • Focuses on greater market share
  • It enhances the ability to execute strategies
  • It strengthens the ability to take entry into the new markets (Connelly et al. 2013)

Marketplace benefits

  • Lowe costs
  • Greater customer satisfaction
  • Differentiated offerings
  • Stronger relationship with the customers
  • Greater agility (De Meyer and Pich, 2002)

Operational benefits

  • It reduces direct costs
  • Focuses on better use of assets
  • Fasters cycle time
  • Focuses on increased accuracy
  • Focuses on more added values
  • Targets to simplify the entire process (Drake and Rhodes 2015)

Process map of Big W supply chain Management

Supply chain management is the procedure that leaves great impact on the overall operations of the organization and cost is one of the major factors in this part. The company is one of the biggest international brands and thus it has to keep close focus on cutting costs in supply chain management. Elder and Dauvergne (2015) have stated that supply chain network design can significantly deliver huge decrease in supply chain expenses and enhancement in service levels through improved lining up supply chain policies. It can be stated that Big W is required to increase their rate of profit without increasing sales and this would be possible only if they reduce their supply costs. Initially they are required to improve their space utilization, though it is tough to keep the suppliers and inventory in the same place. They are required to rely on local suppliers without compromising the quality and this might help the organization to reduce costs. Apart from that, they are required to use multiple suppliers. Presence of multiple suppliers will raise competition and would result in reduced supply cost. Apart from that, it is required for Big W to review demand pattern of the customers frequently and this might help the organization in specific areas to reduce price (Ellram et al.2013).

Fawcett et al. (2012) have stated that supply chain management directly leaves impact on the quality of the product and the overall profitability of any organization. Therefore, for this particular reason, quality control in the supply chain is highly critical for maintaining a proper competitive edge in the marketplace along with reducing operating costs. Lukic (2013) has stated that if the raw materials are blemished, this make the whole production line incompetent and at the same time amplify defect rates in the completed goods inventory. Apart from that, it can be stated that when supply chain quality control is poor, the goods are more likely to break out before their warranty period expires (Lee 2004).

It can be seen that organizations that experience large quantities of defects as well as some other forms of waste products during manufacturing, most of the times implement manual inspections to make sure about the quality of the products. In this part, it is required to state that hazardous materials are used throughout different parts of the world for several purposes in case of manufacturing and Big W can possess a remarkable market position by this. In order to ensure the quality of the product, Big W must not use any toxic materials and this unique feature would help the organization to gain a strong position in the present marketplace (Melnyk et al. 2014).

Process map of Big W supply chain Management

Nagurney and Li (2015) have stated in the research paper that effective supply chain management takes into account searching the appropriate balance between being able to maintain production levels and keep inventory stages in check. However, it can be stated that there are several other steps as well as factors to the supply chain management, but among them, speed and rapid response often can be highly significant. It can be stated that effective supply chain management begins with keeping enough supply of raw materials in hand to sustain constant production (Patil et al. 2013).

If the company fails to provide required materials to the students on time, it would definitely lose market share and thus Big W is required to look at this part sincerely. Apart from that, it can be stated that it is highly essential for the organization to keep the wholesalers happy; otherwise the business might lose them. Pope and Pope (2015) have opined that maintaining inventory levels is one of the major parts of supply chain management and thus Big W must look at this point sincerely. Closing deals speedily can help the supply chain flowing and this part is required to shed light on carefully from the company’s part. Therefore, it can be easily said that speed is a quality that is specifically significant in the retail distribution industry and Big W is required to look at this part sincerely to hold the leading position in the market (Qrunfleh and Tarafdar 2015).

Sehgal (2014) has stated that reliability is one of the major five strategic attributes in the supply chain management according to SCOR-model. It is also known as the key component to a successful supply chain management. It is highly important to make sure that supply gets transported on time and in adequate amounts. A dependable supply chain management will provide a lot of value in to an organization’s operations. Most of the firms try to optimize their supply chain system in order to generate cost savings. However, it is also important to seek consistency. Supply chain management has become more complex as a result of online ordering and global distribution (Simchi-Levi et al. 2007).

Customers expect fast order completion and that is why plants need admission to raw materials as fast as possible. That is why; it requires a large number of drivers, warehouse executives and shops. In order to develop a dependable supply chain management, Warehouse management system is the best possible option. It will let executives track and enumerate supply as it moves through the supply chain. It can be an effectual way to get better the network’s constancy. This software will provide precise assessments of supply levels which will allow the organizations to enhance a number of processes ranging from forecasting to production (Slack et al. 2015).

Cost

Zhao et al. (2014) have stated that to be elastic means to have the potentiality to vary as per the demand and requirements. Therefore, it can be stated that suppleness is the capability to carefully acclimatize in a reversible way, to an existing state of affairs that is irreversible. Companies must understand the real opposition is not firm to firm, but supply chain to supply chain. From the market research, it can be seen that mostly all companies rate elasticity as the top main concern, nearly as important as cost and daily performance. However, it can be stated that in supply chain management, flexibility is seen as a multi-dimensional construct, however, the number and content of these is more than controversial. Some of these are:

  • Machine suppleness
  • Material managing
  • Volume handling
  • procedure flexibility and some more (Slack et al. 2015)

It has been found that the major goals of flexibility are as follows:

Resource suppleness is the degree to which a resource can be functional to a variety of substitute uses along with the costs and complexities connected with the switching from one resource to another.

Co-ordination suppleness in those processes that redefine the product strategies, reconfigure chain of resources to produce the products. This re-deploys those resources required to produce the product.

Market flexibility is the capability to mass customize as well as build close and deep relationship with the customers taking into account designing and modifying existing and the new products (Slack et al. 2015).

Supply flexibility is the capability to reconfigure the supply chain by altering the supply of the products in line with the demand of the customers.

Organizational flexibility is the potentiality to align the labor skills to the requirements of the supply chain to meet the customer service along with demand requirements.

Therefore, it can be stated that flexibility are of these kinds and Big W is required to look at each of them separately to enhance the present position of the company in the market place.

In order to improve their supply chain management, Big W would have to implement some systems in their organization and in their supplier organizations. A recommendation is added below by which Big W will be able to improve their supply chain management.

Management of Big W can synchronize their product data such as dimensions of packaging, weight, and color with their supplies. It is expected that this move will help the organization to save more than $1 million annually.

Big W can also use Radio Frequency Identification (RFID) technology that will potentially save $8 billion per year. However, the suppliers are resisting this move of the organization which is a big problem.

Quality

Big W can train the employees in their supplier companies. The organization is planning to build a partnership with Accenture which will allow them to develop a six to twelve month program. This program will have a four-hour exam in the end known as the Supply Chain Academy (SCA).

The production of the organization is changing from mass production to smaller many specialized items production. Therefore, they will have to develop a complex but efficient transportation network.

Currently, the organization has an effectual information management system that is responsible for handling the huge data collection. That is why; the issue of technical problem rises repeatedly.

It can be stated that when someone hears the name of the company “Big W”, several things come to their mind from a pop culture stand point. As per the present report, Big W must do more to enhance supply chain transparency and hold its suppliers accountable. The alliance said that the retailer should do more to hold suppliers accountable to labor and environmental standards. From the research work, it has been seen that the company requires a third and independent body to monitor and verify supplier compliance with labor and environmental standards of Big W. Initially, Big W is required to look at the cost of their supply chain management, as high costs are affecting the expansion of the business in different parts of the globe. In spite of international supply chain, the company is required to rely on local supply chain without hampering the quality of the products. This might help the company to grab the attention of more local customers, as involvement of local suppliers would add extra value to the business operations. However, it can be stated that there are some other recommendations regarding labor and the environment in which it operates its supply chain management.

It has been seen that the management team of the organization has stated that they target to create economic opportunity for the associates as well as the suppliers and people, who work in retail sector and retail supply chain apart from Big W. It can be seen that CEO of Big W urged all the store managers to push sales of the brand new products. Most importantly, he has given proper guidelines how to do that. However, there are more to be done because of the fact that the new products are crucial to Big W, as this brings $288 billion in revenue (Ellram et al. 2013).

Speed

Conclusion

At the end, it can be concluded that Big W has a strong belief in its employees, customers and suppliers. That is why; they are one of the best retailers in the industry. The organization has utilized most of the cost saving opportunities. It has also implemented best strategies for their logistics and supply management. However, some issues are still there that the management will have to handle carefully.

References

Ahire, S.L., Malhotra, M.K. and Jensen, J.B., 2015. Carton-Mix Optimization for Walmart. com Distribution Centers. Interfaces, 45(4), pp.341-357.

Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business, and Accountancy| Ventura,16(1), pp.27-46.

Barney, J.B., 2012. Purchasing, supply chain management and sustained competitive advantage: The relevance of resourceâ€Âbased theory. Journal of Supply Chain Management, 48(2), pp.3-6.

bigwvision.com.au, (2016). Big W Vision - Shop Online - Home. [online] Bigwvision.com.au. Available at: https://www.bigwvision.com.au/ [Accessed 9 Aug. 2016].

Cao, X., 2013. Book review: Anita Chan (ed.), Walmart in China. Work, Employment & Society, 27(2), pp.369-371.

Chae, B., Olson, D. and Sheu, C., 2014. The impact of supply chain analytics on operational performance: A resource-based view. International Journal of Production Research, 52(16), pp.4695-4710.

Climent, C, Mula, J and Hernandez, JE (2009), ‘Improving the business process of a bank’, Business Process Management Journal, vol. 15, no. 2, pp. 201–224.

Connelly, B.L., Ketchen, D.J. and Hult, G.T.M., 2013. Global supply chain management: toward a theoretically driven research agenda. Global Strategy Journal, 3(3), pp.227-243.

De Meyer, A, Loch, CH and Pich, MT (2002), 'Managing project uncertainty: from variation to chaos', MIT Sloan Management Review, vol. 43, no. 2, pp. 60–67.

Drake, M.J. and Rhodes, D., 2015. Socially Responsible Supply Chain Management for a Competitive Advantage. In New Perspectives on Corporate Social Responsibility (pp. 321-340). Springer Fachmedien Wiesbaden.

Elder, S.D. and Dauvergne, P., 2015. Farming for Walmart: the politics of corporate control and responsibility in the global South. The Journal of Peasant Studies, 42(5), pp.1029-1046.

Ellram, L.M., Tate, W.L. and Feitzinger, E.G., 2013. Factorâ€ÂMarket Rivalry and Competition for Supply Chain Resources. Journal of Supply Chain Management, 49(1), pp.29-46.

Fawcett, S.E., Jones, S.L. and Fawcett, A.M., 2012. Supply chain trust: The catalyst for collaborative innovation. Business Horizons, 55(2), pp.163-178.

Jacxsens, L., Van Boxstael, S., Nanyunja, J., Jordaan, D., Luning, P. and Uyttendaele, M., 2015. Opinions on fresh produce food safety and quality standards by fresh produce supply chain experts from the global south and north. Journal of Food Protection®, 78(10), pp.1914-1924.

Lee, HL (2004), ‘The triple A supply chain’, Harvard Business Review, vol. 82, no. 10, pp. 102–112.

Low, C. (2015). Kmart boss reveals Big W hit list. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/retail/kmart-boss-reveals-big-w-hit-list-20151204-glfnc2.html [Accessed 9 Aug. 2016].

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Melnyk, S.A., Narasimhan, R. and DeCampos, H.A., 2014. Supply chain design: issues, challenges, frameworks and solutions. International Journal of Production Research, 52(7), pp.1887-1896.

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Nagurney, A. and Li, D., 2015. A supply chain network game theory model with product differentiation, outsourcing of production and distribution, and quality and price competition. Annals of Operations Research, 226(1), pp.479-503.

Patil, D.P., Shrotri, A.P. and Dandekar, A.R., 2013. Management of uncertainty in supply chain. International Journal of Emerging Technology and Advanced Engineering, 2(5), pp.303-308.

Pope, D.G. and Pope, J.C., 2015. When Walmart comes to town: Always low housing prices? Always?. Journal of Urban Economics, 87, pp.1-13.

Qrunfleh, S. and Tarafdar, M., 2015. Supply chain management practices–IT utilisation alignment: impact on supply chain performance and firm performance. International Journal of Business Information Systems 5,18(4), pp.364-389.

Sehgal, S., 2014. Supply chain management of Wal-Mart-An exploratory study. ZENITH International Journal of Multidisciplinary Research, 4(10), pp.219-229.

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