Over the past few years there had been a widespread development in United Kingdom`s private business sector. It is noted that with 1.3% growth and stability in internal and external factors of trade, organizations increasingly tend to concentrate on the aspect of supply chain administration and procurement activities (Christopher 2016). On the other hand, company managers in the modern world also significantly focus on developing and maintaining sustainability concerns towards its stakeholders as well.
This particular project takes into consideration one of the most successfully running private enterprises of the UK named John Lewis Partnership (JLP) and critically analyzes procurement and SCM in respect to the conduct of the firm (Knowledge 2017). Being founded in the early 1929, the partnership oriented retailing organization is recognized as the country`s third largest in the sector. According to Mangan and Lalwani (2016), it is noted that the employee owned association not only controls department store functions and Waitrose supermarket, but also operates financial and various expanded retail activities.
Lastly, this essay has been divided into separate individual segments that focus on the various parts of SCM and procurement chain. It is noted that the project will focus on strategic purchasing of JLP along with its sustainability concerns.
As per Monczka et al. (2015), procurement in an organization refers to all the activities that are performed by the employees with a motive to acquire various required materials. While on the contrary, purchasing only is a part of the enlarged process that tends to source materials to ensure stability of primary and support functions of a firm. Additionally, the hybrid structure of retailing firms also adds up value to its purchasing activities.
According to Johnson (2014), it is noted that being an integral aspect, purchasing strategies can be divided into six major parts, which are the following:
- Supplier Optimization: In order to make the most of the available resources and also to secure the most profitable materials at a cheap rate, managers in a company build up an optimum supplier mix.
- TQM: In addition to an increase of quality, the administration greatly focuses in minimizing errors by vendors.
- Risk Management:Supply chain risks along with affecting flow of goods also tend to impact decision making in a company.
- Global Sourcing:In addition to internal sourcing, companies often seek to obtain high quality materials from foreign nations in this era of globalization.
- Vendor Development: As per Fernie, Fernie and Moore (2015), it is noted that companies noticeably have lend a hand towards vendors to develop processes and thereby improve procurement activities.
- Green Purchasing: Sustainability concerns form a crucial field of focus by company managers leading to creating of an eco-friendly purchase cycle.
Supply Chain Management and Sustainability Framework
According to Christopher (2016), the aspect of SCM is regarded as the outline, arranging, execution, control, and regular examining of supply chain functions with the motive of enhancing esteem, assembling an aggressive framework, utilizing logistics, synchronizing supply with market demand and analyzing performances on a periodical basis. As stated by Weele and Raaij (2014), ranging from the originating point, SCM tends to control final delivery and consumption of resources in the process. Interconnected systems, channels and hub organizations join in the arrangement of items and administrations required by end clients in a supply chain flow.
Moreover, SCM greatly concentrates on inventory designing, system building, operations administration, logistics, goods obtainment, IT, promotion and further enhancing an integrated approach. As opined by Heizer and Barry (2013), the SCM framework is formed of interlinked components that form part of the entire supply chain system and the connection among them. In addition to the external environment, a coordination and collaboration among the various inter-corporate functions will noticeably help in developing SC flows and thereby producing positive outcomes in the long run.
On the other hand, sustainability concerns are differentiated into five major parts, which are human rights, raw materials, sustainable farming, responsible aquaculture and health. It is noted that along with global sourcing, the management of the firm tends towards sustainable farming with eco-friendly measures (Tidy, Wang and Hall 2016). Additionally, livestock feed and animal welfare are also of great importance to the firm as well. It is noted that the firm concentrates on using environmental friendly transport vehicles, natural resources, creating self branded products and also manufactures fish goods as well.
As stated by Salaman and Storey (2016), the aspect of procurement and SCM in JLP is recognized as a crucial function that decides performance and future of the organization in the country. It is noted that the management of the company has restructured its purchasing team with a focus on long-ranging strategy. With a proper and careful procurement of goods, there has been 50% increase of savings as well. Additionally, a coordinated B2B and B2C relationship has also helped the firm to enhance stakeholder satisfaction. Based on the urgent and important tasks, the management of JLP has guided its category and sourcing departments to equivalently concentrate on long-term strategic initiatives and acquirement of required products and services by the business respectively. As compared to other types of procurement, Bestford pays a greater amount of attention towards crowd sourcing (Knowledge 2017). Along with reducing costs, the method largely contributes in developing a better purchasing design for JLP. On the other hand, the rise of omni-channel requirements among the industry has impacted purchasing strategies of the organization. It is noted that technological integration, managing inventory requirements and the expansion of e-commerce has largely impacted supply chain of JLP (Ramanathan, Bentley and Pang 2014)
Concerning SCM, Virtual Stock`s system called The Edge has helped to build up a direct channel with the supplier. With a motive to enhance customer experience, the system tends towards an optimum utilization of its capabilities in supplying goods and services directly or from the warehouses to the end consumers (Knowledge 2017). Being renowned to implement technologies along with optimizing SC activities, The Edge helps to reduce cost and increase savings as well. Furthermore, extensive order tracking and controlled inventory administration also tends to integrate innovation and creativity in SCM as well. However, Virtual Stock and its system is expected to build value and develop JLP as UK`s leading omni-channel firm. On the other hand as per Brandenburg et al. (2014), the company in order to integrate purchasing and SC strategies, concentrate on using the hybrid structure not only for retail sales but also for online trade.
With more than 91,000 employees, SCM of the enterprise guides 41 John Lewis shops, 300 Waitrose stores spread across United Kingdom. On the contrary, sustainability functions of JLP`s SCM and procurement chain is another aspect of great importance. Sourcing over 380,000 goods spread across 90 nations and focusing on global SC`s, the administration of the firm objects to improve livelihoods, protect ecological surroundings and build a better future for the coming generation as well. As opined by Ramanathan, Bentley and Pang (2014), JLP also develops initiatives that concentrate on animal welfare, food chain fragility, SC stability, and efficient productive index. Additionally, creating self branded fish, timber, paper products and sourcing eco-friendly goods and services plays a major function in maintaining sustainability concerns of JLP`s SCM.
In the words of Roh, Hong and Min (2014), the management of John Lewis Partnership significantly focus on purchasing strategies and SCM frameworks to restructure and redesign operational functions of the organization. It is noted that the firm integrates a hybrid structure of purchasing to enhance stability among primary and support operations. Further, with a rise of the omni-channel retailing, the company tends to provide its customer with goods and services from anywhere of their choice. According to Hughes (2015), in terms of purchasing strategies, the managers source 380,000 goods from 90 nations of the world. In addition to producing self-made products, the firm also tend towards building up an optimum supply mix. On the other hand, supervisors also focus on a total quality process to reduce vendor errors along with maximizing good quality. Moreover, global purchasing includes a huge risk which needs to be reduced to ensure efficient purchasing as well. The active risk administration system greatly helps to cut down SCM and procurement threats. On the contrary, vendor development and sustainable purchasing initiatives by the management helps to build up global relationship with vendors and build up a better eco-friendly cycle (Knowledge 2017).
On the other hand, supply chain activities in the company abide by a well-defined SCM framework. However as per Gallear, Ghobadian and He (2015), despite of being elaborated and well-defined in nature, the company is faced with inefficiency of warehouse functions, shopper-friendly delivery, multi-channelling issues, seasonal fluctuations, capital paybacks and workforce reduction challenges. In order to ensure a productive SCM, the managers have tended to imply WMS, SRC and WCS software along with developing 37 pick-up points. In addition to B2C (8,704 storage sites) and B2C (46,080 storage sites), 8 dispatch aisles have also helped to deal with challenges (Knowledge 2017). It is noted that creation of interdependency among SC functions (marketing, sales, R&D, logistics, production, IT, finance, customer service) greatly contributes to enhance SC flows (products, services, information, financial resources, demand, forecasts) that ultimately help to enhance customer satisfaction, profitability and also build up competitive advantage factors (Tajbakhsh and Hassini 2015).
Based on the current position of the organization, it is recommended that the management of the firm extensively focus on employee ownership. Additionally, growth of policies and cultural norms are also suggested to help employee ownership grow. In addition to fund seeds, motivational rewards to employees and evangelists toolkits, building up relationship with entrepreneurs in the UK and various other developing nations of the world will help to establish JLP business in a more concrete manner.
Furthermore, a redesigning of the supply chain framework will also help to build up value in the organization. In addition to organizational strategy, policies, functions, participants, life-cycle operations and enablers, the model consists of a continuous improvement opportunity and performance measurements. It is noted that every section of the framework denotes an individual element, which ultimately will contribute towards developing competencies, competitive advantage factors of JLP. Moreover, a consideration of corporate plans and objectives will help to enhance sustainability concerns in purchasing and sourcing required goods and services as well.
Analyzing the various parts of the project it can be inferred that JLP possess has a well defined procurement and SCM framework with few scopes of modification. Concerning, purchasing strategies and supply chain model, the management of the firm tends to concentrate on various interlinked operational functions that directly or indirectly contribute towards business development. Further, it is noted that the administration of JLP also largely focuses on sustainability concerns for sourcing and producing materials not only from global sources but also from self-developed units of the company.
Being confronted with several challenges, the supervisors integrate systems and frameworks to enhance SC operations as well. In order to ensure increase of revenue generation and also serve all sections of the society, the enterprise seeks to develop a high performing SCM and purchasing chain as well. On the other hand, with a proper coordination and integration of recommended methodologies, JLP will not only be able to attain a well-defined SCM and procurement chain, but also develop profits and build up competitive factors as well.
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