Supply Chain Planning And Control Issues: A Case Study Of NTUC Fairprice Company

Discuss about the Supply Chain Planning and Control Issues.

The supply chain is the network by the help of which the whole organization is able to perform altogether to coordinate the entire process of business activities for delivering the organizational products within the market. The Supply chain planning considers all types of activities related to the logistics such as maintenance, distribution, procurement and inventory management. It also includes some other organizational activities such as marketing, development of new product, financial management, and customer service management. The main objective of any supply chain planning of any company is to reduce the rate of inventory. Nowadays, SCM is the most important backbone of the business organizations. The SCM includes all those activities which are required to launch any product into the market. An effective SCM is always able to make a large group of satisfied customers. The process of SCM generally includes all those organizational activities which take place in manufacturing operations, purchasing process of the customers and distribution and transportation of their products within the market. By the help of SCM, the business owners are able to link their Stakeholders and business partners into a single thread or chain. In this research study, the researchers identify the supply chain planning issues of NTUC Fairprice Company and analyze the outcomes of the business.

NTUC Fairprice Co-operative Ltd Company was founded by the labor movement in the year of 1973. The founder of this company has a social mission behind the establishing of this company. At the beginning, the firm was a supermarket only, but recently it has acquired the position of the largest retail service provider throughout Singapore. The NTUC Fairprice Co-operative Ltd Company supplies their products to nearly 430,000 shoppers every day, through a network of more than 141 outlets including FairPrice Finest, FairPrice Xtra, and FairPrice Supermarket. Recently the NTUC Fairprice Co-operative Ltd Company owns a distribution center of Fresh food and also a centralized distribution and warehouse company.

As per (Bozarth and Handfield, 2015), Introduction to Operations and Supply chain planning is a comprehensive and integrated topic of the introduction of both supply chain planning and operations. In the Fourth Edition of this book, the author describes the techniques and the analytical tools which are applied in the Supply chain planning and Operations.

This research study has fixed their focus on the impact of Supply chain planning and the control issues in the NTUC Fairprice Co-operative Ltd Company. The NTUC Fairprice Co-operative Ltd Company deals with food retail business within the sector of the supermarket. The NTUC Fairprice Company has not used only standards to enhance the cost efficiency and operations of their business. By the help of SCM, the NTUC Fairprice Company is able to increase the standards of the retail industry in Singapore by facilitating the local retail companies and the suppliers to use that standard (Yinan et al., 2014). The business process in the supermarket sectors is a diverse business that supplies lots of food which consumed by the people through all over the world. The value chain of any service and products depend on the supplied raw materials and the food products which are delivered to the international buyers to the international buyers. An effective supply chain process always helps the company to pull the complex process within the industry to enhance the quality, efficiency, and safety of the business process. In the recent days, there is a significant growth in Singapore regarding the consumption of grocery items or products.

Analysis

The value chain of the NTUC Fairprice Company is similar to the other large supermarket companies. The reports are provided by over viewing the three most important business functions such as retail in NTUC Fairprice, distribution and procurement (Tayur et al., 2012). All of these functions are included in the distribution and processing of the products by following the standards.

To identify the supply chain process and the control issues of NTUC Fairprice Company, it needs to identify the entire process flow among the three most important business functions. The most important three business functions are –Procurement

It refers the management of the relationship between the suppliers and the sourcing.Distribution or warehousing

Distribution or warehousing consists of the outbound logistics and the inbound logistics. The outbound logistics describe the process of delivering the products to the retail stores and the inbound logistics describe the process of delivering the products to the distribution centers.Retail service

Through retail service, the NTUC Fairprice Company is able to serve and meet the daily demands of their consumers.

The partnership or relationship between the NTUC Fairprice and their suppliers basically depends on the trust of the standards which are used to enhance the safety and quality of their products and service. The suppliers of the firm acts in accordance with Hazard and Critical Control Point (HACCP), as they are the food suppliers (Stadtler, 2015). For the supply of household products to the company, the suppliers should have followed the HACCP certified process. It is also essential for the company to deliver their products efficiently for keeping the costs down.

In recent days, the NTUC Fairprice Company has increased their number of retail stores in Singapore. They also reduce the working capital of each store and the staff numbers within the procurement department are maintained by the company at the same level. The systematic training programs help the organization to expand their knowledge about the operating process and also help the company to enhance and maintain the variety and quality of their products and services. They also make sure that the suppliers should deliver their products in a good condition (Slack et al., 2013). The NTUC Fairprice Company also follows temperature controlled supply chain at the time of delivering dairy products and raw meat because they should never compromise with the safety and health factors of their consumers.  By the help of an effective supply chain process, the NTUC Fairprice Company can easily expand the source of dairy products and raw meat.

The NTUC Fairprice Company is continuously tried to improve their business process. They introduce an innovative sortation system within their business process and also implement a good warehouse management in their main distribution center by the help of which the company is able to integrate the information and the product flow smoothly within the warehouse (Schönsleben, 2016). By the help of a proper supply chain planning the company is able to exchange their reliable data which also enhance the effectiveness of the communication along with the different departments and also able to reduce the time which is taken to fulfill the orders of the retail stores. Due to this reduction of time, the company is able to increase their operational accuracy. For these reasons, the operational costs of the organization also get reduced. 

It becomes very important to understand the issues coming between the supply chain planning  activities as it will help in increasing the effectiveness of the concerned organization. NTUC is considered to be the supermarket chain throughout the different parts of Singapore and the firm has more than 100 supermarkets throughout the entire Island.  Some of the crucial issues are related to the order fulfillment, reduction in the cases of damage handling, return cases and the quality of the products offered to the respective customers throughout the concerned market segments (Rushton et al., 2014).  The supply chain planning  includes various other operations such as the manufacturing operations, transpiration, purchasing and the physical distribution of the products and therefore it becomes more important for NTUC Fair price to understand the issues in the supply chain planning  system and to rectify it. One of the major issues is seen between the cost price of the supply chain activities and this critically affects the execution of the business processes of NTUC.  There exists crucial requirement of the cost reduction techniques as to bring out the desired positive results for the firm (Ross, 2015).  Throughout the Singapore market areas, it has been seen that the consumption of the grocery products is increasing rapidly and 20% of the total household's expenditure accounts for foods as well as the grocery products. NTUC is one of the three topmost retailers in the field of supermarkets throughout the competitive market segments of Singapore. Moreover, there are some of the critical issues related to the transportation and the distribution network of the NTUC and these needs to be improved in order to increase the efficiency of the business processes concerned.  Another issue is regarding the management of the more number of suppliers effectively (Pahl and Voß, 2014). These suppliers are supposed to be vital for the growth and expansion of the business procedures towards the larger area of the market segments concerned. At present times, the economic crisis over the different parts of the world has somehow affected the supply chain and the management activities and therefore in order to reduce the impact of the economic crisis, the accumulation or the collection of a lot of funds is required (Monczka et al., 2015).  The desired impact of the increase standards for the products has significantly affected the business procedures of NTUC giving rise to an increase in the quality of the products, which finally raises the cost generated for the entire process.   On the other hand, the impact of the cold chain standards throughout the dollar has significantly affected the benefits provided by the firm to the customers (Kenne et al., 2012).  There are some of the essential indicators, those are designed to bring out the desired impact of the issues on the growth and expansion of the business processes.  Cold chain dairy and milk, as well as the chilled pork, were used as the procurement to the distribution centers by NTUC. Moreover, the operational indicators are considered to be the crucial areas where the improvement needs to be made s to provide the desired elevation in the execution of the supply chain planning  activities (Johnson, 2014). There were issues regarding the time interment activities which were spent on dealing with the suppliers and therefore the delay occurred sometimes regarding the execution of the deliveries to the different customers concerned. One of the operational indicator as "number of return cases from the customers" reveals the unsatisfied customers regarding the wrong delivery or the issues regarding the quality of the products (Jacobs and Chase, 2013). Thus, there needs to be an improvement in enhancing the overall quality of the products as this will help in improving the supply chain planning activities to a great extent.

Customers are considered to be the most important sets of the concerned organization as they help in evaluating the desired growth of the business processes.  There are many of the well-known companies who face significant issues related to the supply chain and the management activities and therefore it becomes very important to formulate effective strategies as to reduce these issues (Ivanov et al., 2012).  First of all, the quality of the products should be checked before the delivery of these respective products as this will help in reducing the number of the return cases from the customers. The returning of the products from the customers increases the cost price of the supply chain activities giving a final rise in the extra expense and affects the business processes of the firm (Ivanov & Sokolov, 2013). Therefore, the management and control department plays the most important role in evaluating the growth and the expansion of the business processes to a large area of the market segments.  Moreover, NTUC can form a group of three to four members in order to monitor the quality of the products before it is being shipped to the concerned customer as this will help in reducing the return cases from the clients (Heizer et al., 2016). In some of the cases, it has been seen that the color of the quality of the products sometimes goes out of stock and at that point of instance it becomes the primary responsibility of the employees to call the customers and asks regarding the same as this will increase the satisfaction level of the customers that the firm is looking forward the best quality and quantity of orders for delivering it to the clients. Moreover, the reduction of the extra costs caused due to the distribution and the supply of the products to the wide area of the market segments needs to be critically reduced (Çatay et al., 2014). The management team of NTUC requires taking immediate steps in evaluating the desired effectiveness for the reduction of the costs incurred during the shipping of the products. Moreover, the shipping of the products and making it reach faster to the concerned customers will enhance the reliability of the clients will help in increasing the profitability of the firm to a great extent (Dekker et al., 2013).  It has been measured that there are some of the orders that sometimes got damaged while handling or because of the movement in the DC and therefore it needs to be reduced as to increase the quality of the products and making it safe to reach the customers. The damage caused during the distribution of the products from one place to another significantly affects the entire business practices and raises the process incurred while handling. This also increases the chances of getting the products returned by the customers due to damaged products received.   In order to improve the overall supply chain planning  processes of NTUC, it is vital to implement latest innovative tools as well as innovative techniques as they will increase the satisfaction level of the customers (Dyckhoff et al., 2013).  The use of the barcode technique is of great importance as it will help in evaluating the desired cost price and the quality of the products delivered to the respective customers. The storage capacity of the warehouse needs to be increased as per the demands received from the customers, moreover, the safety of the products kept in the warehouse should be of top level as this will increase the overall efficiency of the profits earned from the concerned business processes (Fernie & Sparks, 2014).  Entirely, it is estimated that the improvements in the quality of the products before delivering it to the respective customers will help in reducing the number of return cases and moreover it will reduce the increase in the extra costs due to returning of the products.  Use of the latest tools and the innovative techniques will help in increasing the overall performance of NTUC throughout the target market areas of Singapore.

Conclusion

In this research study, the researchers describe the supply chain planning of the NTUC Fairprice Company. They also recommend some innovative ideas to improve their business process and also to increase their profitability. The improvements in the quality of the products before delivering it to the respective customers will help in reducing the number of return cases and moreover, it will reduce the increase in the extra costs. The systematic training programs help the organization to expand their knowledge about the operating process and also help the company to enhance and maintain the variety and quality of their products and services.

References

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