Global Logistics & Supply Chain Management of Kmart Australia

This presentation discusses the supply chain management of Kmart Australia, a subsidiary of Wesfarmers, and their use of intermodal and multimodal means of transport and logistics services. It covers the modes of transportation, transportation risk management, and more.

GLOBAL LOGISTICS &
SUPPLY CHAIN
MANAGEMENT
KMART AUSTRALIA

TABLE OF CONTENTS
• INTRODUCTION
• BACKGROUND OF THE
COMPANY
• GLOBAL
TRANSPORTATION
• MODES OF
INTERNATIONAL
TRANSPORT
• TRANSPORTATION RISK
MANAGEMENT
• CONCLUSION
• REFERENCES

INTRODUCTION
• The supply chain management is the series of
activities used for planning , executing and controlling
a product’s flow starting with acquiring the raw
material and production by reaching the doors of the
customers in a most cost –effective and streamlined
way (Arvis, 2018).
• The concern of the transportation costs should be
addressed by the companies because it affects the
overall structure of the entire organization
• The global organizations get much benefitted by the
supply chain management
• This presentation highlights the supply chain
management of Kmart company which is a subsidiary
of Wesfarmers

BACKGROUND OF THE COMPANY
• The Kmart company ( Australia ) is a chain of retail
stores operating in almost 230 stores across Australia.
• The company began in the year 1969
• It primarily operates in the general merchandise and
clothing retail sector
• There are more than 34, 000 employees working in the
stores (kmart.com ,2018).
• The company is associated with the international
suppliers such as Bangladesh , Indonesia, China , India
and Cambodia
• The company annually earns $6 billion revenues
• The managing director of the company is Ian Bailey

CONTINUED……………….
• The company primarily focuses on providing best quality goods in
cost-friendly manner to the customers
• The organizational hierarchy of the company is constructed
according to the functions of the executives and employees
• The entire team is divided into groups and each group accomplishes
certain tasks (kmart.com ,2018).
• They have the HR department , IT department and the service
management department
• They mainly use trucks for local goods transportation
• They also have the shipping consolidation
• Strategic logistics and strategic sourcing are the two fundamentals
of their successful supply chain (kmart.com ,2018).

GLOBAL TRANSPORTATION REGULATIONS
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• Their exceptional CBX system supports to meet the
requirements
• Their enterprise resource planning system helps to
combine the buyers and the merchants
• The cross-docking system analyses the types of
equipment used in the entre process of supply
chain. It is capable of arranging over 6,000 objects
to 88 different stores per hour(kmart.com ,2018).
This System is also enough cost –efficient
• The cost-belt system on the other hand helps to
manage the local imported products and orders of
the customers are arranged
properly(kmart.com ,2018).
• This system operates with two identification
methods , bar code readers and stickers

• The mode of transportation used by the company determines the expenses of the
company
• The company focuses on the transportation modes because the selection of wrong
transport can incur extra costs
• The major modes of transportation are via sea, air, rail and road
• K-mart has a well-structured and inbound management system. The company owns
more than 3000 tractors and 4000 drivers (kmart.com ,2018).
• The inbound logistics invite lower costs but it is limited to local delivery only
• The maritime transportation is used for international deliveries but it is highly
expensive
• Kmart company only uses maritime transportation to deliver huge and bulky goods
• Rail transportation and pipelines are also useful modes of transportation
GLOBAL MODES OF
TRANSPORTATION

CONTINUED…………..
• The railways has the lowest number of constraints highly preferred
by freights
• The rail is capable of bearing 23,000 tons weight at a time
• The pipeline routes are also multitaskers which can function both on
land as well as on water.
• The cost of the pipeline mode vary according to distance and
diameter
• The airlines are another way to transport goods to another country
• The airlines are expensive hence , the Kmart company uses it on
emergency cases and little amount of goods are carried
(kmart.com ,2018).
• All of the above means of transportations are the most effective

TRANSPORTATION BY ROAD
• Advantages - Road is the most cost effective
mode of transportation
• It is beneficial in delivering large fleets
• The goods can be sent from any location to
any location (Fernie & Sparks, 2014).
• The GPS system helps to track the delivery of
good

DISADVANTAGES OF
TRANSPORTATION VIA
ROAD
• There are so many constraints of
transporting via roads
• The time taken in the long distance
deliveries is high
• The natural disasters on the way can
disrupt the flow of delivery
• The governmental carbon-emission
regulations can disturb the
transportations
• There are also traffic regulations and
road accidents
• The chances of destruction caused by

TRANSPORTATION THROUGH
SEA Click icon to add picture
• Advantages –
• Through the maritime
transportations large volumes of
goods can be shipped
• It is cost efficient but in some
cases it incurs extra expenses
• The shipping and insurance costs
are not that much high
• Low chances of damage in transit

DISADVANTAGES OF
TRANSPORTATION VIA SEA
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it is comparatively slower than other modes of
transport
The tracking of goods becomes difficult in such
cases
The goods need to be supplied in the scheduled
time

TRANSPORTATION RISK
MANAGEMENT
• There is always a risk of loss or damage to
goods in transit.
• Transport risk management is a business
strategy that is used by business organisations
to deal with such risk.
• This risk might result in financial and
operational loss for the company.
• Management of this risk is very important for
an organisation that is constantly sending its
product and services through various mode of
transportation

CONTINUED……
• Some of the policies adopted by the company
are as follows-
• Specification of insurance liability in contract
with suppliers and customers.
• Selection of appropriate insurance company.
• Formulation of specific contract with insurance
company (Bektaş, Crainic & Van Woensel, 2017).
• Documentation of relevant papers.
• Estimation of risk involved.
• Calculation of estimated risk in financial terms

FACTORS TO BE
CONSIDERED
• Overall cost of insurance
• Total coverage available in a financial year
• Insurance premium to be paid
• Additional services provided by the insurance
company
• Ease of doing business (Christopher, 2016).

CONCLUSION
Therefore, it can be concluded that the Kmart company is an extremely well-bund and
well- structured retail company which functions both locally and globally using intermodal
and multimodal means of transport and best logistics services. . However, the process is
not at all easy. This is a huge responsibility which includes many hazards on the way such
as legal environmental regulations, natural hazards and many others. These risks can be
managed by adopting logistics risk management policies and practices. The Kmart
company is seen to be trying to mitigate the issues effectively and as much as possible.

REFERENCES
Arvis, J. F., Ojala, L., Wiederer, C., Shepherd, B., Raj, A., Dairabayeva, K., & Kiiski, T. (2018). Connecting to Compete 2018:
Trade Logistics in the Global Economy. World Bank.
Bektaş, T., Crainic, T. G., & Van Woensel, T. (2017). From managing urban freight to smart city logistics networks. In Network
Design and Optimization for Smart Cities (pp. 143-188).
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply
chain. Kogan page publishers.
kmart.com (2018). [online] Kmart.com.au. Available at: https://www.kmart.com.au/ [Accessed 26 Sep. 2018].