Management Accounting for Bunnings Warehouse: Providing Efficient Staffs During Peak Season

This article discusses the 'bank of hours' roster system used by Bunnings Warehouse and its impact on employees. It explores the concept of management accounting and its techniques to support decision making and risk management. The article suggests solutions to improve employee satisfaction and reduce turnover rate.

Running head: MANAGEMENT ACCOUNTING
Management accounting
Name of the student
Name of the university
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To: The board of Directors of Bunnings Warehouse
From: Manager of the consulting service
Subject: Providing efficient staffs during peak season.
Bunnings Warehouse is an international hardware chain present in Australia and New
Zealand, owned by Wesfarmers since the year 1994. They have a wide network of stores all
over Australia, Ireland and The United Kingdom. The hardware chain presently has around
294 stores and around thirty thousand employees along with a market share of twenty percent
n the Australian retail hardware sector. Some of the competitors of Bunnings include Mitre
10 and Home Timber and Hardware along with various other retailers. Bunnings is known to
follow a roster system for two weeks during the busy period. This was objected by several
employees as they are made to work overtime during the peak periods where they are losing
thousands of dollars. The workers union highly objected the roster system of ‘bank of hours’.
Although, according to the chief executing officer of Bunnings Warehouse, the roster system
of ‘bank of hours’ is absolutely legal. This is International household hardware chain is
owned by Wesfarmers since the year 1994. It also has stores all over the world. Bunnings
originated in Australia in the year 1887. The ordinary hours of the work of Bunnings can be
rostered ant any point of time. The staff members can be rostered at any point of time and can
be expected to regularly rostered at any time of the day. The timings include night hours as
well as they have to work on Sunday. Due to the practise of ‘bank of hours’, the hardware
giants are facing lot of complaints from the staffs. It usually average the rostered hours of the
part time as well the full time employees.

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It has been found out that the famous hardware chain Bunnings Warehouse has been found to
follow ‘bank of hours’ roster for which the employees are not seemed to be satisfied. The
bank of hours’ roster method is a way where the staffs of the hardware chain are sent back
home during the lean season and are made to work overtime during the busy period. The
employees are known to have slammed this method as according to them they are losing
thousands of dollars in this way. Bunnings warehouse sent their employees home during slow
periods in order to make up their hours during peak times. However, according to The Retail
and Fast Food Workers Union, workers are losing out huge amount of money. Although the
chief executing officer of Bunnings states that it is absolutely legal to practise ‘bank of
hours’. The workers working hours are averaged out all throughout the year and this also
leads to missing out an overtime pay. Thought the practise is legal, the workers union of the
biggest retailer wants to be scrapped altogether. The CEO however states that this system
provides benefits to the team members as well as to the customers. One of the biggest
strength of Bunnings is offering high quality products. With high quality content and site
design along with providing good customer services, Bunnings has become one of the
topmost international hardware chain in Australia. Some of the weakness of the hardware
chain is that it is quite expensive and it also does not have a good marketing experience. The
biggest strength of Bunnings warehouse is that it is one of the famous household hardware
retail chain in Australia. They also have well trained consultants available for doing
specialized jobs. On top of that they provide things at very low prices along with the loyalty
programs. Bunnings has around 300 stores in Australia. Providing free advices and trainings
can also be seen as a strength. One of the major weakness of Bunnings is the non-availability
of the online purchase platform.
Their system of delivery is also not up to the mark. There is also a presence of high turnover
rate of the employees as the result of roster method which can be termed as a threat as well as

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weakness. Some of the opportunities of the warehouse can include customer loyalty program
and also increasing their business in New Zealand. Expanding their business in both Australia
and New Zealand can also be termed as an opportunity. The chief operating officer of
Bunnings warehouse states that the team members should remain engaged and committed for
the success of the business. He also stated that he will provide market leading entitlements
that is going to attract the best team. He also stated that system of bank of hours had been
there for some time and will provide benefits to the team members and the consumers.
Bunnings also has future opportunities that is it can offer purchase platform online. They can
also grow more outlets in Australia. There are presence of three competitors of Bunnings that
are Classis Home Improvements, Australian Outdoor Living and Home Hardware. The
system of bank of hours can be present in all the sectors where the employers may introduce
such schemes. In case of production, employee understanding, the satisfaction of the
customer and the efficient communication are very critical in the level of operation. The
primary markets of Bunnings Warehouse range from small to medium sized owner builders.
The cash sales of Bunnings grew 13% and the total sales revenue of the Warehouse was $8.5
billion in the year 2009 which accounted for about forty-four percent net profit of
Wesfarmers. Bunnings presently employs around 28,000 team members. It has also proved to
be a strong result in all the states of Australia and across all the product ranges. It have been
achieved with the help of good operational strategies and by proper execution of strategies.
Bunnings is known to have expand its operation with Small Format Stores, Trade Centres,
new Warehouse all throughout Australia and New Zealand which strongly focuses on the
values. There has also been an existence of lot of political barriers in this particular hardware
industry. However, in Australia the market for hardware has grown considerably over the
last few years which is estimated to generate sales of around $22 billion per annum. The
government of Australia has also supported the growth of Australian domestic hardware

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industry so that more jobs are created. Bunnings is also known to have the ability to reduce
cost with the help of volume discounts from suppliers and utilization of efficient capacity
which will not be achieved by new entrants who has little market share. The Australian
hardware retail market is dominated only by few companies who sells products to many
customers which comprises of both individual customers and business.
Bunnings Warehouse also faces lot of threats from other competitors around the world. The
regulations of the government and Australia Consumer Competition Commission restricted
Bunnings from further expanding through acquisitions. The practise of ‘bank of hours’
system therefore, can be termed as weakness as well as threat as employees tend to leave
when they are made to work overtime without paying. The turnover rate of the employees can
increase if proper steps are not taken. Therefore, the system of ‘bank of hours’ can be termed
as a threat as staffs as the turnover rate can increase when they are made to work more during
the busy times. Bank of hours is a system where the hours of the permanent team members
are averaged over the course of the year. The bank of hours works in a same way for part
time team members. Bunnings had been under fire for sending its employees back home
during slow periods and then also forcing them to work more during the busy season without
paying extra. The hours of work that can be banked should be limited to those hours which
should attract the normal hours of payment.
The major issue that have been identified here is that Bunnings Warehouse follows the ‘bank
of hours’ system where the staffs are sent back home during the lean season to make up
during the peak season. The use of accounting techniques for business analysis in order to
support the formation of strategy, decision making, risk management and execution of
business is termed as management accounting. Some of the techniques of management
accounting are cost benefit analysis, data mining, activity based costing, net present value,
statistical population and demand forecasting. The employees are not happy with the roster

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system and the union workers want to scrap it altogether. This issue can be resolved by
keeping the permanent full time staffs should be made as the backbone of the service delivery
and the casual workers can be made to work in and out of the roster methods according to the
demand of the work flows. The time should also be made flexible as much as possible. The
company should manage the rosters properly in order to avoid employee turnover. The
consulting service can provide qualified and experienced workers who can provide backup to
the warehouse company during the peak season when there will be a death of staffs.

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