Strategic Supply Chain Management for Wesfarmers: Issues, Significance and Strategies

This article discusses the supply chain issues faced by Wesfarmers, the significance of supply chain management, and strategies to resolve the issues. It also highlights the importance of lean and agile strategies and logistics strategies in supply chain management.

Strategic supply chain management

Strategic supply chain management
Table of Contents
Introduction.................................................................................................................................................3
Issues identification.....................................................................................................................................3
Significance of the supply chain management.............................................................................................6
Strategies to resolve the supply chain management issues..........................................................................8
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
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Strategic supply chain management
Introduction
The primary objective of this task is to outline the supply chain issues that are entertained
by Wesfarmers while functioning and operating. It is continuation part of the assignment 1. In
previous assignment, factors and issues of the supply chain had been explained. Now it also
discusses the various other issues of supply chain in briefly. Along with this, effective strategies
have been explained in the task to eliminate the supply chain issues. Wesfarmers faces ample of
issues while implementing the business globally.
Wesfarmers is a conglomerate company that was formulated in 1914 by the Australian
farmers. It is one of the biggest listed companies in the Australia (Wesfarmers, 2018). The
company is having employee’s approx 220,000 who are performing effective roles. The
company provides energy, fertilizers, chemicals, and industrial and safety products to the
customers across the world. It is one of the biggest private sector employers. The main motive of
the firm is to satisfy the needs and demands of the customers through the provision of the goods
and services on a professional and competitive basis (Wesfarmers, 2018).
Issues identification
It has been found that supply chain management plays a significant role in each and every
company. As the same way, it also plays a vital role in Wesfarmers. The supply chain
management is the wider range of activities and operations required to plan execute, and control
a product’s flow, from acquiring raw material and production through distribution to the final
customers in a cost effective way (Christopher, 2016). The supply chain management helps in
optimizing the efficiency and speed in a hassle free manner. Along with this, it also increases and
improves level of satisfaction of the customers. After the various researchers, it has been
identified that ample of issues are faced by Wesfarmers while implementing the business
activities and operations in a large extent. All these challenges may hamper the success and
performance of the company adversely (Tayur, Ganeshan & Magazine, 2012). It has been
highlighted that Wesfarmers faces many challenges or issues due to poor quality of raw material.
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Strategic supply chain management
It is stated that raw material issues reflect the company’s significant social and environmental
impacts that could affect the decision and assessment of the stakeholders. Apart from this, it also
observed that rate of child labor in the company has also increased simultaneously. It could also
affect the efficiency and financial image of Wesfarmers adversely in the global market. It is very
complex for Wesfarmers to manage and control the key problems and issues related to global
supply chain management. It has been studied that stock does not turn over in a short time period
in the company. It produces significantly less profit as compared to the needs and requirements.
Therefore, it may affect the overall revenue and outcomes of the firm. On the other hand,
Wesfarmers is facing a harsh and intense competition from the various other brands that has a
formulated supply chain process which leads to threat. Another issue that faced by the company
is lack of professional skilled worker (Marucheck, Greis, Mena & Cai, 2011). The organization
has failed to appoint high skilled and talented staff at the workplace due to high employee
turnover rate. This could also hamper the goodwill of the firm in the international market. Proper
maintenance of transportation tool is one of the significant key issues in front of the top
management. Due to lack of effective maintenance of transportation tools and techniques, the
overall performance and sustainability of the company could be hampered. Transportation is one
of the vital parts of supply chain management. Without transportation, supply chain management
can be effective and successful (Fernie & Sparks, 2014).
As stated by Carter & Liane Easton (2011) that poor delivery system also affects the long
term mission and vision of the company negatively. Due to lack of delivery, the organization is
unable to provide retail products and services to the customers across the world. In this way,
delivery is major concern for Wesfarmers that should be improved. Supervision and control
another issues that are occurred in the organization. Due to lack of monitoring and supervision,
Wesfarmers has failed to maintain proper inventory level in the workplace. In this way, many
challenges are faced by the company (Ahi & Searcy, 2013). It has been analyzed that
Wesfarmers faces ample of challenges and issues due to poor and ineffective communication.
Due to lack of effective communication, the company is unable to maintain proper
communication and collaboration with customers. Technology is also a serious concern that is
dealt by the company while maintaining an effective and unique supply chain management at the
workplace. It has been found that employees at Wesfarmers uses traditional and old technologies
therefore, they are unable to increase and enhance the productivity and efficiency (Tang & Musa,
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Strategic supply chain management
2011). The modern and advanced technologies are not being used by the employees within the
organization. It could also affect the quality and features of the products adversely. Resistance to
change is another issue that would have direct impact on the outcomes and effectiveness of the
firm. It also creates various conflicts and issues among the workers at the workplace. All these
challenges are faced by the company in today’s modern world. It has been studied that supply
chain management is an important and effective part of each and every company. Therefore,
special attention is required to reduce and overcome on the supply chain management issues. It is
seen like Wesfarmers is the next paragon of excellence that is falling (Seuring, 2013). Due to
lack of attention, the company is unable to fulfill the needs, requirements and expectations of the
customers. Therefore, it is influencing the revenue and productivity of the company. The
restocking challenge emerged as Wesfarmers that could also become a biggest issue for the
company. Transportation charges are not same at every place therefore, the customers are unable
to buy the products and services. Along with this, prices of the retail products are constantly
changed thus customers could not afford money to buy the products. Moreover, logistics
functions at Wesfarmers are not controlled by the company.
Uncovered and effective logistics is another obstacle in Wesfarmers. Re-setting
merchandize displays is also complicated business for the firm. It is also making more complex
to identify and analyze what customers are going to want and what they getting (Sanders, 2012).
Besides this, globalization is another critical issue in supply chain management that reduces the
profitability and outcomes of the firm(Hassini, Surti & Searcy, 2012). Apart from this, social
media is creating new pressures and stresses for the consumers to conform while putting pressure
on the company to utilize these sources of information to react to changing preferences and
needs in order to stay relevant and interesting. The quality and compliance are other issues that
are encountered by the company in the supply chain management. Market instability is also an
issue in supply chain management that is influencing the demands of the customers. Wesfarmers
needs to focus on these issues and challenges to uplift its profitability and outputs in the
competitive market (Krajewski, Ritzman, & Malhotra, 2015).
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Strategic supply chain management
Significance of the supply chain management
After the various researchers, it has been analyzed that supply chain management plays a
vital role in each and every company to enhance outcomes with minimizing the cost of the
company. It is seen that SCM is the backbone to all business in today’s modern world. The
effectiveness and efficiency of the supply chain management depends on the availability of
inventory, raw material, IT system, availability of the products, and right and effective supply
network. SCM helps to set a really effective and unique strategy for any organization that is
aiming big and bright in future. So SCM plays a vital role to fulfill the needs, demands and
requirements of the customers in the competitive market (Giannakis & Louis, 2011). No
company can attain its desired goals and objectives without using supply chain management. The
significance of the supply chain management has been discussed below.
 After the various researchers, it has been noted that SCM helps in boosting and augment
the customer service in the global market. It is seen that customers expect correct and
good quality of the products and services at the right time. Availability of the expected
goods and services in the correct place is also significant for the firm. SCM takes care of
all these attributes in the international market.
 If Wesfarmers maintains an effective and attractive supply chain management at the
workplace then it will also help to reduce and avert the operating cost within the
organization. Designing SCM helps in the correct and appropriate way supports is
procuring and securing raw material at reasonable prices. Along with this, it declines the
cost of the distribution in the workplace. It also reduces duplicate jobs in the
manufacturing process.
 After the various studies, it has been noted that SCM improves and boosts the financial
position of the company. It increases cash flow, profit leverage and on the other hand, it
declines fixed assets.
 The supply chain management is essential for Wesfarmers to boost the customer service
and improve the financial standing of the company. Along with this, purchasing cost and
supply chain cost can also be reduced by using unique and effective supply chain
management. It is analyzed that the company commits to strong and respectful
relationship with suppliers across the world. Therefore, SCM is significant to maintain
good relationship with customers in the global market. Striving for effective and better
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Strategic supply chain management
efficiency and effectiveness in the ample of the customers supply chains ensures their
constant competitiveness. SCM also helps in improving and augment the quality of the
products in the international market.
 It also increases level of satisfaction of the customers and further, it also enhancing the
performance of the employees. Supply chain reform and an exploring store network have
supported drive a profit growth and revenue of around 11% for Wesfarmers. The CEO
Richard Goyder believes that result and outcome reflect the group’s growing
transforming retail chains and retail store networks.
 SCM plays a significant role in organizational activities and operations and it is an
element to operational effectiveness that can be implied to customer satisfaction and
company’s growth (Monczka, Handfield, Giunipero & Patterson, 2015).
 Inventory cost can be reduced with the help of sustainable supply chain management. It
provides a medium to Wesfarmers for sharing information between partners.
 Effective and unique supply chain management helps the company to maintain better
trust and loyalty among the customers as it also improves the process integration.
 It is seen that SCM renders various techniques and tools that help business organization
to diagnose and identify the problems and issues and further also provide solution of
these problems and issues across the business environment. It also plays a critical role in
shifting products more rapidly to their destinations. The supply chain management helps
the business organization in a hassle free way. All the adavantages and significance of
CSM makes its future so bright and just because of changing trends in the company’s
SCM becomes the most crucial and effective business discipline in the world in today’s
competitive world (Ross, 2013).
 The sufficient level of inventory can be maintained with the help of adequate and
effective supply chain management. In this way, wesfarmers can gain various advantages
by maintaining unique and effective supply chain management at the workplace.
 The supply chain management at Wesfarmers includes five main and important functions
such as aligning flows, coordinating processes, integrating functions, designing complex
systems and handling the resources (Govindan, Soleimani & Kannan, 2015).
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Strategic supply chain management
Strategies to resolve the supply chain management issues
It is significant and effective for supply chain to process and produce the fresh retail
products and services at the appropriate location and at the appropriate time in order to beat the
competitors in the global market (Wisner, Tan & Leong, 2014). Also, it is significant for the
survival and growth therefore there is a requirement of strategies, policies and their application
(Wang, Lai & Shi, 2011). Once these approaches and strategies are identified and analyzed by
Wesfarmers then only the application of supply chain will be effective. The strategies and
approaches that can be applied to enhance and reduce the key issues of the supply chain include
the followings:
Lean and agile strategy to the supply chain: After the various studies, it has been highlighted
that leanness is used in the supply chain to increase and augment the productivity and
performance of the employees and on other hand, it also helps in striving with competitors in the
international market. In addition, agile is the nest step to the leanness which needs to be
implemented after the lean (Yeh & Chuang, 2011). Both the strategies help the company to
reduce and eliminate the challenges and problems of the supply chain management. The wastes
of the lean production are required for the agile production. The lean and agile in supply chain of
Wesfarmers reduce the work time to produce the products and services in the global market. In
addition, it also helps in improving and enhancing the quality of work and reduces the wastage at
the workplace. It also facilitates the improvement and enhancement of the quality of retail
products and services. Lean and agile strategies help the firm to reduce and eliminate the supply
chain management issues at the workplace (Wu & Pagell, 2011).
Logistics strategies: The key to success and growth of the supply chain is directly and
effectively associated with logistics of the firm. Thus, it is essential for Wesfarmers to have
unique and effective logistics strategies in place. This strategy need to be planned after
considering the distribution centers and transportation mode that Wesfarmers will initiate. By
using effective and unique logistics strategies, the company has been able to increase the
satisfaction level of the customers in the competitive market and besides this, it also prevent the
supply chain issues within the organization (Cao & Zhang, 2011).
Purchasing and procurement strategies: It has been analyzed that purchasing and procurement
play a significant function in the supply chain management. This strategy helps the firm to avert
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Strategic supply chain management
the issues and challenges of the supply chain management. This declined raw material rate can
enhance and boost the margin of profits in the market. By using this strategy, the firm has been
able to maintain sufficient level of inventory in the global market. Along with this, total quality
management shall be adopted by Wesfarmers to maintain the quality of the retail products. If the
purchasing and procurement strategy are followed then service quality can be improved. The
supplier relationship will be effective and unique if both the departments will work efficiently
and effectively (Dekker, Fleischmann, Inderfurth & van Wassenhove, 2013).
Marketing management strategy: One of the significant strategies that can be used by the
company is marketing management strategy to eliminate and decline the supply chain issues
within the organization. The marketing strategies of the firm must include the customer value
delivery, customer value and customer vale delivery process. The marketing management
strategies should also include the understanding and identifying the customers and their needs,
demands and requirements. It helps in reducing the challenges and further brand recognition will
be built and developed. Along with this, it helps in providing a roadmap to reach its targeted
customers in the competitive market. Effective delivery can be developed with the help of
effective and unique marketing strategy. All these strategies help Wesfarmers to reduce the
supply chain management problems and key challenges in the global market (Hugos, 2018).
Apart from these strategies, the firm can use various ways through which supply change
management issues can be eliminated. Some of the ways have been detailed below.
 The company maintains a relentless concentrate on rendering safe workplace to the
employees for performing roles and responsibilities in a hassle free manner. The skilled
and talented employees shall be appointed by the company to handle and control the
supply chain management within the organization.
 Along with this, the company is also providing growth opportunities to the workers to
enhance and increase their job performance and develop their careers. It will also help to
maintain adequate level of inventory at the workplace.
 The company should motivate the workers for focusing on the inventory management
within the organization. Apart from this, the firm is also committing to render good
quality of the goods and services to the customers across the world (Krause, Vachon, &
Klassen, 2009).
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Strategic supply chain management
 Data management and integration is another source to handling supply chain
management issues by connecting the manufacturer’s supply chain management systems
with those of their partners and suppliers. It is noted that data management and
assimilation address and resolve the supply chain management hurdles and issues within
the organization.
 Apart from this, the company should use new and innovative technologies to produce the
products and services in the market. As it helps in making production process easy and
interesting and it also save the time of the producers.
 It has been analyzed that Wesfarmers should implement the effective and unique best
practices to reduce risks and issues that are interconnected with supply chain.
 Wesfarmers should improve and enhance the infrastructure system and procedures to
provide high quality of the retail products. Open communication shall be maintained by
the company to maintain strong relationship with customers.
 Having a favorable working environment and culture could also help to reduce the
supply chain and logistics issues within the organization. Training and development
coaching must be provided to the employees to analyze and identify the needs, demands
and requirements of the customers effectively.
 Besides this, RFID (radio frequency identification) technology must be used by the
company to determine the real time inventory at the workplace. All these ways help
Wesfarmers to reduce and tackle the supply chain management issues within the
organization.
Conclusion
On the above mentioned analysis, it has been concluded that supply chain management
issues affect the sustainability of the firm. The above mentioned analysis outlines the supply
chain issues that are being faced by Wesfarmers while operating its business activities and
operations. It discusses that how the company is overcoming on these challenges and issues by
using several unique and effective strategies. Effective strategies are using by the company to
handle these key issues. Now it is recommended that the firm should focus on the human
resource management to handle the grievances and issues of the customers related to the supply
chain.
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Strategic supply chain management
References
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