Strategic Supply Chain Management for Wesfarmers: Challenges and Recommendations

This study focuses on the importance of supply chain management for Wesfarmers, a retail organization in Australia. It highlights the challenges faced by the company and provides recommendations to overcome them. The study identifies the main elements of supply chain management and analyses the current supply chain management process of the company. It also discusses the issues faced by the organization, including poor quality of raw material, transportation cost, lack of skilled employees, and conflicts among employees. The study recommends providing training to employees, monitoring child labour, managing manufacturing cost, and establishing outlets in areas with high transportation cost.

Running head: STRATEGIC SUPPLY CHAIN MANAGEMENT
Strategic Supply Chain Management
Name of the Student
Name of the University
Author note

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Executive summary
In the current business scenario, the importance of supply chain management has increased in
order to increase the value of the customer. This is also very important in the case of
increasing competitive advantages in the market. As stated by Christopher (2016), demands
of raw materials are being fulfilled through proper management practices in the supply chain.
Therefore, this can be said that through the proper management in supply chain process, the
organization will be able to achieve its goal and objectives by fulfilling the demands of the
customers. In this study, it has been identified that supply chain management has the higher
level of impact on organizational development. This can be said that by following this
process, the organization will be able to manage the rate of profitability by increasing its
customer base. The supply chain elements have been highlighted in this study which is the
main influencing factor. In the case of analysing the supply chain issue of Wesfarmers, this
has been identified that the company is facing the issue regarding transportation cost and
improper management of the plan. It has also been mentioned in this study that due to lack of
skilled employees, the initiatives of the company are getting hampered.

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Table of contents
Introduction................................................................................................................................4
Background of the company......................................................................................................4
Elements of supply chain management......................................................................................5
Analysing the current supply chain management process of the company...............................6
Analyse the issues which have been faced by the organization.................................................7
Conclusion and recommendation...............................................................................................9
References..................................................................................................................................9

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Introduction
In the current business scenario, the importance of supply chain management has
increased in order to increase the value of the customer (Chang, Yeh & Liu, 2015). This is
also very important in the case of increasing competitive advantages in the market. As stated
by Christopher (2016), demands of raw materials are being fulfilled through proper
management practices in the supply chain. Therefore, this can be said that through the proper
management in supply chain process, the organization will be able to achieve its goal and
objectives by fulfilling the demands of the customers. In this study, the importance of supply
chain management will be focused on highlighting the theories. In order to discuss about the
importance of supply chain management practices, the study has highlighted the company
named Wesfarmers. The supply chain process of Wesfarmers has been focused in this study.
The issues regarding supply chain management and its impact on business have been out in
this study. At the end of this study, needed recommendations for dealing with the challenges
have been provided.
Background of the company
In order to highlight the importance of supply chain management in business, the study has
highlighted Wesfarmers, which is the famous retail organization in Australia. In the year
1914 the company was founded, and within few years it has established its large customer
base (Wesfarmers.com.au, 2018). The company also has the huge contribution to the
Australian economy. In the year 2016, the business revenue of the company was AU$65.98
billion (Wesfarmers.com.au, 2018). Wesfarmers is considered as the largest private
organization in Australia. The company is surveying with the total number of 220000
employees. Recently the company is providing service in Bangladesh, Australia, Ireland,
New Zealand and the UK. Head quarter of Wesfarmers is in Perth. The company is famous

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for providing good quality of the product in lower ranges. If the profitability age of
Wesfarmers is being analysed, it will be identified that within few years it will rule in the
large portion of the global retail industry. On the other hand, from the company analysis, this
can be said that the target customer of the company is middle class and lower middle class
(Wesfarmers.com.au, 2018).
Elements of supply chain management
The significance of supply chain management it has been identified that it needs to be
done properly because supply chain has the higher level of impact on the organizational
productivity (Stevens & Johnson, 2016). Therefore, this can be said that supply chain
management is very influencing in manufacturing to delivery process. In this study, main
elements of the supply chain have been discussed. Operation, integration, purchasing,
distribution are the main elements in supply chain management. Integration is considered as
the important part in the supply chain. This can be said that through proper integration the
effectiveness of supply chain management is being maintained. On the other hand, the study
has highlighted on operation, by which the input and output functions of the company is
being managed. The input and output functions are very important to be maintained for
managing the process of supply chain. As stated by Ralston et al., (2015), this can be said that
total inventory procedure of the company is being influenced through the supply chain
management because the rate of production is being affected.
As opined by Qrunfleh & Tarafdar (2014), the supply chain controls the raw material,
product, goods and service of the company. Therefore this can be said by maintaining proper
supply chain management, the organization will be able to achieve its goals and objectives.
After the completion of operation process, the process of purchasing started. Another way

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Wu, Chuang & Hsu (2014) stated that, this process involved in marketing, store management
and customer service. After purchasing the products from stakeholders, the products are
being distributed by following the transport and communication process of the country. On
the other hand, it has also been mentioned in this study that financial plan of an organization
plays an important role to influence the supply chain management plan. It can be said that
depending on the financial situation of an organization the strategic management practices are
being done.
In the words of Camerinelli (2016), not only the financial condition of the company
impacts on the supply chain management, but also the business strategy innovation plans of
the company impacts on process of supply chain management. It has been identified that
technological development in the organization impacts on the process and implementation of
supply chain strategy. Efficient employees play an important role in the case of implementing
the process properly (Handfield et al., 2015). It has been mentioned in this study that aim of
adopting supply chain strategy is to increase the market base as well as the rate of
profitability. As transportation is an important part of supply chain management, therefore
this can be said that depending on the transportation and communication facility of a country
the process of supply chain is being developed.
Analysing the current supply chain management process of the company
It has also been identified that in the year 2017 the supply chain growth rate of the
company has increased near about 11 percent. From the article of 2012, it has been identified
that the net profit of the company was $2126 million (Wesfarmers.com.au, 2018). In the same
year, the company named Wesfarmers has improved its supply chain process in order to
deliver higher customer value and has introduced merchandise offers for the consumers. It
has also invested huge amount on the improving its supply chain and store networks. As its

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result, the company has grabbed the attention of a large number of customers. Therefore, this
can be said that by implementing these strategies the organization has got the chance to
increase its rate of profitability.
In the same year, the financial report of the company has published, where it has been
mentioned that the company has taken an initiative towards transforming Coles. On the other
hand, this has also been identified that it has also invested $40 million for restructuring the
targeted supply chain (Wesfarmers.com.au, 2018). It can be said that this was the smartest
strategy adopted by Wesfarmers for increasing its rate of profitability. From a recent supply
chain report of Wesfarmers, this has been identified that the company has taken the initiatives
towards the transformation of Coles. This has made the delivery process easier and has
played an important role to improve the efficiency in for the suppliers and both Coles
(Mangan, Lalwani & Lalwani, 2016). After completion of this strategy, the company has
earned $1356 million, where the estimated target was $244 million (Wesfarmers.com.au,
2018). The growth rate was 16.3 percent compared to previous years.
On the other hand, it has also identified that at the end of the year the company has
taken initiative to improve he sore network for providing better service to the customers. It
has also decided to provide better training to its employees. After adopting these strategies,
the covered supermarket area of the company has increased 1.9 percent (Mitra & Datta,
2014). This can be considered as the biggest achievement of the company. In the same year,
the operating revenue of the company was $58.1 billion, which is 5.8 % higher than the
previous year (Laari et al., 2016). Another way the study has highlighted the cash flow of the
company, which is very influencing part in supply chain management. It has been identified
in this study that the cash flow of the company in this same year was $3641 million, which is
24.8% of the total business revenue (Wesfarmers.com.au, 2018).

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Analyse the issues which have been faced by the organization
After analysing the supply chain process of the company, it has been identified that
although it has faced various development after introducing the supply chain strategy, there
are few challenges which are affecting the overall performance of the company. The
company has grabbed the attention of a large number of customers by providing good quality
of products in lower ranges (Singla, 2015). However, the company is facing the challenges
regarding its poor quality of raw material. The study has highlighted the supply chain of
Wesfarmers, where it has identified the rate of child labour in this organization has increased.
Therefore this can be said that due to increasing rate of child labour in the company, overall
performance is being hampered. Due to lack of professionally skilled employee, the supply
chain management practices got hampered (Monczka et al., 2015). Transportation is an
important part of supply chain management. Therefore, due to lack of proper maintenance of
transportation tools, the company is facing the issues.
As stated by Wisner, Tan & Leong (2014), the company has tried to increase its
customer base. Therefore it has tried to grab the attention of a large number of customers. As
its result, by developing its business in the urban areas, it has also tried to develop its
business in rural areas (Mangan, Lalwani & Lalwani, 2016). This has become an important
challenge for the company because in every places the transportation charges are not same.
As its result, the prices of the products get changed. As its result, the company faces the
issues for providing its products in same ranges. It can be said that the company has also
faced the problem due to delivering the goods in large volume. Although the company has
introduced effective supply chain strategies, but due to lack of proper monitoring, it is facing
many challenges.
In this study, it has been identified that the company named Wesfarmers has faced the
challenges due to improper communication in the workplace. It has been identified that the

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store network systems are not being maintained in this organization. On the other hand, the
company has also introduced various technology in the organization. In order to bring the
changes in organization, the company has recruited new employees, with IT knowledge
(Brandenburg et al., 2014). This has created the conflict in the organization. The old
employees who were using traditional technologies are not being able to deal with this
situation (Wisner, Tan & Leong, 2014). As its result, employee conflicts are affecting the
overall supply chain process in the organization (Mangan, Lalwani & Lalwani, 2016).
Conclusion and recommendation
In this study, it has been identified that supply chain management has the higher level
of impact on organizational development. This can be said that by following this process, the
organization will be able to manage the rate of profitability by increasing its customer base.
The supply chain elements have been highlighted in this study which is the main influencing
factor. In the case of analysing the supply chain issue of Wesfarmers, this has been identified
that the company is facing the issue regarding transportation cost and improper management
of the plan. It has also been mentioned in this study that due to lack of skilled employees, the
initiatives of the company are getting hampered. Therefore, this can be suggested that if the
organization can provide training to its employees, it will be able to train its employees with
modern technologies. This will also help the old employees to co-operate with the new
employees. As its result, the overall performance of the company gets influenced.
On the other hand, the major issue which has been in this study is, the company
named Wesfarmers have appointed child labour in the workplace. The higher authority is not
even aware of this situation. Therefore the HR department of the company needs to be more
effective in the case monitoring these types of situations. As the transportation cost of the
company is different in different places, therefore it needs to manage the manufacturing cost

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or should focus on establishing the outlets of those areas, where the transportation cost is
high. This will help the organization in order to reduce the pressure of excessive tax. By
following these, the organization will be able to manage the difficult situation faced by it
regarding supply chain management.

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References
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