Supply Chain Management: Sainsbury's Case Study

This report provides an overview of Sainsbury, its supply chain, and the link between LB5230 theories and the organization's activities. It also explores sustainability within the value chain.

SUPPLY CHAIN
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of organization............................................................................................................3
Supply chain of organization......................................................................................................4
Link between LB5230 theories and organization's activities......................................................5
Sustainability within value chain................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Supply chain is basically the framework which enables the organizations to handle the
overall flow of goods as well as services beginning from procuring raw material to successfully
delivering it to final users. In short, supply chain provides a well-through network through which
organizations are able to optimize their resources as well as activities for delivering product.
Sainsbury is primarily renowned retail organization being established in 1869 by John James
Sainsbury and headquartered in London, UK. Te main aim of this report is to understand the
supply and value chain of Sainsbury and understand their sustainability.
Thus report gives a brief overview of organization, supply chain of organization, link
between LB5230 theories and organization's activities and sustainability within value chain.
MAIN BODY
Overview of organization
Sainsbury is primarily the well-known and renowned supermarket chain as well as retail
organization which was formed in the year 1869 and has its headquarter in London, United
Kingdom. This organization occupies the second position in terms of the size in retail industry
and thus have its presence across the world. Sainsbury mainly deals in wide range of products
and thus have its subsidiaries in supermarkets, fuel, cafe, banks, energy etc. These subsidiaries of
Sainsbury has enabled them to acquire the large market share and thus has attained competitive
advantage in last few years (Hugos, 2018). The holding company of Sainsbury which is J
Sainsbury plc is mainly splitted into the three divisions which are Sainsbury Supermarket,
Sainsbury bank and the Sainsbury Agros.
In the year 2018, the largest shareholder of Sainsbury is sovereign wealth fund in Qatar
as well as Qatar investment authority and these shareholders have around 21.99% of company's
total share. Sainsbury is mainly listed in London Stock exchange and thus is the major
constituent of FTSE 100 index. This company was first established by John James Sainsbury and
currently it has around 1415 shops which are located in more than 20 countries. Typically,
Sainsbury has around 30000 product lines out of which around 20% are the own-label products.
Their product mainly ranges from food product to toiletries and currently deals in wide range of
services and products. Sainsbury has built upon the heritage of offering the customers with tasty,
healthy as well as safe food and thus their quality as well as prices go hand in hand which helps
the to achieve their strategic goals and objectives. Talking of the revenue, as per the report of

2019 its revenue was estimated around £30,911billion and was £28.456 billion in the year 2018.
This increased ratio shows that since few years, Sainsbury has established its position to a great
extent in market and thus has captured a great market share. This has been possible primarily
due to its employees which are the assets for the company and thus forms the major link between
customers and organization (Christopher, 2016). As of year 2019, there are around 186900
employees in the organization which are spread across the world in different locations. Over few
years, Sainsbury has been in spotlight due to its wide sustainability initiatives as well as projects.
In the year 2018, Sainsbury committed to increase their contribution towards environment and
thus established one stop energy shop which was considered as the most effective strategy for
reducing the energy requirements and making use of the renewable products. As a result of this,
Sainsbury has become the first retailer in UK to sell the PV systems as well as air-source heat
pumps and making use of renewable resources efficiently.
Supply chain of organization
The supply chain of Sainsbury is highly strong as well as powerful and thus is extremely
popular which can be assessed through its smooth and major operational activities. Sainsbury's
supply chain model is basically based on the Six sigma and thus forms an integral part in the
activities of supply chain. The activities of the supply chain of Sainsbury is mainly divided into
the five components and these five components are generally procurement of the raw material,
raw material's processing, movement of the finished goods, distributors and the suppliers. Model
of supply chain of this company is very straightforward yet highly powerful due to the reason it
has expanded its supply chain over a large geographies and left its presence in almost every
country. The main reason behind its powerful and effective supply chain is their adoption of six
sigma which itself is highly efficient tool in delivering world-class services (Copacino, 2019).
Supply chain of Sainsbury generally have six main features which plays an important role
in its operations as well as coordinates the activities of their supply chain. These features are
mainly related to operations as well as activities of Sainsbury. These key features are SCC which
is SCM command center, SMM which is sales as well as marketing center, APS (Advanced
demand as well as supply management), SRM (supplier relationship management), ASM and
CPFR which is collaborative planning, forecasting and replenishment. The main role of SCC
which is command center is to control instructions relating to procurement of the raw material,
finished goods, storage of the raw material, warehousing etc. Next SMM is the point where sales

as well as marketing of the finished goods are decided. This is highly important point as it
decides supply of finished products. Third one which is APS. This point mainly helps in deciding
supply of the raw material in the advance and thus helps to avoid unforeseen circumstances.
Fourth point which is SRM helps Sainsbury to establish a long-lasting relation with suppliers and
this forms the core activity of the company (Mangan and Lalwani, 2016). Supply chain of
Sainsbury contains CPFR which helps to make supply chain cost effective and this helps to
respond to the changing external environment. Lastly ASM helps to make robotic supply chain
by manufacturing the products of high complexity and thus helps Sainsbury to have customized
products.
Link between LB5230 theories and organization's activities
The supply chain of Sainsbury is highly linked to the concepts as well as theories of the
supply chain management which are LB5230 theories.
Supply chain is basically the network between suppliers as well as organizations to
produce as well as distribute the products and services to end users. In short, supply chain
basically represents the steps which organizations take for delivering the products as well as
services to the customers (Bozarth and Handfield, 2019). The supply chain of Sainsbury is highly
imperative and thus their operations are highly diverse and varied to the level that each and every
department has their own operations.
Tangible assets
The tangible assets are mainly those assets which can be seen and touched. These assets
mainly forms the integral part of the company and hence mainly includes physical as well a
financial assets. These are generally known by the name strategic assets as thee have an
important role of play within implementation of the strategy of organization. The main tangible
assets of Sainsbury involves building, machineries, lands as well as equipment. These tangible
assets collectively have the worth around $5 million of Sainsbury. With this, the operation cash
of Sainsbury has been recorded around $80,590 (Fredendall and Hill, 2016).
Value chain analysis
This is the framework which helps the organization to analyze their internal activities and
thus identify the activities which are highly valuable and thus will help to provide competitive
advantage. The value chain generally encompasses two types of activities. The first is primary
activities which are involved in selling as well as producing the products to the end users.

Support activities on the other hand are the activities which helps to facilitate primary activities
and thus stimulates them (Genovese and et.al.,2017).
Primary activities
Inbound logistics
This isn one of the most important primary activity which Sainsbury uses for building
powerful relation with suppliers. The inbound logistics of Sainsbury is highly effective where
they receive as well as store the products from suppliers. For example- the various activities like
receipt of the good at warehouse from suppliers, distribution to various stores, internal handling
forms the inbound logistic of Sainsbury (Dubey and et.al.,2017). In this, ,measures of quality
control are given thorough importance.
Operations
This is the another important primary activity of Sainsbury which helps them to achieve
competitive advantage. The operations of Sainsbury includes machining, packing, testing,
maintenance etc which eventually helps them to deliver high quality products to the customers.
The major operations which are carried on regular basis are shelf demonstration, inventory
management, stock management etc which are conducted at different locations where Sainsbury
has its presence (Cousins and et.al.,2019).
Secondary activities
Human resource management
This is the most important secondary activity which helps Sainsbury to have a well-
through supply chain and thus renders the various primary activities. Sainsbury generally have an
effective human resource which are highly skilled as well as trained to handle the various aspects
of supply chain. These skilled labour helps Sainsbury to reduce the production cost along with
ensuring smooth delivery of products to customers. Sainsbury's heavy dependence on the skills
and talent of employees helps the company to enhance the effectiveness of their supply chain
(Rajeev and et.al.,2017).
Technology department
Sainsbury has a separate technology department which are highly involved in integrating
the activities of supply chain with technological support. Integration of the technology within
production, distribution departments is highly crucial in order to ensure the effective
management of goods to end users. The technology department of Sainsbury is divide into two

divisions which are product technology and process technology. One of the well-known
technology which is being used by Sainsbury in its supply chain is RFID. This helps them to
track the order of their customers and thus helps to ensure smooth delivery (Hugos, 2018).
Sustainability within value chain
Sustainability is basically all about meeting needs as well demands of present society
without compromising about quality and ethicality. In short, sustainability is working towards
the interest of stakeholders by contributing towards the environment. Sustainability in value
chain has formed an essential phenomena which organizations ion this modern era are leveraging
in their operations (Christopher, 2016). The sustainability in the value chain basically relates to
optimizing the logistics network and supply chain to reduce environmental pollution, waste and
hence the risk. Sainsbury have incorporated sustainability in its supply chain in highly effective
manner and thus have provided the customers with easy pickup which needs less time of
transport.
Sainsbury has strategized upon warehouse management for carrying sustainability
program. Due to its operations in large number of countries, large amount of raw material as well
as finished goods are to be transported overseas. Thus, in this changing scenario of increased
awareness of people for environment, Sainsbury has shifted its focus to electric vehicles. The
main reason of this shift is to reduce the emission of carbon in ecosystem. Thus, while
transporting its finished goods to the end users, the function is mainly carried out in electric
vehicles. This has not only helped them to reduce environmental pollution but has also shrunken
transportation times. Besides this, while procuring the raw material, fuel efficient trucks are
being used for maintaining sustainability. Along with this, Sainsbury has not only concentrated
its efforts on relying upon electric vehicles but is making the effective use of six sigma in order
to reduce waste during production. While manufacturing the products, Sainsbury always ensures
to make the effective utilization of renewable resources and thus make their process optimized
and energy efficient. Through the help of Six sigma, production department reduces their
production cost as well as make use of all available resource without decreasing quality (Bozarth
and Handfield, 2019).

CONCLUSION
It has been summarized that supply chain plays an important role in the operations of an
organization and thus helps to effectively build their image in market. Supply chain is one of the
major determining factor in success of firms and its proper optimization helps to attain
competitive advantage. Supply chain has number of facets which have their own role in different
department. From procurement to effective delivery, supply chain has enabled organizations to
provide quality services and products to the customers. Value chain analysis is the framework
which helps organizations to assess their internal activities and thus gain competitive advantage.
Sustainability within value chain plays a crucial role through which organizations leverage
sustainable practices within their value chain.

REFERENCES
Books & Journals
Bozarth, C.C. and Handfield, R.B., 2019. Operations and Supply Chain Management.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Copacino, W.C., 2019. Supply chain management: The basics and beyond. Routledge.
Cousins, P.D and et.al.,2019. Investigating green supply chain management practices and
performance. International Journal of Operations & Production Management.
Dubey, R and et.al.,2017. Sustainable supply chain management: framework and further
research directions. Journal of Cleaner Production.142. pp.1119-1130.
Fredendall, L.D. and Hill, E., 2016. Basics of supply chain management. CRC Press.
Genovese, A and et.al.,2017. Sustainable supply chain management and the transition towards a
circular economy: Evidence and some applications. Omega.66. pp.344-357.
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Mangan, J. and Lalwani, C.L., 2016. Global logistics and supply chain management. John Wiley
& Sons.
Rajeev, A and et.al.,2017. Evolution of sustainability in supply chain management: A literature
review. Journal of Cleaner Production.162. pp.299-314.