Strategic Supply Chain Management of JB Hi-Fi: An Analysis

This report provides a comprehensive analysis of JB Hi-Fi's strategic supply chain management. It begins with an executive summary and an introduction to the company, its products, and its customers. The report then delves into the specifics of JB Hi-Fi's supply chain, examining its complexity, risk management strategies, and approaches to agility and responsiveness. It explores the company's supply chain integration, including its design and platform framework. Furthermore, the report offers recommendations for improving JB Hi-Fi's supply chain operations, concluding with a summary of key findings. The analysis covers various aspects such as supply chain processes, real-time tracking systems, and the company's ability to manage risks like production problems and shifts in customer demand. The report also highlights the importance of lead-times and the company's customer-driven approach to supply chain management.

Running Head: Strategic Supply Chain Management 1
Supply Chain Management of JB HI-FI

Strategic Supply Chain Management 2
Executive Summary
Supply chain management is the crucial part of the business today. Loyal customers are
key factor for the success of the business. If the customers are getting quality products and
services on time then they are always ready to spend more money. Creating and providing value
to the customers is not an easy task for the company. For this manner, supply chain is the best
way to meet the requirements of the customers. This report will discuss about the process of
supply chain used by JB HI-FI. Report will also focus on the supply chain complexity and risk
management process used by the company in the business operations. Further, supply chain
integration including design of supply chain integration and platform framework developed by
the company will also be discussed in the report. At last, some recommendations will also be
provided for JB H-FI in order to improve the process of supply chain in the business operations.

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Contents
Executive Summary.........................................................................................................................2
1. Introduction..............................................................................................................................4
1.1 Products and customers of JB HI-FI......................................................................................4
2. Supply chain of JB Hi-FI..........................................................................................................5
3. Supply chain complexity..........................................................................................................6
4. Supply chain risk management.................................................................................................6
5. Supply chain agility and responsiveness..................................................................................7
6. Supply chain integration...........................................................................................................8
6.1 Design of integrated supply chain..........................................................................................9
6.2 Platform framework.............................................................................................................10
7. Recommendations..................................................................................................................11
8. Conclusion..............................................................................................................................12
References......................................................................................................................................13
Appendix 1- Supply chain agility and responsiveness..................................................................15
Appendix 2- Supply chain design for JB Hi-FI.............................................................................15
List of figures
Figure 1: Supply Chain of JB HI-FI................................................................................................5
Figure 2: Structure of supply chain.................................................................................................9

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1. Introduction
In present time, supply chain management is the crucial part of the business operations of
any organization. There are various organizations that are using the process of supply chain
management to stay competitive in the market. It can be observed that market has strong
competition in terms of products and services. Companies are adopting supply chain
management in their business operations to achieve effective competitive advantage. Aim of
each company is to provide innovative products and quality services to the customers at very low
prices (Assey, 2012). Customers also want the desired products as quick as possible. This is the
basis, supply chain management are the crucial part for the companies. Supply chain is well
thought-out as the important notion of administration and now lots of big and established
companies i.e. Nike, Nokia, Dell, Zara and Gamble etc are implementing the concept of supply
chain in the business operations. The business is basically related to the supply of the wares from
various steps such as raw material to end consumers (Barney, 2012). This report describes the
role and importance of the supply chain activities in a company. In this report, company JB HI-
FI is selected. Objective of this report is to critically evaluate the supply chain management i.e.
supply chain complexity, risk management, agility and responsiveness and integration. Supply
chain practices of JB HI-FI are helpful for the company to achieve its organizational goals and
objectives.
1.1 Products and customers of JB HI-FI
Company has wide range of products for the customers. JB HI-FI is providing various
electronic products and services to its customers including Video games, DVDs, CDs and Blu
ray. The company has characterized its products into various groups and sections. Company sells
its products by the various brands and stores. The company is basically operating its business in
Australia and headquarter of the company is in Melbourne Australia. JB Hi-FI is providing range
of electronic products to the consumers along with very affordable prices. Target customers of
the company are medium income people who seek to spend their money on the best quality
products. It is observed that the customers of JB Hi-FI are shifting towards pother brands for the
products and this condition is creating tough competition for the company (JB HI-FI, 2011).

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2. Supply chain of JB Hi-FI
JB Hi-FI is the popular retail company in Australia in terms of electronic products. The
company is enjoying competitive advantage in the market by setting supply chain practices in the
industry procedures. There are various chances for JB Hi-FI with the successful supply chain
process. If the firm seeks for the growth and success in the business then it has to manage its
supply chain effectively. The strategy of JB Hi-FI is very simple i.e. offer best quality electronic
products at the affordable cost. For this manner, company has spent amount of money and time
to expand and manage the supply chain practices. A number of aspects such as supply chain in
the business and life cycle of the products which are important for the success of the business. JB
Hi-FI is also focused on several effective processes like elimination of redundant products and
useless procedures and using new resources for business etc. These operations are helpful in
improving the efficiency of the supply chain management (Beske & Seuring, 2014).
Figure 1: Supply Chain of JB HI-FI
(Source: Cetinkaya, 2011)
Based on the above figure, the supply chain process of JB Hi-FI can be analyzed. The
company has developed a pattern for the efficient supply chain process. With the supply chain
process, company is able to achieve flexibility in the market in terms of supply of products and
goods. In the process of supply chain, company is using real time tracking system which is
helpful in the decision making process. With the help of real time tracking system, company is
able to access relevant information quickly. With the help of supply chain networks, company is
able to operate in the faster speed and deliver the products at the right time. Along with this,
company is able to minimize the cost incurred in the logistics management. Company has also

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appointed some agents in the foreign market for the supply and procurement of the goods and
products on time (Chopra & Meindl, 2013).
Further, for the supply of goods and products, there are basic four functions in the
company i.e. customer service, communication, store-in company and stock-up review. JB Hi-FI
has effective management on the reserves so that supply of the products and raw material can be
done on time. The products in company are first stocked up in the big stockroom and after that
they are recognized by the unique label. Labels on each product are helpful to deliver the
products from one place to another (Cannella, 2010).
3. Supply chain complexity
The process of supply chain management has various complexities within its internal
structure. There is the need to deal with this issue by the management of the company at very
large scale. The complexities of the supply chain can be considered as one of the major challenge
in effective planning process of JB Hi-FI. The company can face issues while managing the
supply chain operations (Arndt, 2008). JB Hi-FI is one of the companies that face such kind of
issues. The company has its operations at the global level and deals with the various electronic
products. Diversification is the nature of JB Hi-FI and the company has to face the issues and
complexities in terms of information distribution. Although company has achieved success in the
supply chain management so it is very positive with its business operations, but still there are
some complexities in the procedure of supply chain. When importing the goods from other
countries, the company has to get agreement from the Australian government in the printed
system. The procedure of taking authorization is very complex and it takes lots of time. Along
with this, company has to take care of the products which are imported from the foreign market.
It increased storage cost of the company. Company is focused on the selling of varieties of the
products but there is no any effective program for the safety of the products. Products in JB Hi-
FI are basically maintained by the normal staffing but they need proper supply chain for the
security purpose (Rashid & Aslam, 2012).
4. Supply chain risk management
The process of supply chain management is useful in organizing various in the business
processes. There can be various risks when managing the business in the strong competitive

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market. In current time, companies are facing a variety of hazard in day-to-day operations. JB
Hi-FI is also facing some threats because of some causes i.e. problems in the production, shift in
the demand of the customers, problems with the customers, cyber security, shortage of
warehouse and unexpected delay in the delivery of the products etc. These are reasons can be the
reason of stoppage in the customer shipment. To deal with these risks, JB Hi-FI has implemented
the process of supply chain management. The company is focused on various programs to focus
on those areas where the possibilities of risks are very high. Along with this, there can be risks in
terms of social, safety and environment compliance. There can be business risk which can be
managed effectively by the supply chain management. The business risk in JB Hi-FI is managed
by the expense control. With the expense control system, objective of the company is to set out
the expense budget of the business operations. This approach is focused on minimizing the risk
of fall in sales and address them effectively (Miti, 2012).
Further, it is very crucial for the company to reduce the hazard in the business areas
where is the need of supply chain process. There are various factors which are not in control of
the company and those components are price of labor and energy, natural tragedy and political
disturbance in the operating market. But there are also some factors such as counting, production
and ship of the wares which can be managed by the company. For this manner, all the goods and
products are examined by the company under the business application (Stefan & Roger, 2014).
5. Supply chain agility and responsiveness
Agility and responsiveness in the supply chain is the business-wide capability that holds
information systems, organizational structures, mindsets and logistics processes in the business.
The main characteristics of an agile company are flexibility. The idea of agility in terms of
supply chain management basically focuses around responsiveness. The notion of ‘agile supply
chain’ includes quick response, demand driven supply chains, more flexible, describe shorter
high level of inventory and forecast driven. The agile supply chains are driven by the information
such as information sharing between the business and market data in the supply chain. In the
process of agile supply chain, availability of information allows the company to become more
responsive towards the changes in the demands in the market (Cetinkaya, 2011).

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In case of JB Hi-FI, company has customer-driven process. The company has ability to
respond towards the fast changes in the demand of the customers by the lead time reduction. JB
Hi-FI has effective supply chain process but the customers’ demands create a significant impact
on the supply chain of the company. In the retail industry, there is the shift and that is placing
pressure on the company to increase number of suppliers as the customers’ demands are bigger
and those are changing more frequently. Suppliers are under pressure to be more flexible and
responsive to changing demand. To become more responsive, JB Hi-FI has adopted lead-times
system in the supply chain. There are three critical lead-times used by JB Hi-FI to compete
successfully in the market (Qi, Zhao & Sheu, 2011).
Time to market-
This is about identifying business opportunity in the market and using it into the product
and service to operate in the market. In the short life-cycle markets, company is able to identify
the current trends quickly and use them into products in the shortest possible time for achieving
success. Company identifies significant sales opportunities that probably will not be repeated.
Times to serve-
In this step, company is focused on capturing the order of the customers and delivers the
product to the customers. Objective by this step is to enhance the satisfaction level of the
customers.
Time to react-
This is the last step of the agility supply chain of JB Hi-FI. This is related to adjusting the
outcome of the business in response to the unstable demand of the customers. Ideally, the
company wants to be able to meet the requirements of the customers in terms of products.
Company wants to provide the products at the time and place where the customers need them
(Wisner, 2011) (Appendix 1).
6. Supply chain integration
It is analyzed that there are seven main operation procedures in the supply chain process
of JB Hi-FI. Those procedures include order operation, receiving order, clearing operation,

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returning operation, payment operation searching operation and marketing operations. But, it is
observe that there are some problems in the system of the company. The current supply chain is
sometimes unable to meet the objectives of the company and there is the need of development.
For this manner, the idea of integrated supply chain is useful for the company. The integrated
supply chain considers the problem of JB Hi-FI in terms of supply chain process. The company
is facing issues in the supply chain in terms of changing demands of the customers and
implements the integrated supply chain management concepts (Pamela & Pietro, 2011).
6.1 Design of integrated supply chain
Currently, JB Hi-FI is selling electronic retail products to the customers at the affordable
prices. According to the Fischer’s product-based supply chain design strategy, retail products are
the functional products with the predictable and stable demand and long lifecycle so, company
has to focus on the supply chain which is more efficient (Grean & Shaw, 2010). Electronic
products are the innovative products with the instable demand so there is the need to choose the
supply chain which is market-sensitive. So, supply chain design for JB Hi-FI is described in the
table (Appendix 2).
Key objective of JB HI-FI is to become leading company in the retail industry by
providing low cost products to the customers in all over the world. By the process of supply
chain, JB Hi-FI is offering quality products to the customers by managing inventory in the
regular way.
Figure 2: Structure of supply chain

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(Source: JB HI-FI, 2011)
In the given figure, the management of the supply chain in JB Hi-FI is described. In the
integrated supply chain of JB Hi-FI, the management in the supply chain gives order for the
inventory and raw material for the production. For the inventory and sales data, suppliers can use
web technology effectively. Due to the integrated supply chain, company does not spend much
amount of money to manage the inventory of products and goods in the storehouses (Donald &
Stephen, 2014). The integrated supply chain allows the company to manage the acquiring of the
things to fulfill the needs and necessities of the customers. Due to the supply chain, there is the
constant flow of data between the customers and suppliers. Focusing on the entertainment
industry of Australia, the potential market of JB Hi-FI will be profitable along with lots of
potential. The sale of the music system and domestic application has also improved. The
effective supply chain is helpful for the company to achieve competitive advantage in the market
(Ou, Liu, Hung & Yen, 2010).
6.2 Platform framework
The integrated supply chain management would be very effective for JB Hi-FI to
implement effective strategy in the business. The supply chain integration includes four main
factors i.e. customer service of suppliers and retailers, platform building promotion of suppliers
and platform maintenance. Integrated supply chain in JB Hi-FI not only includes the technology

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structure such as software and hardware planning but it also includes services of the customers
provided by the retailers and management of the company along with the development and
application of new functions to ensure quick responses of the company in the changing demand
(Kersten, Blecker & Jahn, 2011).
Building logistics distribution centre-
In JB Hi-FI, logistics centers use automated system and advanced information technology
including automating sorting, automatic transmission and handling system etc. The company is
adopting wireless handhelds terminals, wireless signal transmission technology, bar coding
system and many other hi-tech systems such as display and warehouse transfer. Logistics
distribution centre has GPS tracking device along with the delivery vehicles (Festus &
Xiaoming, 2010).
Shorten the logistics flow-
For the effective and successful supply chain, key strategy of JB Hi-FI is to collaborate
with the suppliers. For this manner, company establishes the demand analysis of the
collaboration with the suppliers. The company establishes the strategy to develop the information
sharing between the suppliers (Schaltegger & Burritt, 2014).
7. Recommendations
The company JB Hi-FI is trustworthy among the customers in terms of innovative
products. For the customers, the company is the most innovative company which is offering the
products at the affordable prices. It is observed that the company is straight forward and fair in
terms its dealing. There is lots of scope for improvement in the process of supply chain of the
company. Here are some recommendations for the company JB Hi-FI to improve the process of
supply chain management. The recommendations are as follows:
 In the process of supply chain, the management of JB Hi-FI should be updated with the
inventory manually on daily basis. This would be helpful in delivering the products at the
accurate time.
 The team of supply chain management in the company should store and update all the
important documents in the proper manner.

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 Further, it is recommended that JB Hi-FI should upgrade the retail link software, analyze
the forecasting methods and communicate to the distribution centers effectively. This
would improve the effectiveness of the current system in JB Hi-FI.
 Various matrices such as stock out levels, forecasting, transportation costs and inventory
costs should be analyzed by the company. This would be helpful for JB Hi-FI to improve
vendor managed inventory program and communication with the suppliers (Muller,
2011).
 The inventory level at the every distribution centre should be analyzed by the company to
analyze how long the inventory will stay in the distribution centre. Along with this, the
company should note that what the causes of high inventory costs are. By this, company
would be able to evaluate various carrying cost of inventory such as storage costs,
handling, taxes and interests, insurance, obsolescence, and damage (Sweeney, 2013).
 At last, company should perform ABC inventory analysis. By this method, inventory at
the suppliers would be analyzed for the potential cost savings in the company.
8. Conclusion
This report basically discusses about the role and importance of supply chain process in
the company JB Hi-FI. With the help of supply chain, employees of the company feel relax as it
is helpful in reducing the pressure in the business. JB Hi-FI is using supply chain management
process for providing best quality products to the customers at the required time. The objective
of the company is to offer electronic products at the affordable prices. For achieving competitive
advantage in the market, JB Hi-FI is focused on the identifying new opportunities in the market.
It is observed by the above analysis that the company has spent big amount and time to develop
the competence of supply chain. For the risk management, company has adopted some activities
such as removal of unnecessary business operations, adaption of IT resources for improving the
efficiency of the supply chain process. For the effective supply chain, it is recommended to JB
Hi-FI that the company should focus towards long term growth and strong position the global
standard by adopting effective strategy. Further, for preventing the failure of supply chain, there
is the need of careful management in the company.