MGT233 Retail SCM: An Analysis of Kmart's Product Supply Chains

This report provides an analysis of Kmart Australia's retail supply chain management, focusing on two product categories: electricals and clothing. It examines supply chain factors such as suppliers and transportation, highlighting the differences in supply chain processes between the demand-oriented clothing department and the supply-oriented electrical products. The report discusses Kmart's lean supply chain approach, direct sourcing, and shipping consolidation efforts. It also touches upon the use of technology like transportation management software and Trade Matrix supply-chain management software. The report concludes with recommendations for Kmart to enhance its global competitiveness and fight against international brands, suggesting the company has sufficient opportunities to initiate themselves into the worldwide market. Desklib provides access to similar solved assignments and past papers for students.

MGT233 Retail Supply Chain
Management –Semester 2, 2018

TABLE OF CONTENTS
Introduction................................................................................................................................3
Product.......................................................................................................................................3
2 Categories of product..........................................................................................................3
Electricals...........................................................................................................................3
Clothing..............................................................................................................................3
Supply chain factors for selected categories of product.........................................................3
Suppliers.............................................................................................................................3
Transportation....................................................................................................................3
Difference in supply chain process........................................................................................3
Conclusion..................................................................................................................................3
References..................................................................................................................................4

INTRODUCTION
Kmart Australia limited is known as a subsidiary corporation of Wesfarmers. In its primary
phase Company is operating more than 200 stores together in New Zealand and Australia.
Central headquarter of the company is located in Mulgrave, Melbourne. In the United States,
the store was built out with the mutual efforts of S.S Kresge and G.J Coles and Coy Limited
Company.
PRODUCT
2 Categories of product
Electricals
Kmart Corporation is dealing with immense brands such as Proscan, RCA, Seiki, and LG for
providing electronic products. They supply a huge variety of sizes, flexibility, and on the
whole quality of the product is the feature that inspires the peoples to think regarding the
purchasing of the electrical product (Stow ell, and Stowell, 2017).
Clothing
Kmart organization provides a huge variety of clothing that includes the entire article that
people require to make a stylish and impressive wardrobe. It provides all kinds of attire from
classic pieces to everything people need to do up their closet. Kmart presents a stunning
collection of men’s, women’s, and children fashion clothes variety, to match their
expectations and choice as well it fulfils the demands for every occasion. Moreover, with
clothing, it provides various types to accessories and jewellery to make a complete look that
help to shine stunningly on any occasion. ( Farris, Shames, and Mitchell, 2017.) Kmart
clothes offer fashionable clothes to keep their wardrobe always ready for any occasion or
event on their calendar.
Supply chain factors for selected categories of product
Suppliers
Kmart has set up an inclined supply chain system, mutually throughout direct sources, in
which the company has made easy delivery of products with the important supply chain cost
savings. In 2011 the decision about the merger of its Melbourne distribution process was
made according to the in agreement with supplier Dematic. Major suppliers of clothing
products of company is Asian countries to ensure cheap cost. Apart from this, Branded

clothes are supplied from Adam Levine, Basic editions, Everlast Sport, Hanes, Jaclyn Smith,
Joe Boxer, Signature By Levi Strauss & Co. Further major suppliers of electric products are
supplied from great brands like RCA, Seiki, LG, and Proscan.
They examined the variety of equipment practice decision, in addition to a whole assessment
connected to cross-belt categorization. As per the organizational structure, the technology
was properly suitable (Mota, 2015).
Dematic’s organization Director Software recognizes that which shop and dealer have packed
up the products that are intended for, tracking it in expectation of attaining the suitable lane
of the store (Ross, 2015).
Transportation
For increasing the efficiency presently, the company has originated a shipping consolidation
for better transports. They have initiated to provide consistent shipping carton sizes to attain
effectiveness in the delivery of products. Well-Organized packs and pick services for easy
carrying and delivery of the products are included in its competitive strategy (Logistics
Bureau, 2017). On the global basis, they are continually increasing their SCM, for the
smooth the progress of a cross-docking agreement in Brisbane Sydney, Melbourne & Perth.
Furthermore, by it’s the supply chain it originates the major cost constituent of a corporations
profit which is generally, 55-85% of the sales. It includes two important basics such as
strategic logistics and strategic sourcing (Harris, 2015). These fundamentals include the flow
in series, business process, and evaluation to recognize, plan, work out, purchase, transport,
storehouse, deliver, and distribute equipment and facilities to diverse consumers. Most
importantly, the supply chain integrates all decisions, actions, and behaviours on a minimum-
whole -cost life cycle as of raw materials to end-user (Brown, 2016) (Lambert, 2008).
Transportation activities of both the product segments is managed by transportation-
management software, supported by customized version of Trade Matrix supply-chain
management software. However, company is required to enhance their safety norms as their
previous transportation system had caused severe injuries.
The difference in the supply chain process
Clothing department has a demand-oriented supply chain due to the constant change in
fashion trends in the market. On the other hand in electrical products, the supply chain is
supply oriented because it caters to the constant requirement of homogenized goods. Further,
supply chain, manufacture and allocation decisions are taken on the basis of long-term

predictions, because demand is constant. Through Demand Solutions’ extremely precise
forecasting algorithms and lively time-phased substitute tactics for attire supply chain
organization, clothing marketers know how to decrease inventory, get better service levels,
phase out outdated styles and appearance, and commence new products (Kmart, 2018).
Difference between clothing products and electrical supply chain process
For clothing, distribution cost of bulk transportation is low, and moreover it decreases route-
trade volume and mileage, in contrast with electrical products they are heavy and large in
sizes, therefore, increases the cost of transportation (Varley, 2014).
Clothes can be directly purchased from producers or manufacturers, and when it comes to the
electronic product than company wish to buy from the wholesalers in bulk.
Cross-docking operations are done to reduce the need for warehouse real-estate and
resources for clothing, on the other hand, electronic products are much expensive and
sophisticated so, care must be taken, and thus, they require a place to store till route-trade
volume and mileage supplying (Castle, 2015).
The fashion of the attires is kept changing so it can’t be stocked in the huge quantity, whereas
electronic products are consumed for a long period and can be stored for more time.
Clothing sectors of the company operate under Vendor-managed inventory programs whereas
electronic industry operates under semiconductor industry programme.
CONCLUSION
The following statements are connected with the supply chain organization of Kmart which is
a subsidiary of Wesfarmers. The corporation has achieved supply chain effectiveness
throughout a lean supply chain approach, and they mutually rise in direct sourcing. Moreover,
it assisted in distributing a striking supply chain cost investments. Recently it has originated
a shipping consolidation for enhanced transfer to enlarge the efficiency as a whole However;
it is suggested to generate an appropriate strategy to fight against the worldwide brands.
Moreover, the company has sufficient opportunities to initiate themselves into the worldwide
market.

REFERENCES
Castle, J., 2015. Where did you get that outfit?: The real cost of clothing-who makes your
clothes and how much are they paid?. Journal of the Home Economics Institute of
Australia, 22(1), p.46.
Farris, P.W., Shames, E.R. and Mitchell, J., 2017. Levi's at Wal-Mart?. Darden Business
Publishing Cases, pp.1-24.
Kmart, 2018. Shop internationally at Kmart (Online). Available from <
https://www.kmart.com/en_us/international-landing.html>. [Accessed on 10 October 2018]
Logistics Bureau, 2017. How Supply Chain Strategy Misalignment is Killing Kmart USA
(Online). Available from <https://www.logisticsbureau.com/how-supply-chain-strategy-
misalignment-is-killing-kmart-usa/>. [Accessed on 10 October 2018]
Mota, B., Gomes, M.I., Carvalho, A. and Barbosa-Povoa, A.P., 2015. Towards supply chain
sustainability: economic, environmental and social design and planning. Journal of Cleaner
Production, 105, pp.14-27.
Ross, D.F., 2015. Distribution Planning and control: managing in the era of supply chain
management. Springer.
Stowell, D.P. and Stowell, P., 2017. Kmart, Sears, and ESL: How a Hedge Fund Became One
of the World's Largest Retailers. Kellogg School of Management Cases, pp.1-22.
Varley, R., 2014. Retail product management: buying and merchandising. Routledge.