Londis Supply Chain Management

This report is a case study analyzing the strategic supply chain management of Londis, a convenience store franchise in the UK. It examines Londis's current operations model, highlighting its strengths and weaknesses. The report compares Londis's strategy to established supply chain models like lean and agile approaches, concluding that Londis utilizes an agile strategy to compete effectively against larger retailers. The study emphasizes the importance of strategic decision-making in supply chain management and the role of collaboration with partners like Budgens. The report includes a literature review referencing various authors and their contributions to the field of supply chain management. Overall, the report demonstrates how Londis's agile supply chain strategy contributes to its success in a dynamic and competitive market.

STRATEGIC SUPPLY CHAIN
MANAGEMENT

ABSTRACT
Supply chain is one of the most important concerns for any organization. It is the best
way through which firms can effectively cover required market area and also set the
availability of products at the particular location. Further, it is being determined that for any
company pursuing global growth today, supply chain is becoming important for competitive
advantage. In this regard, the present study is based on the case study of Londis which is
mainly a convenience stores franchises operating in UK. Moreover, study also analyses the
strategic role of Londis within its supply chain and assesses its operation in terms of its
supply chain strategy. Convenient store of Londis supply chain management strives to control
the product quality as well as their inventory level, time and expenses. This market is facing a
profound change within their area of field. In this, consumers are more demanding and the
competition is increasing on rapid pace.
The total business operation of Londis is very similar to the group of Premier and
family shopper network. For this, they have developed their supply chain strategy on the
basis of their business operations. There are mainly three types of supply chain strategy i.e.
the lean supply chain, agile supply chain and Leagile supply chain strategy. Londis stores all
the goods and services of different retailers within their warehouse. From these warehouses
the total products are transferring to the main store location by the central hub. This is the
very smooth process followed by Londis and helps in ensuring smooth running of business.
Further, this study also concludes that Londis follows agility approach through which they
are able to compete against the giant retail stores of UK. They serve all their business
operations as a premier and family shopper network.

TABLE OF CONTENTS
CHAPTER 1...............................................................................................................................1
1.1 Background......................................................................................................................1
1.2 Introduction to supply chain management and logistics..................................................1
1.3 Introduction to Londis......................................................................................................2
CHAPTER 2...............................................................................................................................3
2.1 Londis Current SCM operations model...........................................................................3
2.2 Pros and cons of current model........................................................................................4
CHAPTER 3...............................................................................................................................5
3.1 Comparison of Londis supply chain strategy against a comprehensive Literature
Review....................................................................................................................................5
3.2 Conclusions......................................................................................................................8
CHAPTER 4...............................................................................................................................9
REFERENCES...........................................................................................................................9

CHAPTER 1
1.1 Background
The global landscape has changed dramatically as strategic supply chain management
has established itself as the authority on creating value and achieving higher competitive
advantage from their supply chain management process. This process is becoming more
challenging and critical to the bottom line due to shorter economic cycles, more frequent
natural disasters and higher costs in low cost countries. Further, it is being determined that for
any company pursuing global growth today, supply chain is becoming important for
competitive advantage (Mentzer, Myers and Stank, 2006). In this regard, the present study is
based on the case study of Londis which is mainly a convenience stores franchises operating
in UK. Moreover, study also analyses the strategic role of Londis within its supply chain and
assesses its operation in terms of its supply chain strategy.
1.2 Introduction to supply chain management and logistics
Supply chain is one of the most important concerns for any organization. It is the best
way through which firms can effectively cover required market area and also set the
availability of products at the particular location. Londis became a part of Booker group in
the year 2015. The company was established in the year 1959 by a group of progressive
independent retail grocers (Bååth, 2008). Now they are providing value added services to
their customers and attract them on a large scale. The main aim behind establishing company
is to develop a fully operational delivered wholesale company. The whole firm is jointly
owned by different retailers which they serve. The main objective of the company is to serve
best marketing, store development, purchasing, IT and supply chain support. It also allows
different firms to grow their businesses and secure their futures in today’s rapidly expanding
convenience market.
Convenient store of Londis supply chain management strives to control the product
quality as well as their inventory level, time and expenses. This market is facing a profound
change within their area of field. In this, consumers are more demanding and the competition
is increasing on rapid pace (Shah, 2009). Booker is one of the leading food wholesalers of
UK and they are committed to grow the Londis and Budgens brands. Supply chain is the total
network of facilities and distribution options. It mainly ensures reaching right product at right
place at right time as well (Berman, 2007).
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1.3 Introduction to Londis
In this regard, the present study is based on the case study of Londis. It is chain of
convenience stores franchises operating in UK and serve high class services to their
customers from several different fields as well. The name Londis is a contraction of “London
District stores” which is a kind of different departmental stores. They mainly work with in a
partnership with independent convenience retailers. Londis is a retail chain of almost 1,630
convenience stores. It helps in growing sales as well as maximising profitability as well.
Further, the present study is based on proper evaluation of a supply chain organization. It is a
part of supply network and helps in attaining most suitable results (Giunipero, 2009).
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CHAPTER 2
2.1 Londis Current SCM operations model
Supply chain management basically operates in three levels i.e. strategic, tactical and
operational level. At the level of strategic supply chain, management team of company makes
high level of strategic supply chain decisions (Coyle and et.al, 2008). Within the supply chain
of Londis they must take decisions that are relevant to the whole organization. This whole
supply chain must reflect the overall corporate strategy which the organization is following.
Londis is a retail chain of almost 1,630 convenience stores and on the other hand,
Budgens is a franchised chain of different grocery stores. Booker the UK's biggest cash-and-
carry operator plans to develop both these stores alongside its retail brands premier and
family shopper as well (Sople, 2000). Their supply chain will be used to deliver various items
and goods to Booker retail customers and improving utilization. Basically, the company
wants to retain their customers by maintaining their quality of services.
They have set a clear supply chain strategy with differentiated service offerings. The main
concern of company is to provide different services to their customers so that they can easily
enhance their sales as well as profit margin. In addition to this, it can be determine that
delivery is the main term of service and it is essential for companies to optimize the balance
of cost (Delfmann, 2007). Londis have set a trend as their strategic role in which they can
determine the logistics for fast moving consumer goods and retail. Within this trend, they
need to enable appropriate collaboration between all their partners such as Budgens. It
requires proper collaboration for their appropriate supply chain. In this, they need to involve
vendors, production plants, transportation and retail as well. Within this area of field it can be
determine that retail supply chain covers up the major issues such as risk management,
response and lead-time (Shah, 2009).
Further, company need to set best strategies through which they can identify quick wins
and potential improvements. Some of the most commons steps are follows:
• Aligning the supply chain with whole business strategy of company
• The core strategic vision
• Use of supply chain to compete
• Key elements of strategic role of supply chain
• Test of a good supply chain strategy
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2.2 Pros and cons of current model
There is a main role of strategy evaluation within the supply chain of organization. With the
current supply chain model of Londis there are some pros and cons which are still available
such as:
Pros
Supply chain strategy of Londis mainly results in value creation for the organization
and maintains their higher market share (Giunipero, 2009). It is quite essential for the
company to understand their business strategy and decide how they compete with other
brands as well. In this way, it can be determined that Londis can select best supply chain
strategy. Strategic role of Londis can be presented by the implementation plan. Under this,
supply chain strategy is directly tied with the business strategy. The whole development of
implementation plan should include several steps under which all the activities must be
briefed out. In addition to this, roles and responsibilities as well as a corresponding timeline
and performance metrics need to be identified. In addition to this, efficient supply
management of Londis helps them in running out the tangible business and sharp focus on
revenue growth, better asset utilization as well as cost reduction.
The company is quite efficient in performing their role and maintain appropriate
supply chain of their firm (Rushton and Walker, 2007). In this way, it can be determine that
they can easily provide value added services to their customers and maintain their profit
margin as well as sales. Londis need to assess its business operations in terms of supply chain
strategy. This can be defined as a critical backbone of business organizations today. They
mainly serve their business operations in different departments.
The total business operation of Londis is very similar to the group of Premier and
family shopper network. For this, they have developed their supply chain strategy on the
basis of their business operations. In this, the whole layout of the company has been set with
the fresh goods and grocery products display (Li, 2007). The store has been set within the
convenient location so that people can easily reach out to them. The whole business
operations are quite smooth and they can easily maintain these operations on the basis of their
set strategy. The whole premier and family shopper network presents the ambience in which
more number of customers is attracted towards it. They totally owned on a franchise based in
which they use to present different outlets of different retailers as well. In addition to this, the
total store is controlled by grocer-owned wholesaler ADM Londis Plc. An operation manager
is handling all the queries regarding the supply chain process of Londis. Different store
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managers give their different rating to this store and keep their concern on the top shop as
well.
Cons
While delegating their responsibilities it is quite essential for company to establish
sub team in order to sphere the execution and provide project management responsibilities. It
is the best way through which company can easily resolve any type of issues and maintain
their track status as well.
Managing risk is one of the major issues assessed in their supply chain operational
model. Due to the, increasing complexity is one of the major issue that continuous to increase
the number of ways. Within the supply chain process of Londis it has been founded that
company needs to go through the greater quality with faster and efficient ways to beat the
competitors. In this context it can be determine that supply chain operational model of Londis
includes the whole process related to the material flows, information flows as well as
financial flows. In case of having issues in the overall process the information and financial
flows might get hampered. It is the main issue which might leads to decrease the overall
market share of company. Further, the true integration as well as customer management is not
defined appropriately.
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CHAPTER 3
3.1 Comparison of Londis supply chain strategy against a comprehensive Literature Review
According to Mentzer, Myers and Stank (2006) supply chain management is a
challenging concept as well as critical success factor for today’s business. It helps the
companies in attaining higher competitive advantage as well as maintaining higher profit
margin. As per the importance of supply chain management, most of the companies
nowadays are looking for various ways through which they can improve their performance.
Ross (2013) in his article stated that company can easily specify their profit margin by the
way of selecting best supply chain management strategy. From this statement, it has been
founded that by making partnership with the Budgens, Londis is able to provide high class
services. In addition to this, the total supply chain process is quite authentic and the total
storage of good takes place at the warehouses of company. Different retailers can supply their
products on the warehouse of Londis. According to Munson (2013) the whole supply chain
management process encompasses the planning and management of all the activities involved
in sourcing and procurement. It highly involves total collaboration with the channel partners
and it can be suppliers, third party service providers and customers. However, the sales plan
of Londis is based on the collaboration with suppliers, retailers as well as customers. The
most important asset is customers and it is essential to provide them value added services as
per the needs and demands of all the customers (Rhee and Mehra, 2006). The whole essence
of Londis supply chain management integrates the supply and demand within and across the
companies. The boundaries cover all the conventional retail stores and they can supply their
goods in order to produce it within this store only. According to Plambeck (2012) demand
management is the most important concept which helps the suppliers to understand the
customer’s buying process as well as to build better customer relationship. By identifying the
needs and demands of all the suppliers can easily provide them quality services and goods as
per their needs. Rhee and Mehra (2006) in his study presented the basic four decisions and
activity area which within the integrated supply chain process such as:
 Appropriate configuration of product and network which mainly consist of various
decisions of the main rules of company
 Formation of the product network which involves the warehousing locations and their
capabilities
 Proper product designing and abilities of suppliers as well
 Process optimization and the total inventory level in the cost effective way as well
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Further, companies are required to take appropriate strategic decisions that stay long term
and deal with the high complexity and future risks as well. Poirier (2000) in his study
founded that there are some of the most important criteria which help in determining supply
chain includes:
 Product
 Demand
 Replenishment lead times
 Product life cycle
 Nature of pull based supply chain
One of the most important processes is to go through the nature of business. Londis
provides convenient facilities of their entire customer where they can shop any type of item
from one store (Packowski, 2013). At the time of purchasing there are various factors which
attract them most towards the company. Within this area, it can be determine that the most
crucial factor is maintaining better customer supplier relationship. By going through the
needs of customers Londis can easily provide appropriate services and products to their
customers. According to Munson (2013) there are mainly three types of supply chain strategy
such as:
The lean supply chain strategy: This strategy clearly defines the enhancement of value of
the firm by eliminating of waste. The present strategy is highly focused with the cost
reduction in their total operating process. In this way, most of the companies are using most
basic form of data communication on inventories, delivery plans and fluctuation within the
framework. According to Anderson (2011) within this strategy customers are delivered
supply chain through the low production cost. It helps the company in maintaining their cost
as well as sales and profit margin. There are several firms who are benefited from the lean
strategies. However, most of the time they have been criticised due to the lack in human
integration and being characterised by repetitive manufacturing.
Agile supply chain strategy: This strategy defines the appropriate response to the
business challenges of profiting from rapidly changing global markets. Within this globalized
world companies can continuously go with the high quality, high performance and customer
oriented services (Bååth, 2008). This is the best form of approach through which companies
can is easily supply high quality products as per their customers’ needs and demands. The
main aim of this strategy is to build defence against the competitors and a step forwards
towards the innovation. Moreover Mentzer, Myers and Stank (2006) stated that agility is a
most effective approach which is not only respond towards the changing market condition but
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also exploit several changing opportunities. In context of supply chain management it highly
focused on “responsiveness”. Packowski (2013) stated that it defines the agility of supply
chain as a whole and align the proper network and its business operations within these
dynamic requirements of the customers. It is the most effective process by which company
can measure their success growth and easily determine that how well the relationship
involved in the process can be enhanced. It should be widely accepted and go through the
business growth of company. Further, this strategy is considered to be a most suitable
strategy for business firms.
Leagile supply chain: It can be described as a hybrid of lean and agile supply system
which provides the appropriate advantages from both of these combinations. Poirier (2000) in
study defines that one of the main objective behind this supply chain is to infuse the
competitiveness within an organization in a cost effective manner. It can also be define as an
integrated approach to supply chain design which is mainly focused with the supply chain re-
engineering process.
From the whole above process of different supply chain strategy it has been identified that
lean strategy focuses on the waste elimination and achieving low cost delivery of a stable
product (Delfmann, 2007). On the other hand, agility mainly responds to complexity and
unpredictable changes. Further, from the whole above process it has been founded that
Londis follows agility approach as it helps in seeking out various new and emerging
opportunities. This process helps them in winning strategy for the growth and company can
easily expand their area of sales and profit as well. Booker is the biggest food retailer which
is buying the Budgens and Londis retail brands in Great Britain (Rhee and Mehra, 2006).
Within this deal total supply has been shifted by the changing attributes of British consumers
who increasingly prefer to do smaller trips to convenience stores rather than weekly visit the
town markets. This is the place where customers can get all the required services. The best
supply chain process is followed by Londis through which they have proven to managing the
successful business operations. In addition to this, they are also helping all the independent
retailers to come across and enhance their sales margin. With having this convenience store
different retailers can sell their products to different customers throughout the Great Britain
(Sople, 2000). An appropriate supply chain has been maintained among both the brands
Budgens and Londis. With having proper supply chain in the UK they are able to increase
their scale of working and efficiency. It might leads to resultant in the lower prices and
enables their brand to compete against the rapid expansion of bigger supermarkets operator
into the convenience market as well.
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3.2 Conclusions
From the above report it has been concluded that maintain appropriate supply chain is
the most important concern of any organization. With the help of this, they can smoothly run
their business operations and provide value added services to their customers. Londis stores
all the goods and services of different retailers within their warehouse. From these
warehouses the total products are transferring to the main store location by the central hub.
This is the very smooth process followed by Londis and helps in ensuring smooth running of
business. Further, this study also concludes that Londis follows agility approach through
which they are able to compete against the giant retail stores of UK. They serve all their
business operations as a premier and family shopper network. It has been identified that
strategic development plays a most important role within the supply chain process of Londis.
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