Analyzing Morrisons Supply Chain Management: A Detailed Report

This report provides a detailed analysis of Morrisons' supply chain management, focusing on key areas such as customer service, inventory management, transportation methods including the use of Morrisons Express and third-party logistics (3PLs), warehousing strategies, and capacity management. The report examines how Morrisons utilizes safety stock, reorder levels, and economic order quantity (EOQ) for inventory control, and explores its transportation efficiencies. It also delves into the role of warehousing, the challenges in capacity management, and the strategies that contribute to Morrisons' competitive advantage within the UK supermarket sector. Furthermore, the report introduces relevant logistics and supply chain management concepts and models, analyzes critical issues, and suggests potential improvements to enhance the company's supply chain performance.

SUPPLY CHAIN
MANAGEMENT

Table of Contents
1) INTRODUCTION.......................................................................................................................3
MAIN BODY...................................................................................................................................3
2) Customer Service and Inventory.............................................................................................3
3) Transportation and LSP's.........................................................................................................4
4) Warehousing and capacity.......................................................................................................6
5) Strategy and competitive advantage........................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

1) INTRODUCTION
Morrisons is one of the largest supermarket of UK having. Its headquarter is in Bradford,
UK. It was founded on 1899 by William Morrison. It has a long success history from a bradford
market stall to become the top 4th largest supermarket of UK. The main aim of the Morrisons is
to enable the customer a single stop where they can meet all their needs by offering every
product which they want. It is the biggest seller of food and drink, books, clothing, magazines
and many more. Having a wide scope the supply chain of Morrisons is also very strong. It
operates its transportation facility under the name of Morrisons express.
This report will discuss the concept of supply chain management and its various
associated concepts in the context of Morrisons.
MAIN BODY
2) Customer Service and Inventory
The product of the Morrisons are readily available to their customers because of the good
inventory management practices. This means that the inventory practice of the Morrisons are
adopted and implemented in such a manner that the company has not faced the problem and
situation of shortage of inventory which result in the readily and timely delivery of products to
its customers.
The inventory method used by Morrisons are as follows:
There are various methods used by Morrisons in order to have availability of inventory in its
company. These methods are:
Safety stock:
It is one of the best method of inventory management. As per this method companies kept
some additional inventory in their warehouses which is being used to meet the situation of
emergency (Brunaud and et.al., 2019). This method is generally used by Morrisons where it
keeps some additional inventory in its warehouse which it uses to meet the situation of
emergency. This method enables the company to have availability of stock every-time.
Reorder level (ROL):
As per this method of inventory management and controlling the companies fix a level
which shows that when the inventory will reach at that level then company need to reorder it

(Inegbedion and et.al., 2019). This method is also used by Morrisons in its workplace. As
receiving and issuing the inventory is very common business practice so when the inventory will
reach at that level of mark then it is necessary for the companies to have reordering it. This is one
of the best method of inventory ordering that ensures no shortage of inventory in the company.
Management of stock:
The methods used by Morrisons for the management of stock are as follows:
Economic Order Quantity (EOQ):
It refers to that quantity of stock which is economic to order. This means that EOQ refers
to that ideal quantity of order that will save the company from high inventory cost (Çalışkan,
2020). As per this method it is always important that an ideal quantity of order will be made so
that its cost regarding holding of inventory, shortage cost, order cost will all remain minimum.
Pareto method:
As per this method the 80% results are being generated with 20% of efforts. This is also
known as 80/20 rule. This means that 80% of the sales are being generated with the 20% of the
best efforts and sales of the products (Kuo and Lee, 2019).
However, in case of Morrisons it usually follows the method of EOQ whereby it makes
order of adequate quantity so that it will not face the situation of shortage and its cost will also
remain maintained.
3) Transportation and LSP's
Mode of transportation:
It refers to a way or mode that could lead the companies to deliver the products among
the customers. Transportation in case of supply chain plays an important role in terms of
delivering and making the availability of the product among the customers. There are various
modes of transportation that is used by companies including air, water, road and many others.
However, in case of Morrisons, it run its mode of transportation under the name of Morrisons
Express which enable it to deliver its product in a short span of time. Morrison Express work as
an air freight specialist. The reason behind the choosing of this air mode by the Morrison
Express will lead it to deliver and make the product accessible among the customers in a very
short time so that as soon as they make order they would receive the products.

LSP's:
Logistic service provider are outsourced service provider that are highly professionalized
and specialist in their field. These providers help the companies in order to manage their supply
chain operations including warehousing, shipping, order fulfilment and various other. These
LSP's enables the companies to operate their work at wider scale (Zhu and et.al., 2017). Since
they make the working and operation of the supply chain easy so it will lead the organisations to
fulfil the bunch of orders.
3 PL's:
It refers to a service that enable the companies to outsource operational logistic from
warehousing till its delivery and making focus over other business activities too. 3PL are those
service provider companies which provides a number of services that are associated with the
supply chain including transportation, warehousing, picking and many more (Asian and et.al.,
2019).
In case of Morrisons, it implements and adopts third party logistics so that it can make
the delivery of the product to its customers in a definite time. Being a dealer at wide scale having
online presence the third party logistics helps it in executing its operations.
Management of supply and demand side transportation:
In case of Morrisons it makes and implement a balance between the supply and demand
side transportation. This means that as per demand of the products it makes it supply. Since there
is direct relation between the demand and the supply of the goods. So, Morrisons also follow this
practice in terms of transportation. This means that as per the risen demand it will deliver and
make supply of the products.
Efficiency of supply chain transportation:
In case of Morrisons the supply chain regarding transportation is very efficient in terms
of delivering the product of the customers at their doorsteps in a short time period. As it uses air
freight and an inculcation of 3PL so it makes its business operation along with delivery of the
products at a short interval. This means that its customers not need to wait for the delivery of the

products. Thus, it can be right to said that the delivery or the transportation supply chain of
Morrisons is efficient and effective too.
4) Warehousing and capacity
Role of warehousing in the supply chain of Morrisons:
Warehousing:
It refers to an act that will make the storage of the goods that is being delivered later. As
per the type and size of organization, the size and mode of warehousing differ. However, it is to
be noted that no supply chain will be able to function without incorporating the element of
warehouse (Ackerman and Brewer, 2017).
Role:
Warehousing plays an important role in the supply chain of Morrisons. It makes the
reduction of risk of shortage or the economic risk in terms of fluctuation of prices. It enables the
Morrisons to store the surplus products so that as per the demand it will be processed or used for
meeting the needs of customers. It also makes the Morrisons to make continuous production of
goods because through warehousing the excess of the goods and the products will be stored
easily. It also assists the Morrisons in terms of utilizing the time. This means that by creating the
time gap regarding production and consumption it makes the availability or delivery of goods as
and when demanded (Tien, Anh and Thuc, 2019).
Difficulty in capacity management with an involvement of 5 steps:
Capacity management:
It refers to maximization of the capacity of the organization so that its level of output
production will remain maximum under all the circumstances.
However, management of capacity is difficult task along with the involvement of 5 steps.
This is because as per the steps of capacity management which involves checking the current
SLA level wherein it is being analysed that what is the current capacity of the organization or
service level agreement. However, it is very difficult to be meet and identify the SLA in terms if
any uncontrollable changes occurs. Likewise, as per the second step wherein current capacity of
the organization is measured is also difficult because if any unforeseen situation will arise then it
will have a direct impact over the company's capacity (Slimmer, 2019). So it is not able to

determine accurately. Similarly, determining the future need which is the third step is also
difficult because of the fluctuation in demand of the product as per the changes in the taste and
the preferences of the customers. Likewise, it is also not possible to analyse the future
consolidation opportunities and making capacity recommendation which are fourth and fifth step
of capacity management. This is because future is not predictable and business environment
changes very rapidly.
Efficiency of supply chain in the management of capacity of Morrisons:
The supply chain of Morrisons is considered as very efficient in terms of managing
capacity of the company. As the supply chain of Morrisons have an inculcation of the essential
elements in it in the form of 3PL, adequate stock management tactics along with warehousing
which continuously encourage the company to raise its capacity along with its management.
Since, the supply chain of the company also maintain the balance between the demand and the
order so it will also make the capacity management of the company to be efficient.
5) Strategy and competitive advantage
Competitive advantages:
Yes the aids and strategies of the Morrisons bring competitive advantage to it. This is
because as the customer service that are being offered by the company is prompt and accurate.
Likewise, the management of the inventory and the implementation of the practices of inventory
of the Morrisons including keeping of safety stork or EOQ and various other make its product
readily available for its customers. Thus, it can help it in beating its customers because through
these practices its product will never run out. Likewise, the transportation facility of the company
is also efficient that make the delivery of the product on time and make the product available to
its customers. In the same way inculcation of LSP in the organization also enable the company to
make the handling of supply chain in efficient manner and help it to assist the company in
grabbing competitive advantage (Qi and et.al., 2017). Since the Morrisons have adequate
warehousing facility that enables the company to have adequate availability of its products that
again help it to grab competitive advantages. Thus, due to possessing efficient supply chain and
its aspect Morrisons can easily grab competitive advantage.

In addition, of these existing capabilities, adoption of these practices and strategies will
further assist the company in strengthening its supply chain. These strategies are:.
 Although, Morrisons have good transportation facility but having a more concentration
towards raising the efficiency of this facility will help the organization to have effective
supply chain.
 Making of continuous evaluation and implementing the required and necessary changes
in the company will also assist the Morrisons to have efficient and effective supply chain.
 In-spite of having adequate warehousing facility a more concentration towards making it
safe and secure in terms of enabling safety equipment or establishment of controlling
practices so that the stock will remain controlled and checked will also contribute a lot in
raising the efficiency of supply chain.
 Likewise, selection and reviewing of inventory management practice will also assist to
raise the efficiency of supply chain of the company.
Overall supply chain strategy of Morrisons:
As there are many supply chain strategies but in case of Morrison it usually uses a
combination of customer centricity and predictive business. As per the strategy of customer
centricity it makes and plan its products to meet the need of its customers (Melnyk and Stanton,
2017). This means in accordance with the need of the customer segment Morrisons plan its
activities and moult its supply chain so that it can satisfy the needs of its customers. Morrison
being a digitally operating company by having an inculcation of the strategy regarding customer
centricity also able to make its supply chain digitally accessible and thereby making it enabled to
serve consistently. Likewise, as per the strategy of predictive business the focus is being lied
over the designing and accordingly making and maintaining the product so that homogeneity will
be established. As per this strategy company try to make uniform product for its customers so
that they will receive same quality and quantity of the products (Kyeremeh and Dza, 2018).
Adoption of these strategies surely helps the Morrisons to grab competitive advantage because
through these strategies the efficiency of the business in not only meet but the customer's
grabbing and attraction also make possible. As customers are the king of the market so by
meeting the needs of the customers and grabbing more customer share Morrisons can easily raise
competitive advantage and beat its competitors.

CONCLUSION
From the above report it is concluded that the management of supply chain plays an
important role in the operation of the company. It is the key element that lead the company to
achieve its objective of serving its customers in terms of making adequate supply of its products
in the market. It is also understood that inventory management, transportation, LSP's,
warehousing, and capacity management are the important element of the supply chain that enable
the company to have competitive advantage and adequate supply of its products in the market.
Continuous monitoring and making evaluation of supply chain is highly recommended to
every company including Morrisons so that it can incorporate the necessary business
environment changes and the changing trends too.

REFERENCES
Books and journals
Ackerman, K.B. and Brewer, A.M., 2017. Warehousing: a key link in the supply chain.
In Handbook of logistics and supply-chain management. Emerald Group Publishing
Limited.
Asian, and et.al., 2019. On the importance of service performance and customer satisfaction in
third-party logistics selection. Benchmarking: An International Journal.
Brunaud, and et.al., 2019. Inventory policies and safety stock optimization for supply chain
planning. AIChE Journal. 65(1). pp.99-112.
Çalışkan, C., 2020. The economic order quantity model with compounding. Omega, p.102307.
Inegbedion, and et.al., 2019. Inventory management and organisational efficiency. The Journal
of Social Sciences Research. 5(3). pp.756-763.
Kuo, T.C. and Lee, Y., 2019. Using pareto optimization to support supply chain network design
within environmental footprint impact assessment. Sustainability. 11(2). p.452.
Kyeremeh, E. and Dza, M., 2018. Supply Chain Management and Organization Performance: A
Value Creation Perspective. Archives of Business Research. 6(10).
Melnyk, S.A. and Stanton, D.J., 2017. The customer-centric supply chain. Supply Chain
Management Review. 20(12). pp.28-39.
Qi, and et.al., 2017. The impact of operations and supply chain strategies on integration and
performance. International Journal of Production Economics. 185. pp.162-174.
Tien, N.H., Anh, D.B.H. and Thuc, T.D., 2019. Global supply chain and logistics
management. Dehli: Academic Publications.
Zhu, and et.al., 2017. The role of outsourcing management process in improving the
effectiveness of logistics outsourcing. International Journal of Production
Economics. 188. pp.29-40.
Online references
Slimmer, K., 2019. YOUR GUIDE TO THE KEY STEPS OF CAPACITY PLANNING AND
MANAGEMENT. [Online]. Available through
<https://galileosuite.com/explorer-blog/your-guide-to-the-key-steps-of-capacity-
planning-and-management/>
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