Waste Reduction in Pak'n Save Supply Chain: Increasing Surplus

This report investigates how Pak'n Save can enhance its supply chain surplus by reducing waste. It explores the organizational background, integration and value generation through Value Stream Mapping (VSM), risk and conflict management, sustainability aspects, and transportation and logistics. The analysis covers supplier integration, waste removal strategies, risk mitigation, sustainable practices like supply chain mapping and training programs, and reverse logistics for product reuse and recycling. The report emphasizes the importance of a coordinated and sustainable supply chain to improve efficiency and reduce environmental impact, ultimately increasing the overall supply chain surplus for Pak'n Save.

Supply Chain Management
Name of Student
Name of University
Author Note

Table of Contents
Research Question......................................................................................................................................................................................................................... 3
Introduction................................................................................................................................................................................................................................... 3
Organizational Background........................................................................................................................................................................................................ 5
Integration and Value Generation................................................................................................................................................................................................. 5
Integration................................................................................................................................................................................................................................. 6
Value Generation....................................................................................................................................................................................................................... 6
Risks and Conflicts......................................................................................................................................................................................................................... 9
Risks........................................................................................................................................................................................................................................... 9
Conflicts................................................................................................................................................................................................................................... 10
Sustainability aspects............................................................................................................................................................................................................... 11
Transportation and Logistics........................................................................................................................................................................................................ 13
Transportation......................................................................................................................................................................................................................... 13
Logistics................................................................................................................................................................................................................................... 14
Conclusion................................................................................................................................................................................................................................... 15
Reference.................................................................................................................................................................................................................................... 17

Research Question
The research question is:
How can Pak’n Save increase overall supply chain surplus by reducing or eliminating waste?
Introduction
The supply chain and logistics management is an important aspect within an organizational scenario that plays significant role in the final
shipment of the products that have been manufactured. In addition to this, it can be said that the supply chain management is a significant
component of an organization and helps in designing the business planning and marketing of the products. It has been noticed that the
organizations tend to focus on adopting effe4ctive supply chain and logistics management as it helps the organization top decide effective
strategies for performance, quality management and risk management. However, it has been noticed that in the present context the organizations
are facing multiple difficulties in adopting and implementing effective supply chain management. In this regard, it is to be mentioned that by
taking up effective supply chain and logistics management an organization is able to gain competitive advantages. It can also be said that the
supply chain management frameworks that are taken up by the organizations tend to face multiple difficulties in the present competitive
environment. In order to overcome the issues faced by the supply change management of an organization, it is important to focus on the major

issues and the reasons behind these problems. It can be noticed that the major problems t5hat the organizations are facing are being highly
influenced by the several factors. Globalization is one of the most significant factors that creates impact on the supply chain and logistics
management system of an organization. Moreover, it can be noticed that the organizations are being highly influenced by the effects of
globalization. It has been noticed that in order reduce the costs of the manufacturing and packaging, many organizations are taking up the
strategies of relocating their manufacturing units to the locations that have lower taxes, transportation and labour costs. Moreover, it is to be
noticed that the organizations that adopt the methods of shifting their manufacturing units to different locations face problems as a result of
complexity of the overall procedure.
In addition to this, it has been monitored that the organizations suffer significantly as a result of the increasing demand of the market and
the high competition that is existing within the industry. As a result it has often been monitored that the organizations often fail to adopt efficient
strategies that can address the needs of quality compliance.
It has been monitored that the food and grocery supermarket chains are monitoring exceptional growth within the country. In this regard
it can be said that the food and grocery industry of the country is monitoring highest growths (Christopher, 2016). Moreover, the annual turnover
of these organizations are also very high. Hence, it can be said that the food and grocery industry of the country is developing remarkably.

Organizational Background
Pak’n Save is a food warehouse is a food chain that is operating in New Zealand. The organization is owned by Foodstuffs cooperative
and was established in the year 1985. In addition to this the organization is regarded as one of the most popular supermarket chains that are
operating within the country. The primary aim of the organization is to provide the local consumers with everyday needs of food and grocery
items. Moreover, the organization aims at providing the food and grocery items at a significantly low price (Jacobs, Chase &Lummus, 2014). It
is to be mentioned that the one of the primary business strategy of the organization is to provide the food items in a comparatively lower price. In
addition to this it has been noticed that the vision statement of the organization is emphasizes the strategy of selling grocery and food items at a
lower price. In order to support their organizational aim, Pak’n Save has set up outlets and stores that do not have any frills. In addition to that
the organization customers need to pay extra for the plastic bags that are to be used in order to carry the items (Monczka et al., 2015). Often the
packaging has to be done by the customers themselves. Hence, the supermarket has been highly successful by applying the strategy. Moreover, it
is considered as one of the cheapest supermarkets in the New Zealand.
Integration and Value Generation
It has monitored that in order to support the efficient functioning of the supply chain management of the organization, the role of
suppliers are to be regarded as highly significant. Moreover, it is to be noticed that the suppliers and the customers are to be integrated and

cooperative in order to achieve the aimed success (Seuring, 2013). Moreover, it has been noticed that better coordination helps the organization
to reduce implement effective waste management and reduce variability. As a result of these, an organization is able to increase organizational
efficiency as well as ensure faster delivery. In the present context it can be said that the role of the suppliers are highly important. The
collaboration of the suppliers and the manufacturers are to be regarded as integral part of the supply chain management.
Integration
It can be easily understood that in order to achieve the aimed success Pak’n Save needs to operate in an integrated manner. Moreover, it
can be said that the integrated supply chain management operates in an integrated manner and employ effective strategies to ensure effective
functioning (Brandenburg et al., 2014). It has been noticed that the suppliers of the organization have the responsibility of delivering essential
materials to the manufacturing units. In addition to this, timely collection of the final products and supplying them to different locationsis also
important. Hence, it can be said that the suppliers of the organization play important roles and need to work in an integrated manner.
Value Generation
In order to analyse the possible ways of increasing the efficiency of the supply chain management of the organization, importance of
Value Stream Mapping (VSM) is to be analysed thoroughly. The VSM system of an organization focuses on the process of adopting
organizational strategies. Moreover, it is to be mentioned that Pak’n Save needs to adopt a VSM framework that is effective enough to address
the issues of lean waste generation. In addition to this it can be said that the Value Stream Mapping of Pak’n Save have to effective enough to

add value to the products of the organization (Pagell&Shevchenko, 2014). It has been noticed that the primary purpose of the value stream is to
effectively identify the factors that are influencing waste generation. In addition to this, the VSM system takes up effective steps to reduce the
waste generation. It can hence be said that by adopting effective VSM framework, the organization will be able to increase the efficiency of the
supply chain and logistics management.
In this regard it is to be mentioned that the organization can effectively use the VSM framework to identify the strategies for waste
removal. Furthermore, the waste removal policies can be divided into three types. The Non-value adding operations is one of the most effective
ways of waste r4emoval operations of VSM system that focuses on the aspects of reducing the waiting time of the supply (Zhu, Sarkis& Lai,
2013). In addition to this, another effective way of ensuring waste removal operations is to identify the necessary but non-value adding actions.
It has been monitored that within an organizational scenario several actions are to be taken up that do not have any particular outcomes. Hence,
these actions are to be regarded as wasteful. However, it has also been noticed that these actions cannot be eliminated easily. The VSM
procedure however works effectively in order to conserve the operations that are adding value to the supply chain management (Fahimnia,
Sarkis&Davarzani, 2015). It has been noticed that by taking up effective VSM framework, the organization will be able to converse the process
of generating raw materials by using manual labour.

Pak’n Save
Supplier Network
Integrated Information system
Value Stream Map

(Source: Author)
Risks and Conflicts
Risks
The supply chain management is not only about acquiring goods and services, it also involves identifications of risks and take measures in
order to mitigate or resolve them .The risks associated with supply chain can be categorized into external risk and internal risks (Fahimnia et al.,
2015) . The three important steps related to risk management practices followed by the supermarket, Pak’n Save are as follows:
 Profiling or Describing Supplier Base – It is important for the company to identify the commodities of utmost importance and also
identify the entities which are of less importance. It includes identification of raw materials, identification of strategic materials and
understanding of strategic supplier’s organization.
 Mitigation – Mitigation is a very crucial step involved in risk management. In this step, the company set goals and targets so that it can
achieve the desired outcomes. This also evaluates how fast the company can continue their usual operation.
 Measures and Actions – The implementation of supply chain risk management involves clarifying roles and responsibilities, which
includes collaborating with the suppliers for securing supply chain.

Conflicts
The conflicts in a supply chain involves the tension between the two or several individuals or groups within a supply chain or organization
resulting from the incompatibility or differences from the actual or desired responses .The three major conflicts encountered in the supply chain
of the company Pak’n Save are as follows :
 Conflict between the manufacturer and supplier – The stake holders in the supply chain have different objectives which results in
conflicts. The objectives the manufacturers of making larger batches of production results in conflicts with the objectives of the
warehouse.
 Conflict between the dealers and the manufacturers – There is conflict between the buyer and supplier , which is an inevitable
outcome of the supply chain management .
 Conflict between the Supplier and Supplier – A conflict can arise due to the differences or incompatibility between the suppliers
involved in the supply chain.
Sustainability aspects
The sustainability in an organization involves meeting the needs and goals of the company without exploitation of resources so that it can
be used in the future (Beske&Seuring, 2014). The three important sustainability practices followed by the company ,Pak’n Save are as follows :

 Mapping of Supply Chain – In order to have a comprehensive understanding of the sustainability impacts of the supply chain, it
is important to identify the environmental and social challenges (Martínez-Jurado&Moyano-Fuentes, 2014). The company Pak’n
Save reduced the number of suppliers considering the performance against the sustainability criteria.
 Development of training and capacity building programs – In order to improve the sustainability and drive the behavioral
changes, the company, Pak’n Save has developed training and capacity building programs .
 Drive Performance Improvement – The company, Pak’n Save after having the understanding of the supplier baseline
performance conducts an audit program in order to measure the performance improvement.
In a supply chain, the reverse logistics involves monitoring the lifecycle of the products after the sale of products (Dyckhoff, Lackes&
Reese, 2013). The reverse logistics practices followed by the company ,Pak’n Save includes how the products of the company can be potentially
reused , how it can be disposed after its usage and also finding the way by which the products which are expired can be utilized or created value
(Hsu, Tan &MohamadZailani, 2016). The company Pak’n Save make use of the reusable plastic bags for their customers, which can be used
number of times and at the end of its lifecycle it can be recycled for future use , instead of the usage of environmentally damaging plastic bags .
This approach or practice by the company ,Pak’n Save complies with the reverse logistics practice followed by them .

Transportation and Logistics
Transportation
It has been noticed that in order to reduce the chances of greater waste generation and support the process of effective operation of the
supply chain management, the organization needs to take up effective methods of transportations. In this regard, it can be said that the
organization has taken up approximately 10 sources to which they are delivering their products. The sources to which the organization is
supplying their dairy products are the retailers, supermarkets and the warehouses (Govindan et al., 2014). Hence, it can be understood that the
organization needs to take up effective supply chain and logistic strategies in order to support the entire process. In this regard the locations to
which the manufacturing unit is supplying the materials are to be named. As it can be understood that the organization has multiple outlets and
supermarkets and grocery stores all over the country. The organization has more than 57 stores that are presently operating in New Zealand. It
can be monitored that the popular stores of the organization are located at Plymouth, Auckland, Pukekohe and Christchurch. Hence, it can be
understood that the stores of the food and grocery stores of the organization are located in the prime locations of the country. Moreover, it can be
noticed that the stores of Pak’n Save are located across the south and the north islands of New Zealand. In this regard, it has also to be mentioned
that the organization has also opened the fuel site in Tameta (Martínez-Jurado&Moyano-Fuentes, 2014). Hence, it can be understood that the
organization has spread all over the country and the supply chain management of the organization needs to adopt strategies to supply the