In the increasingly competitive
business environments, focus has shifted to the efficiency of the retail
management systems and the supply chain management as a whole in providing a
competitive advantage to the businesses (Walters, 2006). The essence of good
supply chain management is the provision of goods at the convenience of the
customers in a manner that ensures that the organizational costs are kept at a
minimum. This study focus on an Ice cream firm (Walls Ice Cream UK) with an aim
to reveal the weaknesses in their retail logistics and make recommendations on
how they can improve their supply chain management through the adoption of an
effective logistics mix that would set them above their competitors while
keeping their costs at the lowest point possible. The research shall involve
the use of questionnaires (on the Walls Ice Cream UK) as well as an extensive
review of the various practices relating to retail logistics in the perishable
food industry in the UK. These insights will be used in making recommendations
on how Walls Ice Cream UK can improve its profitability through effective
supply chain management and effective retail logistics management.
How Walls Ice Cream UK can improve
its retail logistics mix and supply chain management to ensure higher organizational
performance
This aims to recommend ways in
which Walls Ice Cream UK can boost its profitability by embracing effective
supply chain management styles as well as focusing on the use of efficient
retail logistics management. The study shall firstly explore the supply chain
management styles already in practice at the Walls Ice Cream UK and outline
them accordingly. It shall then focus on analyzing the various studies
dedicated to analyzing the various ways in which other firms in related
industries have been able to improve their performance through the adoption of
effective supply chain management styles. Having made the requisite
comparisons, the study shall recommend the ways in which Walls Ice Cream UK
could improve its supply chain management. The research questions to be
answered include:
·
In what ways does
distribution affect the financial performance of organizations?
·
What is the retail
logistics mix and what are its defining components?
·
How does Walls Ice
Cream UK manage its supply chain and what retail logistics are involved?
·
What are the general
trends in retail logistics mix and supply chain management styles in the UK and
what is their relative contribution on the financial performance of
organizations?
·
How can Walls Ice Cream
UK improve its supply chain management to boost and sustain its financial
performance in the market?
This research is based on the
premise that supply chain management is a key contributor to the financial
performance of any enterprise.
Unlike other studies that tend to
focus on general trends across different industries, this research is
company-specific. Its findings and recommendations are therefore expected to be
specific to the company mentioned and therefore not applicable prima facie to
other organizations without meaningful modifications. This aspect distinguishes
this research from past studies. The information gathered in this study is
expected to provide Walls Ice Cream UK with invaluable insight into the ways in
which they can improve their financial performance and enhance their
competitive advantage using proper supply chain management styles and the use
of an effective retail logistics mix. The study is also expected to provide a
strong basis for future research on the impact of retail chain management on
the effectiveness of individual companies across the UK.
According to Fisher (1997), the
good performance of an organization is dependent on how it combines effective
retail logistics with the choice of suitable supply chains and general practice
of good supply chain management. The process of building customer confidence
requires an established reliability of the chosen channels of distribution to
ensure constant availability of the goods in good form in the selected outlets
(Kogan Page Ltd, 2009). On the other hand, organizations need to guard against
the temptation to overstock inventories in their warehouses in the guise of
ensuring supplies are available to the retail outlets whenever needed. The
balance between the retail logistics and ensuring the goods are readily
available to customers at the designated outlet is what is generally referred
to as the supply chain management (Dubois, Hulten and Pedersen, 2004).
The logistics involved in retailing
of goods can be very expensive to the organizations if not organized in an
efficient manner. The main cost that manufacturers need to guard against is the
cost associated with the holding of inventories for protracted lengths of time
which may lead to spoilage and depreciation of the inventories before sale to
the target consumers (Carter and Ellram, 1998). In their publication, Razzaque
and Sheng (1998) observed that good coordination of the retail logistics can
lead to the reduction of the cost of the products, which may in turn allow the
organizations to either gain superior profits or enable them to reduce their
prices and in the process gain a competitive advantage over other market
players. Good retail logistics can also help ensure constant supply of the
goods in the retail outlets. This may help build the customer confidence in
such retail outlets hence giving the organizations a strategic advantage in the
market through the creation of loyal customers. Various factors have been known
to have a significant influence on the decisions that organizations may take in
relation to the retail logistics that they may adopt from time to time. Such
factors may include the legal and environmental concerns may have an influence
on the manner of packaging that organizations may choose to have for their
products (Towil and Christopher, 2002).
While this move may have been
costly at the beginning, many organizations, especially those in the food
industry have found the recycling of packaging materials to be quite useful in
containing their costs thereby improving their bottom lines. Retail management
goes beyond the act of simply manufacturing and availing the products to the
retail outlets in good time: it also involves the art of making accurate
predictions on the demand trends and making appropriate adjustments to ensure
that the organization can capitalize on the arising opportunities and
minimizing their costs when unfavorable conditions arise (Gunaesekaran and
Ngai, 2006). For instance, when the meteorologists predict extremely high
temperatures in a given area, the organization must increase their stocks in
the retail outlets in the affected areas in order to maximize on the likelihood
of the demand for ice cream going up. Similarly, the amount of inventories to
be stocked at the retail outlets need to be scaled down at the onset of a cold
season in order to avoid high costs associated with overstocking inventories. Scholars
categorize the components of retail logistics into five: storage facilities,
inventory, transportation, unitization and packaging, and communication (Croom,
Romano and Giannakis, 2000). The storage facilities or warehouses are used by
the retail outlets to stock goods that they anticipate would be needed at any
particular time before the arrival of any additional stocks from the
manufacturers.
The concerns on inventory mainly
focus on the amount of inventory to be kept in store at the retail outlets. An
efficient logistics management system should be able to provide guidance on the
figures required to ensure that the inventories stocked are just the right
quantity that will meet the customers’ needs while minimizing any losses (Smith
and Sparks, 2004). The transportation element involves the selection of the
most efficient and cost effective form of transport for the inventory in
question. It may also involve the scheduling of the mode of transport in a
manner that ensures that delivery is timely and reliable thereby reducing the
need to stock a higher amount of inventory as would be necessary where the
transportation modes prove to be unreliable. The unitization and packaging
involves the packaging of goods in a manner that allows the consumers to
purchase the quantities of the goods needed with relative ease (Fernie and Sparks,
1998). The consumers that require smaller units should be able to access the
products with as much ease as those who require higher quantities of the same
products. The element of communication involves the sharing of information
between the manufacturers and the retail outlets on the demand trends and the
quantities of goods required at a particular time.
The delivery of the right quantity
of goods enables the retail outlets to remain stably stocked, a phenomenon that
allows them build the requisite customer confidence they need to maintain a
strong performance in the market. The logistics mix enables the combination of
these five elements in a manner that creates a synergy which results in highly
effective and cost effective retail logistics management system which helps
achieve a high profitability for the organization. The trends in most markets
have seen a surge in the level of cooperation between the manufacturers and the
retail outlets where the retailers are increasingly becoming influential in determining
the type and amount of inventory that can be stocked with them at any
particular time (Cheung, 2010). This is a sharp break from the past where
manufacturers simply anticipated demand and deposited their products at the
retail shops for sale. The changing trends have also been able to capture the
various steps that organizations take to improve their retail logistics. Key
among these has been the cutting down of the amount of inventories to be
stocked at the retail outlets that potentially result in the reduced
suitability of the products (especially perishable foods) (Cheung, 2010). The
focus has instead shifted to ensuring efficient delivery systems that avail the
goods to the retail outlets as soon as the inventories are required. This
improvement has led to a reduction of the order lead time required for the
deliveries as well as the enhanced functionality between various retail outlets
that enable the manufacturer cut on the cost of transport Cheung, 2010. Retail
management has also focused on ensuring the efficiency of the return of the use
packaging materials for re-use and recycling. The recent market trends that
have seen the consumers’ preference for environment-friendly packaging on the
rise has shaped the concept of retail management and most organizations have
sought to use their retail outlets as a crucial collection point for the
materials to be re-channeled to the factories for recycling and re-use.
The concept of supply chain
management can be attributed to the works of Peter Drucker in his 1962
discussion which viewed distribution as one of the functions of business
organizations whose costs could be greatly reduced through the introduction of
more efficient systems (Drucker, 1962). He focused on the reduction of
duplication of functions and the optimization of the properly placed functions
in order to ensure a well coordinated and effective distribution system that
would be both reliable and cost effective. The main theories that are
associated with the supply chain management concept include the resource-based
theory of firms, the value chain, the network theory, and the transaction cost
economics (Harland, Lamming and Cousins, 1999). The aim of the supply chain
management is to give the organization a competitive advantage through the
effective and efficient distribution of their products in the market. Supply
chain management has gained prominence with the acknowledgement of the fact
that efficient management not only saves time and money, but also enables the
firms to gain a competitive advantage over other market players.
The research shall mainly dwell on
secondary sources although with a significant input of primary research. The
primary research shall be used to determine the supply chain management styles
as well as the retail logistics mix in use at Walls Ice Cream UK. The thrust of
the research, which is centered around making recommendations on how Walls Ice
Cream UK can improve its financial performance through effective supply chain
management, shall be based on the review of previous studies and industry
reports which have been dedicated to finding ways on how companies in various
industries can improve their performance. This data will mainly be obtained
from official publications of companies, industry reports, economic journals
and other reliable sources.
The dominating view to be
applicable in this study shall be the realist philosophy. It shall constitute
both the perceptions of individuals to be featured on the surveys as well as
proven data from across a number of related industries (Research philosophies,
2009). This paradigm will ensure that the information gathered can be relied
upon for making changes in the way an organization conducts its business.
The population shall consist of the
members of staff of Walls Ice Cream UK. Out of these, 5 employees whose
functions are related to distribution and overall organizational performance
(management level staff) shall be interviewed.
The interviews shall be
face-to-face interviews. This kind of interviews is popular among researchers
due to their ability to provide the researcher with in-depth views on the
subject at hand. The scheduling of the interviews shall be by mutual consent
and the use of recorders shall be employed ensure ease of analysis with minimal
loss of data.
This shall be done quantitatively
and qualitatively. The data collected shall be presented with use of visual
aids such as charts and various figures in order to create quick understanding.
The analysis shall also incorporate findings from secondary data and shall be
presented with utmost clarity to ensure that palatability of the information.
It is feared that there may be
insufficient information to allow for the study to make compelling
recommendations. If this limitation occurs, the research shall use it as a
basis for the recommendation of additional research on the subject.
The resources required for this
exercise will be the internet, finances to organize for interviews, and the
finances to search for relevant company and industry reports needed for the
research.
For more theory and case studies on: http://expertresearchers.blogspot.com/
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