Answer:
Supply chain management and 3PL
Supply chain management is the approach by which a company organizes the way in which the products or services flow will be managed by the company. The process includes several steps and activities to ensure a controlled and consistent supply of products or services which encompasses an integrated planning process (Jacobs et al. 2014). It makes sure that the process of starting from acquiring raw materials and production through distribution to the final customer, in the most streamlined and cost-effective way possible. A 3rd party logistic company helps an organisation to deal with the integrated process by several means (Cai et al. 2013).
The organisation that is going to be studied in the following assignment is ASDA supermarket. This is a supermarket chain that was founded in the year 1965. The company is now operating under Walmart. The organisation has recently opened their e-commerce chain which has made home-delivery one of the major aspects of the service that the company is offering the customers (Asda.com 2018). Timeliness and freshness of the items are the two most important factors that are being focused by the company. Home-delivery process not only includes transportation and manuals labour it also includes a lot of co-ordination of the staff members in order to keep a track of the product in a holistic monitoring method. First of the company has to maintain a continuous flow of the products and in order to do that they should be a constant check on the quantity of products that are being purchased and the quantity that is there in the stock (Wang et al. 2015).
In supply chain management a company can include several concepts and theories, the most appropriate theory or concept that can be included in the supply chain management process of a retail unit is JIT approach (Stadtler 2015). JUST IN TIME or JIT is the process by which retailers can save investment by logically stocking products. It also helps in minimizing waists. Some of the usual challenges which are met by the help of the JIT approach are the dynamics of the customer demands tight margins of operation. Efficient management of inventory is one of the most important hurdles that the company has to face in retail industry. This approach helps the company in saving cost of warehousing, lowering the rate of inventory obsolescence as well as improve the quality of the products and service. Asda has been under the speculations for its home delivery services; the company has been increasing the cost of home delivery services as reported by (Evans, 2017).
The organisation is one of the leading retailers in the UK market the company has been struggling in the industry to make a mark in the E-commerce department and has been facing several challenges in the home delivery system. Efficiency in terms of logistics and supply will help the company to achieve the corporate objectives as well as help the organisation in improving the goodwill of the company (Ross 2015).
Importance of 3rd party logistics in Retail industry
According to Ackerman (2007), supply chain management depends a lot on the relationships and collaborations of the company with third party organisation. A company engages in several relations in the process of planning an integrated supply chain management. For a retail organisation like ASDA, where both online and offline services are available the company has to ensure that there is a balance and ease of operation in between the two process. As the products that are offered by the company in both the online and the offline segment are all same, the process may become a little complex for the staff members especially in keeping the track. A third party organisation can help in logistics with: training, supply of monitoring and tracking software, transportation etc. they can help the organisation to improve the efficiency with a new approach and deal with the barriers like lack of information, co-ordination issue, cost elevation as well as not meeting up to some of the claims (Ackerman 2007).
Area of supply chain which will help ASDA in achieving the competitive advantage
The third partly logistics organisation can help ASDA with a new and improved software that will have two platforms. This will help the company to provide an efficient and better quality items at a lesser price to the customers ensuring an edge over the competitors in the market. First platform is to monitor the Just In Time approach that the company follows to keep up with the consistent flow of product according to the demand and inventory logs. Second platform is to identify and track the delivery system on the field.
Issues in the home delivery process of the company that has been identified are as follows:
- Increase cost of service
- Failure in delivering the products to the customers in time that was allocated
- Cancellation of order without information or indication (Smithers 2016)
As the quality of the product and the time commitment of the company are two of the major aspects in the e-commerce model that the management has to focus upon the Just In time approach helps the company to provide with good quality product at the right time. The company has been consistently failing in this approach and perishable items in the list even after being fresh do not end up reaching in time. The first platform of the software that the 3PL will provide the company will deal with this aspect. The software will ensure that they forecast a proper demand and supply for the staff members who will help in stocking the correct quantity of items so that there is less wastage and fresh items are being supplied. This platform will be divided in two segments one is perishable items and the other is non-perishable items, the approach of the software for these two kinds of goods will be different, as the shelf life of these two segments are different (Ackerman 2007).
In the second platform of the software the company will be able to track the delivery van, and the delivery boy so that the company can keep up with the commitment. The software will also streamline the orders as per the location so that delivery cost can be reduced due to easy access of the address by the delivery boy. For example: if X amount of delivery is to be done in area Y, then this software will find out the orders and ensure that delivery in that region is completed in a day so that there is reduced cost of transportation.
The 3PL company will also provide necessary training for the staff members who will be using the software in order to ensure that they can make use of the software optimally and increase the efficiency of the integrated plan. There are a number of roles which has to be fulfilled in this process. The company has to make sure that the employees who will be using the software go through the training process. The company will also have to train the delivery staff to use the OTM machines and the software. Some of the prerequisites of the software should be the user friendliness and ease of use by the staff members. The previous software that was used by the company had different approaches and was dealt by different 3rd parties which had been one of the major issues that the company was facing as the collaboration was different, the company had to divided its focus, in this case the two fold of the same program will bind the system in an integrated process and will simplify the process for the staff members.
Operational strategy for sustained business success
Operations management is the process by which the company deals with any functions of the business. It involves planning, organizing, and monitoring approaches and makes necessary improvements for higher profitability. According to the five principles of operations management; Speed, Quality, Price, Flexibility and Dependability are the aspects that are to be focused with the help of the policies and decisions that are formulated. The area of supply chain that is being handled by the third party logistics company is the supply of software and training to make the process of home delivery simple and structured (Wang et al. 2015). It will improve the speed and efficiency of the process by making it more digital and less dependence on human resource this will reduce the instance of human error and will improve the quality of the service. The software and the training program that will be offered by the third party will help in making the process flexible as it will help the company to reduce the cost of delivery as well as keep up to the claims that the company has made this will improve the dependability of the organisation which will help in improving the reputation of the organisation. Business organisations help in improving the quality of their products and services by incorporating latest technology the organisation operates in the UK industry and has a lot of opportunity in terms of technology to incorporate in the operations in order to gain an edge over the competition. With the help of this facility that the 3PL company will offer ASDA can formulate marketing decisions which will help the company in promotion. The training program will help the staff members in efficiently utilize the software to make the work easy and reduce the amount of hassle. E-commerce is a platform that is based on technology hence incorporating advanced software to look after the delivery process is rational (Ackerman 2007).
As a retail organisation it is the duty of the operations management to look after the daily functions of the business which includes: monitoring of the inventory, customer service, training, inventory management, Visual Merchandising, home delivery options finance etc are some of the functions on a daily basis (Stadtler 2015).
The objective of the process is to reduce the cost of the home delivery service, to maintain the claims that the company has made and also to maintain the quality of the products (Smithers 2016).
Service/Process design: the software will help the management streamline the operation of home delivery process along with managing the supply and the consistent flow of quality items in the warehouse. The design of the operation will be made more structured with the help of the software as it will not only deal with the delivery process it will also simultaneously keep track of the supply of the products helping the company with organizing the plan for home delivery service.
Process flow: The software will enable to sort the order and maintain the track of the products in and out of the warehouse. As the online service is technology based this software will be connected to the back end of the website. The order will be packed in the warehouse manually depending on the order and the itinerary will be sent to the delivery boys. The delivery service on the second phase of the software will help the backend to track the service; this will help in daily management of the delivery (Stadtler 2015).
Capacity Planning: The Just in Time approach of the company along with the software will help in determining the capacity of the service that the company can provide the customers in a day and therefore this will help in providing a date of delivery for the order. For example 200 people have ordered on Tuesday and the delivery date according to the capacity of the resources of the company has been stated as Wednesday can be fulfilled for 100 people, the company will show to the rest of the 100 people that their order will reach only on Thursday, this way the customers can choose to place the order or not according to their preference. If the amount of perishable items is high accommodation for ASAP delivery can also be arranged with this software. Technology and Innovation: the strategy of the company is towards innovation and technology with the help of the software the company can achieve the objectives that are stated above (Wang et al. 2015).
Reference list:
Ackerman, K.B., 2007. Fundamentals of Supply Chain Management: An Essential Guide for 21st Century Managers. DC Velocity Books.
Asda.com (2018). Home page. [online] asda.com. Available at: https://www.asda.com [Accessed 3 Apr. 2018].
Cai, X., Chen, J., Xiao, Y., Xu, X. and Yu, G., 2013. Fresh-product supply chain management with logistics outsourcing. Omega, 41(4), pp.752-765.
Evans, T. (2017). Asda has quietly upped it minimum delivery spend for some shoppers from £25 to £40 – and customers are FURIOUS. [online] thesun.co.uk. Available at: https://www.thesun.co.uk/money/4609546/asda-has-quietly-upped-it-minimum-delivery-spend-for-some-shoppers-from-25-to-40-and-customers-are-furious/ [Accessed 3 Apr. 2018].
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Ross, D.F., 2015. Distribution Planning and control: managing in the era of supply chain management. Springer.
Smithers, R. (2016). Asda left me high and dry over failed wine delivery. [online] theguardian.com. Available at: https://www.theguardian.com/money/2016/aug/07/asda-cancelled-wine-delivery [Accessed 3 Apr. 2018].
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Wang, Y., Wallace, S.W., Shen, B. and Choi, T.M., 2015. Service supply chain management: A review of operational models. European Journal of Operational Research, 247(3), pp.685-698.
