Introduction -According to Kranz (1996) Supply Chain Management (SPM) is an effort involved in producing and delivering a final product from the supplier's supplier to the customer's customer. According to Christopher in 2005 Supply Chain Management is 'The management of upstream and downstream relationships between suppliers and customers to deliver superior customer value at less cost to supply chin as a whole'. Supply Chain Management is a modern way of managing the business and its relationships in order to result into a profitable outcome for all members of the chain. What is meant by the relationship in Supply Chain Management? It is the relationship between the manufacturer and the distributor and the customer or vice versa. Supply Chain Management is a uniform manner to deliver integrated management to the supply chain to meet the expectations and demands of the customers; from beginning to the end i.e. from suppliers of materials, production and to end customers. The requirement for Supply Chain Management has been recognised due to the increasing cost of transport, increase in outsourcers, and increase in globalisation. The increasing competition in the market has resulted in distributor and supplier work together to meet their customers' demands and to deduct their costs. The modern competitive business environment competition is high due to frequent and rapid changes in customer's demands, strongly divided markets where different clients have different necessity of services and products. Global prevailing competition which requires the company to become fast, better and cheap. The management concept of Supply Chain Management has been developed in the past two decades and now days many international organisations are following this concept such as - Nike, Gillette, Dell Computers and Nokia. Supply Chain Management is also known as value chain management.
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About The Company - Wm Morrison Plc is the fourth largest Retail supermarkets chain in the UK. The Company was founded by William Morrison in 1899. The company have achieved a huge success throughout its journey from a small stall in Bradford to a well known supermarket chain known all over the country. In 1958 the company opened its first shop in Bradford's town centre with three checkouts. And became the first shop in Bradford to have prices on their products and to provide self checkouts service. After two years the company opened its first supermarket in 500sq ft with parking facility. The company turned into public company in 1967 with 80000 investors. The company has continued its progress journey and become widely successful and opened its 100th store at Nelson in the year 1999. After showing a huge profits and growth for 35 years in the business the company's directors decided to join FTSE 100 for the very first time in April 2001. In 2005 company acquired the Rathbone bakery operation and save about 400 jobs. After two years the company wins the Grocer of the year award. The company acquired Safeway this is given to the company because of its dedication of putting the customers first. Now the company owns 403 stores across the UK. Additionally the company also owns 3 Abattoirs, 6 fruit and vegetable pack houses, 3 Bakeries and 1 food preparation factory. The main business of the company is based on the grocery and food products. Morrison now serves nine million customers in a week and has a staff force of 124,000 in their stores. The company has welcomed the concept of supply chain management suppliers and partners who are dedicated to give high quality service and work together for the customers well being.
Supply Chain Management and Logistics - According to the Council of logistics management logistics is basically that part of the SCM process which implement, plans and controls the effective flow of services, storage of goods from the starting point to the consumption point to meet the demands of the customers. Logistics was basically implemented by the military services to get the weapons and men in the battlefields in time for flights. After only few years it was appreciated by the modern markets as a new and advanced production process, Supply Chain Management concept has been explained differently by different writers and educators as an extension of logistics. But Supply Chain Management is not just limited to logistics but it is more than logistics. Logistics is meant by the co-operation between the suppliers, buyers and the manufacturers. The major focus of logistics is to reduce the total cost till serving the customers. Whereas Supply Chain Management focuses on its profitability on serving the customer's customer. Logistics can be used to achieve the cost and benefits value benefits.
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Issues - The Company is widely spread and purchases its material from the major suppliers around the world and then manufacturing process is done. This may result in complex purchasing system and poor flow of information between the supplies and the manufacturers. The company uses self transportation facilities and sometimes have to send a half loaded trucks to its stores to meet the customer's orders due to this the company has to bear extra cost and time. The company follows a Just In Time (JIT) method for its production procedure which means that the company keeps the inventory levels low which are sufficient to meet the customers demands. This policy will limit the number of goods produced and this may result in late deliveries and the customer might buy the goods from the other supermarket. The other problem in supply chain can be the location of the companies store as mentioned above the company have got only 1 food production factory which supplies material to its entire stores this may result in delays in deliveries and information.
Implications of Supply Chain on Society and environment- The economic growth and supply chain in the global markets has resulted in an explosion of trade. And due to the globalisation in the businesses like Morrison it results in leading us to global warming. The global warming is affecting the climate and the people's life by resulting in extreme climates situations, dislocation of businesses, agriculture and increase in living costs, sea levels rise and damage to natural habitats. Some of these effects are observed by us but others will come into existence soon. All these outcomes are affecting the society at a large scale and affecting the lives of people. In short the effects of these changes are long term and to avoid the consequences governments are taking appropriate steps. US had launched a non profit international organisation called SCC to measure the standards and needs of Supply Chain Management. Supply chains are coordinates on a wide scale for manufacturing, services and marketing of goods put a huge impact on the society and environment. These businesses are re-shaping in terms of technology and social economic development. These changes and redevelopment put an effect on everyone's life in both developing and industrialised countries. These chains are the central of the environmental changes and survival business policies. The climate changes have definitely put an impact related to the supply chains performance, lot of them face a danger in the market, includes the huge changes in the market structure. Additionally high transportation costs and risks, high insurance and energy costs.
How To Resolve the Issues- The Company should think of to bring its stores near to the suppliers point or supply point. This will result in less cost and time consumption. The company trades with the meat and fresh food products which are of highly perishable nature which might get damaged in the long transportation distances. Therefore if the company is having its production lines near to its suppliers this loss of damaged food can be avoided. The company may consider outsourcing the transportation as the company will only get charged for the goods send and not have o bear the expenses of sending a whole truck of their own. And the company utilize these resources to strengthen the chain process. Routine productions level check should be done in order to verify that the production level is not too high and not too low and should be equal to the level that is able to meet the company's customer's demands. The environmental issues should be properly recognised and future development strategies are to be made to avoid the consequences.
How Value is Created - Supply Chain Management is able to deliver competitive benefits to the companies' development and growth. The major focus of supply chain is to reduce the cost of delivery, warehousing, and supplier's material, to reduce the cost of the customers. Value is made for the customers and the stakeholders by following the method. This means putting the right customer's orders regularly for companies retail chains. It must be an ongoing process from the suppliers and the customers to generate value continuously. It should be managed continuously throughout the chain and not just for a short term. More outsourcing is recommended for delivery, transportation and purchases of goods in order to achieve cost reductions. According to the financial view logistics are cost centres and is hard to measure. Some cost of the supply chain appears in profit and loss a/c and others appears in balance sheet and some of the expenses are not appeared on the financial statements. The system also helps to achieve longer period sustainability and provides competitive benefits.
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System Requirements of Morrison's with push manufacturing system with lean and collaboration concepts - Push manufacturing system is meant by the system used to cope with make preset inventory levels or cope with the due dates of customers orders. Fact that makes the company different from the other supermarkets that is it buys directly from the source and the buying system does not consist of any middleman or broker. This results in proper flow of information between the company and its suppliers. Because of the reason that the company buys directly from the producers it responds quickly to the changing customer tastes, trends and changing seasons food products in their stores before the other supermarkets. By being closer to the source the company can influence the quality of its products. The company has also got its own manufacturing units which help to reduce the gaps and time between the supply chain. Additionally this also helps the company to save its cost and to reduce its waste. Logistics help the company to decrease the conflict and reduce the waste of material. It also helps to add to the value of the service offered. Additionally it generates an environment of continuous improvement. And also gives value for money to ourselves and our customers.
Lean Manufacturing - It is a system whose main aim is to remove the waste from the system with a continuous and systematic approach. Morrison follows the same system in their stores to reduce their wastes and to save its cost. Company uses lean manufacturing because it helps the company to produce a product using the least amount of value adding resource. This means that Morrison production is cheaper than that of its competitors. The models used by the company are mathematical so can be used by the company as many times as required by the company irrespective of the product manufactured. This system also helps to reduce the waiting time in the queue and minimum waiting time per customer. This manufacturing process is also known as continuous learning manufacturing process.
Collaboration Concepts - Converting the Supply Chain into a value chain requires the involvement and participation of all the parties both inside and outside the company Wholesalers, suppliers and logistics service providers. With the help of integration, visibility and collaboration the first step in put into its place. Integration, visibility and collaboration are mandatory and not optional to create and maintain the supply chain value. The collaborative, planning, forecasting and replenishment was firstly started in the mid nineties and this process is followed throughout the world. After the exposure of the retail sector supermarkets in the technological developments , the companies were in position to look out for new innovative ideas which help them to get into a superior position. Collaborative planning, forecasting and replenishment is very important tool to handle the implementations of various transactions among the agents. It also helps the company to maintain an efficient chain management. By the word collaboration means collaboration of two parties, individuals and companies. If any company collaborate with Morrison than both the companies have to compromise to achieve the company's goals as a whole. Forecasting is done to see the future requirements of the next period or the changes which are required to be done to meet the future customer's demands. By the free flow of information between the company (Morrison) and the suppliers the company can develop software which can order inventory on its own when the stock reaches inventory re-order level. This process will help in maintaining a minimum stock level at all times.
Information Technology System and E-Business - Information Technology's introduction in Morrison can lead the company to achieve better efficiency as compared to the existing logistics. Under the current procedure of managing the inventory company has to reserve a large space to put high volume of inventory for timely service to the customers. But integrated supply chain management use the information system and shared data base of supply chain which helps the system to identify the optimum inventory levels and saves the additional space and increase the inventory turnover. If the new integrated procedure is used properly then it will lead to high quality goods, effective machine utilization, less use of space and enhance the production process. The term E-business is derived from e-commerce and e-mail it is process of selling and buying goods through internet and also providing service and joining with business partners through internet. The term was used for the very first time in October 1997 by IBM. Now days all the major business organisations are using e-business to serve their customers. According to a survey only 16% of the businesses are using e-commerce at the moment. Many companies are thinking of implementing e-business model in their businesses. Many companies now have learnt how to use e-business and are providing service all over the world e.g. amazon.com. Morrison can also implement e-business model like its rivals supermarkets Tesco, Asda and Sainsbury. It will help the company to reach every customer at their home. The company should not only focus on selling and buying goods through e-businesses but also provide service to its clients with the help of its stores and suppliers. With the help of e-business the company will be able to detect the number of products sold at a certain period and able to detect the further production requirements of the company.
Control of Morrison in Effective Supply Chain- Many organisations have put their focus and efforts on creating sophisticated supply chain but some companies' results in lost of view of their own strengths, markets and their clients and are failing to comply with customers expectations. That is why it is important to understand the supply and demand chain before making decisions on its basis. According to the news in BJHC IM on 16 June 2010 NHS could have saved for itself £300 million by just improving its Supply Chain Management .But Morrison's have never loose their focus from their customers and their needs. The company policy is that the customer always comes first. Supply chain also put emphasis on customer focused efficiency. Morrison management is concern to deliver adequate service level and cost levels. Morrison also views the demand chain approach as a wider area of relationship management and efficiently manages and integrates both of them. The company have done a good research on the effectiveness of its supply chain and results in effective supply chain that reduces the gap between each department.
Conclusion - Supply chain management is a very helpful procedure to remain in the market in the global competitive market. Morrison should follow the system as an improvement to its previous systems. To survive in the today's competitive market Morrison should make regular changes to its supply chain. Additionally when the chain will grow then it will become easy for the companies branches to react promptly and efficiently. The company have also understood the importance of Supply Chain Management and had made the necessary changes in its company to implement the procedure. By implementing the supply chain the company will observe a dramatic improvement in their operations, leadership and business process. The company has to focus on business solutions using chain management systems and the company will observe business growth after the chain becomes mature. The system helps the organisations to reduce their cost factors and increase profits for the company. With the introduction of E-Business model the company will earn more revenues and once installed the systems will have a low operating cost. As we know that the company operates throughout the UK the profit realise from the E-business are going to be dramatic. In conclusion we can say that Supply Chain Management is a system which operates a flow of information and benefits between the supplier's supplier and customer's customer. By implementing the system and its objectives Morrison will definitely achieve a better manufacturing system and relationship with its suppliers and surely will increase its profits. So the implementation of the Integrated Supply chain information systems will not only help to increase the quality standard but also
Reduce delivery period and costs, and will also increase the company's position competitiveness for future growth.