Logistic management is one of the most effective way through which an organization gain efficiency in order to perform well. Logistic management helps in managing the supply of good in an organization. the concept of logistic management is gaining importance in current context where large sized business organization are focusing on managing the logistics in order to supply raw material and finished goods from the warehouse to the stores. It is mainly due to the fact the logistic supply of goods and services is been gaining importance in the today’s scenario where organization are trying to reduce the wastage of cost in transferring the goods from one place to other (Christopher, 2016; Schönsleben, 2007).
The report is regarding the famous multi-national retailer of furniture, bedding, computer and consumer electronic goods. Harvey Norman is a company that owns manufacturing, retailing and operations. It controls all the channels to operate the system. The store is mainly operating on the franchise basis. The Store is owned by the Harvey Norman Holdings Limited. In 2016 there were 280 stores in Australia Company owned by the franchised store in Australia, New Zealand, Europe, and South East Asia. The multi brand store has coordinated its functions with different Retailers in Australia. The company has a well managed logistics system that has helped in providing the goods and services in an effective manner (Ballou,2007).
Company’s Overview
Harvey Norman is a famous multi-national retailer of furniture, bedding, computer and consumer electronic goods. The store is mainly operating on the franchise basis. The store was founded by Gerry Harvey and Ian Norman in the year 1961. Since the company is consistently providing consumer durable electronic goods. The purpose of the company is to expand the number of retail stores across Australia and other countries where they are working. The stores are currently owned by the Harvey Norman Holdings Limited and listed at the Australian Stock Exchange.
The company has streamlined all its automated purchase order in between the franchises and supplies (Dunn,2016). They are currently improvising on the Electronic data Interchange in order to manage their logistic supply. The software suit used by the company is effectively managing the overall processing unit in order to reduce the lead time in the store. This has helped in streamlining the supply chain operations in order to manage the overall operations. In past the franchisee has to print out the fax in order to send purchase order now the EDI system has effectively helped in managing the entire purchase order process(Shetty,2011). This system has already benefitted the company but due to current competitive pressure and a pressure from the global company it has become necessary to channelize the supply chain management process in order to retrieve maximum benefit (Bozarth, Handfield and Weiss, 2008).
Organization’s effectiveness
Being the largest franchise store in Australia the company is consistently working on creating a distinguished model of supply chain management. The purpose is to provide goods in appropriate time-period. The store is specialized in electronic goods and is consistently focusing in managing the logistic system (Monczka, Handfield, Giunipero and Patterson, 2015). Most of the process at the Harvey Norman is based on franchise process where the company is managing their sales by collaborating with the small retailers. In such a multifaceted business atmosphere this has become important for the organization to manage the supply chain effectively. In order to understand the logistic supply it is necessary to understand the current procedure followed in the company(Solomon et al 2013). Planning any decision pertaining to the supply chain requires at least three decisions:
It is essential to measure the conventional marketing system that help in channelizing the distribution system at all the level. The distribution system takes place in three ways: conventional, vertical or horizontal. Harvey Norman is following a vertical marketing system where a company owns manufacturing, retailing and operations and controls all the channels. Harvey Norman is using this system to manage the nationwide network (Dyckhoff, Lackes and Reese, 2013). In this manner they are consistently managing the overall procedure in order to retrieve maximum results (Melo, Nickel and Saldanha-Da-Gama,2009).
The purpose of the organization is to make available the goods on time to the consumers by keeping effective relationship with the retailers. The purpose of Harvey Norman is managing the supply chain effectively by dealing with the Retailers in an effective manner. Aligning the requirements of the company with that of the customers and providing the goods within the time limit is essential. In the recent time Harvey Norman is efficiently developing the supply chain by supplying the goods within 3 hours of the order.
For the purpose company has teamed up with Shippit’s Proprietary. This has effectively helped in connecting with the online retailers to the traditional courier companies. It is the first major retailer to offer three hours delivery across the nation. This new mechanism has helped the company in managing the delivery of goods within in the time period from 7 am to 10 pm weekdays. The option related to delivery into the payment screen and cost is determined depending upon the day of products arrival (Harvey Norman streamlines supply chain with automated purchase order process.2010).
Harvey Norman has deployed Sterling Collaboration Network to control all purchase orders that are taken in between the franchises and suppliers. The company is effectively trying to coordinate the function in between the supplier and the franchisee. The EDI system in the company has effectively helped in managing the movement of goods. This process has helped in managing the purchase order process in real time. In this way the company is reducing the lead time in the store and can manage the supplies in an effective manner (Jonsson, 2008). Harvey Norman has recently upgraded to the 5.0 in order to take advantage of B2B suppliers on boarding capability.
They are planning to bring on board 2000 suppliers in order to handle the EDI standards. They will seek the benefit from the quicker processing of the orders. This will reduce the environmental impact and will translate the shorter lead time to the store. The automation of the manual task will save time of 100 of workers across the franchise store. The Store is owned by the Harvey Norman Holdings Limited. In 2016 there were 280 stores in Australia Company owned by the franchised store in Australia, New Zealand, Europe, and South East Asia.
In the past 12 years Harvey Norman has expanded its presence in countries like Malaysia, Singapore, Slovenia, Ireland and New Zealand. Most of the electrical supply taking place in the company is EDI ready. This mechanism has helped Harvey Norman in dealing with the situation in an effective manner(Harvey Norman implements automated purchase ordering process.2012). In the time being the company has to focus on managing the sources of dealing with the different consumer goods. In case of international sale of goods it is essential to develop effective relationship with the international suppliers. This will however help in managing the organizational resources effectively. Being the trading company Harvey Norman has to effectively manage relationship with the suppliers.
In the international operations it is essential to manage the operations in an effective manner so that the company can manage the resources in an effective manner. The purpose of the company is to have retailers located in almost all the places of their operation. This will help in supplying goods in an effective manner. The presence of supplier and effective logistic operations has helped the company in gaining efficacy. Harvey Norman is however managing all the operations that include manufacturing and retailing. Harvey Norman is using this system to manage the nationwide network. By channelizing the logistic system it is more important to develop effective logistic operations (Fernie and Sparks, 2014). In this manner the company can earn an effective place. This system has already benefitted the company but due to current competitive pressure and a pressure from the global company it has become necessary to channelize the supply chain management process (Van Weele, 2009).
Location methods plus the decisions
The decision related to the location is important for an organization for providing goods in an effective manner. The location of the suppliers needs to be in an effective manner so that the goods are easily reachable. The goods can only reach to the customers if the location they are situated is appropriate. Otherwise it is necessary to develop an effective supply chain so that the goods can be supplied to the consumers. The decision related to the location the company has an advantage that it has to manage all its operations on the basis Of EDI.
There should be an effective relationship in between the company and the supplier. The most importantly the organization has to use the data in an appropriate manner where the overall system is connected with the centralized system. The decision related to the organization procurement process is retrieved at the centralized system. Harvey Norman has upgraded to the 5.0 in order to take advantage of B2B suppliers on boarding capability. They are planning to bring on board 2000 suppliers in order to handle the EDI standards. In this manner it is evident that the company has been using the most effective supply chain mechanism in order to manage the goods(Waters,2011).
Recommendations
It is highly recommended that Harvey Norman need to improve the centralized system of managing the simply chain… the logistic operation include the management of inventory which is only possible if they are utilizing the latest software. The suppliers need to be connected with the centralized system in order to attain the benefit from the system. The purpose is to meet the requirements of the consumers located at the different place.
Meanwhile it is important for them to balance the goods at the time of exchange process. In this case it is the role of the centralized mechanism to provide information to the supplier who has an authority to manage the situation. Aligning the requirements of the company with that of the customers and providing the goods within the time limit is essential. They however need to focus on providing goods at the doorstep within few hours of order not in Australia but in other countries of operation. This will provide the company with a competitive edge over the other local and global companies (Pettit, Fiksel and Croxton, 2010; Russell and Taylor 2008).
Conclusion
To conclude it is essential for a company like Harvey Norman to strengthen its Supply chain mechanism in order to manage the supply of goods. This is important to notice that It is mainly due to the fact the logistic supply of goods and services is been gaining importance in the today’s scenario where organization are trying to reduce the wastage of cost in transferring the goods from one place to other. The company is currently using the procedure of EDI that include transfer of goods in an electronic way. In the system the order are retrieved in a centralized system and flows to the nearest supplier available to the consumers.
The suppliers need to be connected with the centralized system in order to attain the benefit from the system. The company in order to create a competitive position in the market needs to develop comprehensive strategies that will help them to develop. The purpose of Harvey Norman is managing the supply chain effectively by dealing with the Retailers in an effective manner.
The automation of the manual task will save time of 100 of workers across the franchise store. The Store is owned by the Harvey Norman Holdings Limited. The overall system has helped the company in gaining a competitive position in the market. However it is recommended to the company that the need to implement the similar mechanism in other countries of operation as well.
References
Ballou, R.H., 2007. Business logistics/supply chain management: planning, organizing, and controlling the supply chain. Pearson Education India.
Bozarth, C.C., Handfield, R.B. and Weiss, H.J., 2008. Introduction to operations and supply chain management. Upper Saddle River, NJ: Pearson Prentice Hall.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dunn, M.2016. Harvey Norman now offering three hour delivery to customers in major capital cities. Online. Available at: https://www.news.com.au/technology/innovation/inventions/harvey-norman-now-offering-three-hour-delivery-to-customers-in-major-capital-cities/news-story/b746a8b8853afe3553250f18d6d000a4 Accessed on: 22 March 2017
Dyckhoff, H., Lackes, R. and Reese, J. eds., 2013. Supply chain management and reverse logistics. Springer Science & Business Media.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
Harvey Norman implements automated purchase ordering process.2012. Online. Available at: https://www.tandlnews.com.au/2012/01/17/article/harvey-norman-implements-automated-purchase-ordering-process/ Accessed on: 22 March 2017
Harvey Norman streamlines supply chain with automated purchase order process.2010. Online. Available at: https://logisticsmagazine.com.au/harvey-norman-streamlines-supply-chain-with-automated-purchase-order-process-3/ Accessed on: 22 March 2017
Jonsson, P., 2008. Logistics and supply chain management. London: McGraw-Hill Higher Education.
Melo, M.T., Nickel, S. and Saldanha-Da-Gama, F., 2009. Facility location and supply chain management–A review. European journal of operational research, 196 (2), pp.401-412.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
Pettit, T.J., Fiksel, J. and Croxton, K.L., 2010. Ensuring supply chain resilience: development of a conceptual framework. Journal of business logistics, 31(1), pp.1-21.
Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.
Russell, R.S. and Taylor-Iii, B.W., 2008. Operations management along the supply chain. John Wiley & Sons
Schönsleben, P., 2007. Integral logistics management: Operations and supply chain management in comprehensive value-added networks. CRC Press.
Shetty, N.2011. Supply Chain Management of Harvey Norman Holdings Ltd. Online. Available at: https://www.managementparadise.com/forums/elements-logistics/212497-supply-chain-management-harvey-norman-holdings-ltd.html Accessed on: 22 March 2017
Solomon,M. et al 2013. Marketing: Real People, Real Choices. Pearson Higher Education AU, 2013
Van Weele, A.J., 2009. Purchasing & supply chain management: analysis, strategy, planning and practice. Cengage Learning EMEA.
Waters, D., 2011. Supply chain risk management: vulnerability and resilience in logistics. Kogan Page Publishers.
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