Board of Governors
What Is The Excellence In Human Organization Management?
The report relates to Wesfarmersers Company in Australia. The company was formed to provide goods and other services to farmers living in Western Australia (Young, 2017). The company was listed in the Australia securities exchange, which resulted in a rapid growth in the company’s size. Wesfarmersers limited has headquarters in Perth, Western Australia. The company focusses most on the Australian chemicals, fertilisers and other farm safety products. Wesfarmersers is the largest company in Australia with an operating income of A$3.61 billion and revenues of up to A$65.98 billion. The company has set a trend in the Australian farming industry by providing consumers with high-quality products and new technology. The company has an approximate of 22000 employees who offer high-quality labour to the company. The company has created value for the shareholders and employees for many years (Donajgrodzki, 2018).
The company has a board of governors that make the decisions for the company. The board usually has a rich composition of members with mixed skills, expertise and experiences in various fields relevant to the running of the company. Additionally, the board has a good gender balance to promote diversity and prevent discrimination. The board has nine members with eight appointed as non-executive directors. The board has the duty of delivering strategic responsibilities, which include prioritising Wesfarmersers as a diverse company operating supermarkets, hotels, office supplies and manufacturing of farm produce. The management board ensures that the leadership has all the skill necessary and external experts fill shortages in expertise. The directors act independently in giving views and suggestions on how to meet the company objectives. However, the directors are required to refrain from any activities that compromise the focus on meeting the interests of the company. The governing of board activities follows the ASX principles, which spell out the powers and responsibilities of the directors. Furthermore, the company has a chief executive officer who links the company management to the board of directors. The CEO has the responsibility of communicating board decisions to the company and ensuring the implementation of the decisions by the company employees. The management style allows the employees to apply creativity and make decisions on various decisions affecting the work place. Each employee responds to a supervisor who checks the employees’ performances. The company has stayed ahead of other competing farms through the competent board of directors and an intelligent composition of employees (Ferrell, 2017).
Customer Base and Products
The company has major customers hailing from the west of Australia. Most of the customers buy the fertilizers and other farming chemicals. The company has developed a wide customer base with a strong loyalty to the brand by providing high-quality goods and services. The company sells fertilisers and farming chemicals to farmers on a wholesale and retail basis. The company aims at satisfying customers by availing products close to the customers. The west Australian farmers recognise the company as the number one supplier of farm products. Furthermore, the company also buys raw materials from the farmers including eggs, fresh fruits and meat (Fred R. David, 2016).
Wesfarmersers has a very transparent supply chain that avoids all forms of exploitations of unfair trading. The supply chain ensures the meeting of all ethical standards set by the company. Wesfarmers awards supply contracts to organisations that prove the ability to meet the high standards required by the company. The company buys from the farmers through contracted suppliers and directly from the suppliers. The contracted suppliers buy farm produce from the farmers who meet the necessary criteria set by the company. The suppliers then sell the products to the company, which then processes the products for sale. For example, the company buys milk from the farmers and then processes for sale through the Coles supermarket (Fred R. David, 2016).
The supply chain map is made up of tier one, which includes suppliers producing final products for resale and a tier two level of suppliers who produce supplies to go into the final products. Tier 2 develop components that improve the quality of products to satisfy the customers better (Giovani J.C, 2010).
The company fulfils the purchasing obligations through Coles, which deals directly with the suppliers. Coles ensures that all sellers meet the required quality of raw materials. The company has a policy of buying from Australian farmers first before considering suppliers from other regions or countries. The main materials sourced by the company include fresh milk and eggs from the farmers. The company requires that the products are 100 percent fresh to avoid rejection by the company. Coles assists the Australian farmers with long-term contracts and extensions occur after review of the performance by the procurement department. For example, the company has awarded a ten years contract to TOP Pork Pty Ltd which allows Victorian and South Australian farmers to supply fresh pork to the company (Government, 2017 ). Additionally, the company has a contract with Sundrop Farms for supplying fresh tomatoes and mangoes for a period of eight years, which is extendable depending on the quality of supplies. Additionally, Coles have milk-supplying contracts with companies such as Simplot, which runs to 2024, Coles also considers securing other overseas milk and vegetables supply contracts (Johansson, 2010).
Supply Chain Structure
The company processes the raw materials from the farmers and then brands the products for sale. The company processes the milk to butter, cheese, fresh milk and yoghurt. The milk passes through various operation stages to ensure high-quality outputs. The first stage is the milk quality check, which includes checking whether the milk has any defects such as harmful organisms causing diseases. The stage fulfils the quality policies, which demand that the milk offered to the market should not cause any kind of infection to the customers. After the quality check, the milk passes to the other stage, which is the processing stage. The processing stage involves various activities, which convert the milk to butter, cheeses, yoghurt and fresh milk. The final products reach the customers through the Coles supermarket. The Coles supermarket has an online platform where customers request the products and deliveries take place immediately (Juneja, 2018).
Additionally, the meat also passes through a similar sourcing procedure, which ensures the purchase of fresh and high quality meat only. The company buys from the contracted farmers who get advice on the company requirements. The farmers follow the set standards of rearing the animals such as for pigs, which require that the farms only use the gestation stalls for a period of 24 hours as opposed to the industrial allowance of ten days. The policy ensures that the pork is of high-quality and does not contract any diseases, which could affect the customers. The company’s manufacturing department processes pork to bacon. The final process is the branding of the products for sale at the Coles supermarket.
The supply chain adopted by the company fulfils all the ethical standards necessary. The suppliers are marked as low risk when supplying products from recognised brands. Wesfarmers does not tolerate the violation of human rights by the suppliers of goods and services. Moreover, the production system also protects the customers through the supply of non-contaminated products, which meet international standards (Kettner, 2013).
The current sourcing system requires improvements to eliminate errors in the supplied goods. The company should institute a more hands-on procedure when dealing with the farmers who produce the customers. Currently, the farmers deal with contracted suppliers who represent the company in price negotiations, which results to unsatisfied customers since some of the contractors buy produce at very low prices. Therefore, the company should meet and buy directly from the producers to enable the setting of a satisfactory product price. The company should try to eliminate the chains of supply that a product moves from the farmer to the production stage. The many levels result in an increase in the cost of acquisition of raw materials since each chain of supply inflates the price of the products. Therefore, the company should improve the procedures to benefit the farmer by eliminating exploitation and to reduce the operating expenses for the company (Mandviwalla, 2015).
Supply Chain Map
Likewise, the production system also requires improvement to ensure that the customers receive zero defects products. The production system should identify emerging contaminations that also affect the human beings. The current meat production has faced the problem of causing deadly flus to human beings for example, the swine and chicken flu. The production should have upgrades to ensure quick detection of new meat infections that could affect humans. The company should install new technology to the company that detects and corrects mistakes in the products (Nick, 2017).
Wesfarmersers main customers include the subsidiary supermarket with the brand name Coles. Coles supermarket buys more than 90% of the products produced by the company. The supermarket buys the products from Wesfarmersers and then brands the items before sale. The supermarket is among the largest retail shops in Australia. Therefore, the supermarket guarantees a great percentage of sales for the company due to the customer base (Nigel Slack, 2010).
Coles supermarket has an efficient supply chain system which allows cost saving, reduction of inventory and availability of goods for the customers. The supermarket uses the on time in full (OTIF) supply chain system, which refers to the suppliers availing the products at the right time and amount as required by the buyer. Therefore, Wesfarmers Company avails the fresh meat and milk products to the supermarket at the right time and amount. The supermarket informs the supermarket in case of stock shortages where the supermarket responds immediately with a dispatch of products to the supermarket. The supermarket collects the products from the Wesfarmers trucks and displays on the supermarket’s shelves for the customers to buy. The Coles supermarket does not have an inventory section since the products are availed by Wesfarmers on demand, which means that the supermarket does not experience shortages of items for sale on the supermarket’s shelves. The system is very economical due to the reduction in the costs of holding stock at the supermarket (Noe, 2014).
Additionally, the supermarket does not experience idle stock due to the ability to anticipate the correct demand. The supermarket accurately identifies the right amounts of products demanded by the customers and orders Wesfarmers to deliver the exact units (Robert J. Anderson, 2015).
The supply chain system used by Coles requires some upgrades to ensure efficiency and effectiveness in having products. The system should have better communications with the supplier to ensure faster deliveries of products. Sometimes the supermarket fails to have products quickly on the shelves due to the failure to communicate smoothly with the Wesfarmers suppliers. The supermarket should integrate technology into the ordering system that automatically notifies Wesfarmers of product shortages. The ordering system should inform Wesfarmers of the units of products required at the supermarket and at what time the product should reach the supermarket. The system will eliminate the errors caused by the reliance on human capital in checking the shelves for products and making orders. The errors cause expenses at the supermarket due to cases of ordering more products than required and ordering fewer products than required. The variances in orders result in shortages at the supermarket and having excess products at the supermarket, which strains the supermarket’s capacity. Therefore, a computerised ordering system is necessary to eliminate the errors present in the system (S.K Breja, 2011).
Raw Material Sourcing and Production Services
Furthermore, the supermarket should have a department that concentrates on ensuring the success of the supply chain system. The supermarket lacks such a department, which leads to poor linkages between the supermarket and Wesfarmers. A department dedicated to communications with the supplier ensures that instant communications that allow availability of products when needed. Additionally, the department will try to implement continuous improvement in the supply chain, which reduces the error rate of the system (Singleton, 2017).
Wesfarmers Company experiences high demand for the products from the large customer base. The company has developed strong customer loyalty, which results in customers demanding the product. However, the company has developed methods of dealing with the high demand to ensure that the customers access the right amounts of products. Likewise, the company has developed demand systems to enable the introduction of new products to the market (Terje Slatten, 2009).
Wesfarmers uses the system to forecast the required products to meet the demand in the market. The company must predict the correct amounts of demand and the specific products required by the customers. Therefore, Wesfarmers Company through the marketing department researches the quantities of products required by the products and gives the feedback to the operations department. The operations department then organises the production of the products to meet the demand. After production, Wesfarmers Company ensures that the products reach the market in time for the customers to access. The supermarket’s display the products on shelves for the customers to see and buy, which creates a demand for the products arising from the customers. The company has successfully used the system of demand management to increase the unit sales for the products. Moreover, the system has enabled the company to develop a strong customer loyalty, which strengthens the company’s brand (Terje Slatten, 2009).
Wesfarmers Company uses the pull demand system to deliver the right amounts of products to the market. The supermarket produces the exact amount of products required by the market without producing excesses. The products that reach the market conform to the exact requirements of the customers. Moreover, the pull management reduces wastage in production since the company only produces the units of products that the customers require. The demand happens based on the actual demand and not what the market forecasts. Therefore, the company does not incur the problem of overstocking products resulting from overproduction (Terje Slatten, 2009).
Wesfarmers uses the system to deliver products to the market only when the customers demand. The system is appropriate to the company due to the reduction of held inventory. The company waits for distribution signals from the buyer side and then delivers the products at the exact quantity and time required. The company has used the system successfully for a long period of time, which has resulted in various advantages such as cost saving due to the elimination of inventory holding costs. Additionally, the benefit of eliminating inventory has spread to the customers since Wesfarmersers supplies when the customers require the products. The practice has resulted in a strong customer loyalty for eliminating the costs of inventory (Terje Slatten, 2009).
Improvements in Sourcing and Production Systems
The company has implemented various inventory management systems over the years. The inventory system has adopted the current technologies to ensure safety and preservation of the products since most of the stock consists of perishables. The meat and milk inventories require care since mishandling could result in losses. Therefore, the company focusses most efforts in ensuring that the stock does not go bad. Additionally, the firm requires an inventory system that reduces the costs of holding stock (Ferrell, 2017).
The first in first out system focus on the movement of inventory by ensuring that stock moves out depending on the period purchased. Wesfarmers Company ensures that the milk and meat products processed first leave the inventory before the products processed later. The system asks for proper recording to identify the time that the items got into inventory. The inventory employees ensure the fulfilment of customer demand using the stock added before other units. Therefore, the company does not experience the problem of stock going bad or some units overstaying in the stores. Moreover, the system allows the company to deliver fresh products to the customers at all times (Ferrell, 2017).
Wesfarmers Company uses the EOQ model to identify the amount of inventory, which reduces the inventory holding and ordering costs. The inventory formula assists Wesfarmers in reducing costs incurred in handling inventory. The determination of holding costs allows Wesfarmers to estimate the right amount of inventory to keep without incurring excessive costs. The company communicates with the suppliers of raw materials to avail the right amounts of products that do not result in more costs than the economic quantities (Juneja, 2018).
Wesfarmers has incorporated information systems to the inventory management for automatic operations within the department. The information system integrates with the raw material suppliers’ information systems. The integration allows smooth communications between the company and supplier. The communications allow automatic signalling of the suppliers to deliver the required raw materials to the company. The company has used the system for some time and the benefits include reduction of costs of inventory and the reduction of shortages of raw materials (Juneja, 2018).
Conclusion
Wesfarmers is the largest company in Australia with a wide customer base. The company requires an efficient and effective supply chain system that results in the reduction of costs. Therefore, the various parties within the company require working as a team to ensure the success of a lean supply chain. Additionally, the company communicates with the stakeholder who includes the suppliers of raw materials and customers. The suppliers assist the company in implementing a successful supply chain system by availing materials just-in-time.
Wesfarmers supply chain system also allows technology integration to allow quick communications with the various players. The system signals the suppliers of any shortages in raw materials, which results in instant supply. Moreover, the system also receives signals of material shortages from customers, which allows the quick delivery of products.
References
Donajgrodzki, E. (2018). Product Integrity Commitment. Retrieved April 21, 2018, from TESCO PLC: https://www.tescoplc.com
Ferrell, O. M. (2017). Marketing Strategy. Texas: South-Western Cengage Learning.
Fred R. David, F. R. (2016). Strategic Management: A Competitive Advantage Approach, Concepts and Cases (16 ed.). Pearson.
Giovani J.C, R. S. (2010). International Journal of Operations. Operations and Production Management.
Government, A. (2017 ). Australia Competition and Consumer Commission. Retrieved August 15, 2017, from https://www.accc.gov.au
James Michael Stewart, M. C. (2015). Certified Information Systems Security Professional. Sybex.
Johansson, J. K. (2010). Global Marketing Strategy. Wiley Online Library, 1(1), 5. doi:10.1002
Juneja. (2018). Management Study Guide. Retrieved from Management Study Guide Website: https://www.managementstudyguide.com
Kettner, P. M. (2013). Excellence in Human Service Organization Management. Pearson.
Mandviwalla, M. (2015, March 19). Fox School of Business . Retrieved from Fox School of Business Website: https://www.community.mis.temple.edu
Nick, C. (2017). Canned, Frozen and Fresh Food Market Research. Retrieved 2018, from https://www.store.mintel.com
Nigel Slack, S. C. (2010). Operations Management. Madrid, Spain: Pearson.
Noe, H. (2014). Human Resource Management. Mcgraw Hill Education.
Robert J. Anderson, W. A. (2015). Mastering Leadership. Newyork: Wiley.
S.K Breja, D. B. (2011). The TQM Journal.
Singleton, R. A. (2017). Approaches to Social Research. Oxford University Press.
Terje Slatten, M. M. (2009). Managing Service Quality.
Young, E. &. (2017). Wesfarmers. Retrieved May 6, 2018, from sustainability.Wesfarmersers.com.au
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
