Target Australia Supply Chain Management

Supply Chain Management in Target Australia

Supply chain management is vital for operational success among organisations in various sectors. Target Australia has maintained its operations through a supply chain process that is customer-centric. The organisation believes in a supply chain process that focuses on meeting the tastes and preferences of their clientele. Therefore, compressing the operational costs through the establishment of distribution centres that double up as warehouses, leads to the reduction in expenses hence assuring customers of low prices of goods and services.

Collaborative Initiatives with Suppliers

On the other hand, building on collaborative initiatives with their suppliers has had a positive outcome for the organisation in their supply chain management process. The organisation believes in their suppliers and collaborative initiatives are inclusive of both financial and informational support to improve the supply chain process. As a clear example, the organisation provides financial aid to farmers in periods of drought to ensure that they can meet the organisation’s demand for agricultural products. Further, the organisation sensitizes their suppliers on the need for sustainable approaches towards the management of the environment.

Tracking and Lean Supply Chain Management

Nonetheless, the company has been lagging behind in tracking their products to counter the sporadic Australian climate. Investing in lean supply chain management policy is bound to heighten mechanization of operations and adoption of technology which is essential in improving efficiency and reducing costs.

Supply Chain Management

Making positive strides in world-class supply chain process is a demanding and daunting process in achieving customer-oriented goals for retail organizations. Target Australia operates in a market that is cosmopolitan and the need to meet the specific customer tastes and preferences relies on efficiency in the supply chain process. Designing and operating a strategic supply chain process is a major requirement at Target Australia in delivering precision in the provision of goods and services. To maintain success in the supply chain strategy, the organisation adopts a supply chain approach that is based on process improvement. With inventory from both the local and international markets, the need to harmonize the supply chain process is essential to ensure timely provision of goods and services. Therefore, this report aims at evaluating the supply chain process at Target Australia, agility, responsiveness, risk management and sustainability. At the culmination of the report, an in-depth evaluation of the recommendations should provide a way forward for Target Australia.

Organisation overview and Supply Chain process

Founded in 1926, Target Australia remains one of the largest department store chains. Operating throughout the nation, the retailer comprises 302 stores (Waters and Rinsler 2014, p. 90). Within the operational dimension, the store has diverse product brands from clothes to homeware, electronics, and goods.  As a mid-priced store chain owned by Wesfarmers, the business focus has been on ensuring that they command a large customer base and embark on an innovative supply chain process. Therefore, the customer first policy at Target Australia has generated an environment whereby cooperative relations with nearly 20,000 suppliers are critical for profitable outcomes. To maintain a localized and globalized approach to sourcing products the organisation has invested in four dimensions of the supply chain process.

Customer Centric Approach to Product and Service Provision

The organizational management makes considerable emphasis on the customers as the pillar towards successful operations.  Therefore, the different stores ought to be a one-stop shop for the customers. Striving for holistic changes and features of the commodities on offer is at the core of the organizational supply process (Waters and Rinsler 2014, p. 90). Product variety in a nation that has potential customers of a different culture is essential to completely meet the various tastes and preferences. In regards to guaranteeing low prices, the organisation painstakingly invests in first class product and service sourcing. Through the financial strength of their owners, Wesfarmers, the organisation invests in numerous fleets of vehicles to necessitate efficiency in the inbound logistics process. After the goods reach the distribution centre, the organization repackages and upgrades them in accordance with the standards set in Australia (Broadhurst 2015, p. 61). Through the distribution centre, the organization manages to save warehouse costs that can reduce profitability levels. To guarantee low prices of the commodities, the business compresses the goods costs by controlling both the marketing and distribution costs. The potential competitive environment presents the need for low-cost pricing which depends on efficiency in the inbound logistics management at Target Australia. 

Supplier Management

Suppliers are fundamental stakeholders within the organizational supply chain. Through the suppliers, provision of the goods is bound to prevail which is essential in the performance management process. The suppliers at Target Australia are a vital element the supply chain process since the organisation believes in the eradication of the middlemen. Through the technological progress, the organisation has improved the relationships with their suppliers via real-time communication and the establishment of the operational guidelines that should be followed. The emphasis on a communication network that necessitates electronic data interchange tactic in sharing information with the suppliers, the company has effectively established a collaborative relationship with the suppliers (Wisner, Tan, and Leong 2014, p. 38). At Target Australia’s headquarters, similar to retailers such as Wal-Mart, the organisation provides facilities to some of their suppliers.  An avenue for the big suppliers to showcase their products and make arrangements in the product delivery process is evident at the organizational headquarters. Therefore, the supplier management process at Target Australia centers on establishing long-term relationships that focus on goods that meet the clientele requirements.

Logistic Management Systems

The local and international environment provides challenges for organizations in their management of supply chain processes. Realizing the need for commodity distribution effectively can be a source of competitive edge is clear from the analysis of Target Australia. The organisation focuses on large sales volumes while reducing the inventory costs (Christopher 2016, p. 73). Therefore, the business establishes its logistics distribution system that ascertains reliable product delivery and cost management. Target Australia has a classic logistics distribution system in the nation. Compressing the operational costs entails various innovative approaches such as investing in eco-friendly trucks, recycling technology in their distribution centres and an Enterprise Resource Planning (ERP) system (Wisner, Tan, and Leong 2014, p. 38). As an example, the ERP system at Target Australia enables for the company to track its products from the moment they leave the supplier premise to their distribution centre.

Marketing Strategies

Marketing is essential for brand awareness. As a non-traditional element of the supply chain process, Target Australia emphasizes its alignment to operations to ascertain its customer product and service delivery process. Therefore, the location strategy in the marketing process takes the centre stage in their supply chain activities (Wisner, et al. 2014, p. 38). The company’s numerous stores operate in the expansive Australian nation where the diversity in customer tastes and preferences are central to the marketing strategy. Marketing the products available to suit the clientele demand is a successful initiative that has led to the effective management of the product distribution process. 

Supply Chain Agility and Responsiveness

Responding to the potential hurdles that can face an organisation is essential for success in the supply chain process. The supply chain process at Target Australia depends on process improvement in dealing with the customer needs. Hence, in line with responding to potential issues such as a delay in the goods on transit to the organisation, the prospect of fostering innovation and building on the supplier relationship is evident at Target Australia (Charles, Schmidheiny, and Watts 2017, p. 78). The organisation is quick to focus on lean supply chain management strategy in ensuring responsiveness. Emphasizing on technological reform that ensures information intelligence about the goods and services available on the distribution centers is at the core of the organizational operations (Wisner, Tan, and Leong 2014, p. 38). As a clear example, Target Australia was among the first organizations to introduce RFID. The technology incorporates the radio barcodes effectively to scan and track the product throughout the supply chain process. Through the introduction of the technology, unique competitive advantage has become evident in assuring real-time response to potential challenges. Three different aspects of agility and responsiveness are outright; effective customer services, work efficiency and reliable supply chain system. Through the continued investment into technology, the company can quickly project the goods in the distribution centers, make plans to allocate to the different stores and project the demand levels of the clientele. The unique advantage that RFID provides is critical towards heightening the level of reliability within the retail sector (Charles, et al. 2017, p. 78). Efficiency in tracking the products provides a mutually beneficial environment between the supplier and the organisation in responding to consumer demands. The suppliers have access to the RFID information about the products in the distribution centers and can effectively plan on how to replenish the organisation’s stock levels.

Supply Chain Risk Management

Supply chain process is a challenge for organizations that operate in large nations such as Australia. Further, the prospect that Target Australia outsources some of their products globally presents a challenging environment in their operational process. Across Australia, the climatic challenges present significant hurdles in the risk management process. The nation is prone to natural disasters such as typhoons, drought and floods. Through the disaster, they are bound to negatively impact on the supply chain process.  Prospects of increased costs of sourcing the products can have dire implications on the organizational profitability. Therefore, throughout the operational process, Target Australia invests considerably into risk management.  As opposed to the traditional forms of risk management that focus on countering potential obstacles in the supplier contracts, mitigating natural disasters is impossible. Therefore, there are many dimensions of risk management that can impact on the organizational supply chain process (Monczka et al. 2015, p. 126). At Target Australia, the management invests into long-term capacity building coupled with adaptive strategies. Specifically, in the sourcing of foods and beverages, it is evident that the prospect of climate change has the potential to disrupt the crop yields. Evident from the drought that faced the nation, the company had to endure a period of reduced supplies of agricultural products. Through the disruption, the organisation had to seek products from global partners (Monczka et al. 2015, p. 126). The response was based on the organizational risk management policy. Within the business framework, Target Australia invests considerably on negotiated contracts with global suppliers on the potential to increase the supply quotas in the instance of disruptions in the local markets.

Further, in their supplier collaboration framework, Target Australia invests considerably into strategic alliances with the farmers. The organisation considerably relies on the farmers for the supply of agricultural products. Therefore, the notion of farmers facing hard times due to climatic change led to the organizational investment in the strategic alliance framework that depends on providing sustainable solutions (Monczka et al. 2015, p. 126). The organisation, in a bid to counter the potential of reduced agricultural supplies, offers financial loans to farmers coupled with ideas that can assist the farmers in dealing with climate volatility. In addition, the organisation invests highly in the potential strategies for farmers to increase plant resilience to drought and ensuring the farmers have a market for their animal products (Christopher 2016, p. 73). The focus of Target Australia on risk management denotes focusing on offering viable solutions to the farmers on how to counter the impact of climatic change on their products while ensuring preparedness for potential supply shortage within the local market. 

Supply Chain Sustainability

The contemporary environment calls for management to examine the complicated changes within the social, economic, technological and environmental trends that can influence the supply chain process. For organizational alignment to the ongoing trends, it is critical to invest in sophisticated initiatives towards sustainable management of operations (Whelan and Fink 2016, p. 6). The reluctance of organizations to adopt sustainability at the core of the supply chain process can lead to negative outcomes on the bottom-line. Therefore, to maintain successful outcomes, organizations such as Target Australia invest in various approaches to ensure sustainable initiatives in the supply chain process.

Stakeholder Engagement

The contemporary business model depends on stakeholder involvement in making long-term decisions.  Involvement of the stakeholders has the potential to redefine the business ecosystems through developing strategies that create value for all. Among the essential stakeholders are shareholders, supply chains, society and employees (Whelan and Fink 2016, p. 6). For Target Australia the stakeholder involvement has been based on communication and collaboration. Pioneering the ideas of shared value within the organizational spectrum of operations has repositioned the organisation in the public limelight (Schaltegger and Wagner 2017, p. 102). The business believes in consistent communication with the suppliers on the market trends to develop necessary strategies to maintain a competitive edge. Among the key issues that have redefined the communication process include the need for environmental sustainability, deviation from unethical practices and focus on assertive principles in the execution of responsibilities (Schaltegger and Wagner 2017, p. 102). The strategic value that the sustainability communication process generates can be evident from the organizational stance about global warming, child labor use and the need for diversity management in the employment process.  Continuous dialogue with the stakeholders coupled with continued interaction has led to the development of the sustainability agenda that circumvents long-term management of the underlying issues. On the other hand, collaboration in the sustainability management process entails the involvement of shareholders and customers in various ongoing organizational initiatives.

Target Australia believes in good relationships as the foundation for implementing sustainable policies that can ascertain its position in future. As an example, the company collaborates with various local people in a bid to promote sustainable initiatives in the waste disposal process. In a market whereby non-biodegradable waste is an issue of concern, sensitizing the customers on the need to differentiate their rubbish is necessary for the promotion of recycling. Further, to meet the global call for sustainable supply chain processes, the business invests into biodegradable packages. As opposed to plastic bags, the business has been steadfast at encouraging their customers and suppliers to use biodegradable packages (Schaltegger and Wagner 2017, p. 102). As an example, the organisation offers discounts to the customers who re-use the biodegradable bags. On the other hand, to promote sustainability in the supply chain continued collaboration with the suppliers has led to investing in technologies that promote a clean environment. Refrigeration, recycling and re-use are the policies that the organisation has successfully collaborated with their suppliers in the adoption process.

Conformity to the Australian Regulations

The Australian government has taken a central role in the environmental management process.  The direct involvement in the sustainable approaches adopted by businesses to manage the environment has led to businesses transforming their operations (Schaltegger and Wagner 2017, p. 102). Through the government involvement, Target Australia embarks on effective data mining on regulations and implementing them across the organizational spectrum. The focus on the complementary Australian policies coupled with market regulations translates into the business emphasis on emission reduction. Across Australia, the prospect of global warming remains a significant issue that has led to the sporadic weather patterns that are deadly in most instances (Coyle et al. 2016, p 72). Taking part in the global warming debate has led to Target Australia implementing comprehensive measures such as re-evaluation of their stores and how the reduction of the carbon footprint can prevail. The organisation minimizes the carbon emissions through energy-saving technologies in their lighting, refrigeration and packaging process.  As an example, the business no-longer use carbon-based refrigerators. Further, the company is strict at conforming to the Australian Renewable Energy Target scheme that focuses on organizational changes that promote the wellbeing of the environment.

Recommendations and Conclusions

Target Australia successfully relies on the customer-centric approach in the supply chain process. Nonetheless, the organisation does not define the tactical approach implemented in the supply chain management process. An in-depth analysis of the interactive process with their stakeholders reveals that the organisation should invest extensively in lean supply chain process. The lean supply chain management entails the simplification of all the processes of supplier-organisation collaboration to eradicate the unnecessary elements and minimize waste. Through effective management, the organisation should launch a comprehensive data mining process that depends highly on information about lean management procedures. The focus on cost reduction and improvement of efficiencies such as the reduction of the touch points and increase in the machine utilization across the distribution centers are some of the choices that the organisation will have to make. At the centre of the organization is the need to deal with the unpredictable climate those impacts on the access to various products and services. Therefore, the focus on machine utilization is bound to reduce lead time and provide information on the current products for decision making. The introduction of a continuous replenishment system should be an enabling strategy towards mitigating the risks of the operation. Through the replenishment system, the prospect of comparative advantage will originate from the point of sale data. The real-time sales information is essential for the organizational decision-making about product availability.  Reforming the supply chain process via technology has the potential to generate a timely and continued replenishment of the organizational stocks that can lead to customer access to the products regularly. Further, the potential for customer retention is bound to emerge since customers can depend on the organisation to meet their tastes and preferences.

References

Broadhurst, L., Driver, M., Guja, L., North, T., Vanzella, B., Fifield, G., Bruce, S., Taylor, D. & Bush, D., 2015.Seeding the future–the issues of supply and demand for restoration in Australia.Ecological Management & Restoration, 16(1), pp.29-32.

Charles Jr, O.H., Schmidheiny, S. & Watts, P., 2017. Walking the talk: The business case for sustainable development.Routledge.

Christopher, M., 2016. Logistics & supply chain management. Pearson UK.

Coyle, J.J., Langley, C.J., Novack, R.A. & Gibson, B., 2016. Supply chain management: a logistics perspective. Nelson Education.

Monczka, R.M., Handfield, R.B., Giunipero, L.C. & Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.

Schaltegger, S. & Wagner, M., 2017. Managing the business case for sustainability: The integration of social, environmental and economic performance.Routledge.

Waters, D. & Rinsler, S., 2014. Global logistics: New directions in supply chain management. Kogan Page Publishers.

Whelan, T. & Fink, C., 2016.The comprehensive business case for sustainability. Harvard Business Review, 21, p.2-8.

Wisner, J.D., Tan, K.C. & Leong, G.K., 2014. Principles of supply chain management: A balanced approach. Cengage Learning.