Research Paper: Organization Behavior Internal Supply Chain

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[. . .] Like other retail businesses, Harvey Norman also gives strong emphasis on efficient inventory management by its purchase and sales department. It is the prime responsibility of the sales department to calculate, analyze, and communicate the actual demand of different products in the company's product lines to the Purchase department (Agrawal & Smith 2009). Due to the ever-changing customer requirements and seasonal affects, every product line has different demand in different seasons. Therefore, the Sales department performs this analysis on periodical basis. The Purchase department makes assessment of the availability and costs of the inventory and potential suppliers in the market for an efficient and cost-effective purchase process. All these processes are carried out in order to ensure efficiency in the overall business operations (Harvey Norman 2012).

3. Continuous Growth of Operations:

The third most important aspect of efficiency is the continuous growth of business operations. A company cannot be called an active and competitive participant in the industry if it does not grow its operations with the passage of time. The number of physical outlets of Harvey Norman has reached 230 in a period of three decades (Harvey Norman 2012). This expanding network shows the strength of Harvey Norman in its industry. The secret behind this growth is the efficient operational and financial performance which company has been showing since its formation. The high sales revenues, strong customer base, high level of customer satisfaction, and confidence of supply chain members on the company are the major contributors in this continuous growth strategy. For instance, the major contribution in the company's growth is made by the large scale stores which are operative in highly populated areas. These stores have captured a big share from the market which helps them in making a big contribution to the company's sales revenues and profitability.

COMMON PRACTICES IN SUPPLY CHAIN Management

The main supply chain members for Harvey Norman are product manufacturers, distributors, marketing and promotional firms, and business development firms. The strongest supply chain relationships of the company are developed with the product manufacturers and wholesalers which sell their products at very reasonable prices. Harvey Norman has a broad supply chain network which helps it in analyzing the difference in prices and contacting the suppliers which charge the least margin for their products. Harvey Norman places almost all categories of consumer goods which come from top brands as well as from new businesses. Another common practice is the differentiation of products according to their supplier's brand image in the market. For example, if a product is purchased from a well-recognized brand, the sales staff also suggests that product to the customers. On the other hand, if some unknown brand places its product for promotion, the staff does not guarantee its high sales (Lancaster & Withey 2007).

The distributors of the company are responsible to deliver its products to its outlets throughout the country. They are also paid extra commission if they find new potential markets for the company's business and growth strategies in the future. The distributors are chosen on the basis of their recognition and past performance in the same industry (Ellwood 2002).

INNOVATION IN PRODUCTS WITH THE HELP OF SUPPLY CHAIN MEMBERS

Harvey Norman has boost up the process of continuous improvement in its business operations for the last few years. The most recent development in this regard is the purchase of Sterling Business Integration Suite for automating purchase orders which are placed by franchised outlets from the company's suppliers (Channel News 2010). This business integration suit facilitates the franchised outlets in making their operations well-organized and more efficient than before (Logisticsit, 2010). It also reduces the lead time for every new order which results in quicker delivery of products at the outlets (Paley, 2006). The suppliers also help the company in bringing improvements in its existing product lines (Lancaster & Withey 2007). For example, the suppliers of raw material provide the highest quality raw material to produce the best products for the customers. Similarly, the product manufacturers keep on bringing improvements in the features, attributes, and packaging of their products so that the popularity of these products does not go down in the Harvey Norman stores (Bamford & Forrester 2010).

Harvey Norman also keeps the latest models of consumer and electronic products at its physical and online stores. When customers visit its physical outlets or website, they get the latest information about their favorite brands. Thus, the biggest role in the innovative product offerings is played by the company's internal and external supply chain members who provide superior customer services at the stores and deliver high quality raw material and finished products, make on-time deliveries, use highly advanced computerize systems for quicker order processing, and ensure regular supplies to the company throughout the year (Kurtz, MacKenzie, & Snow 2010).

RECOMMENDATIONS FOR IMPROVEMENT IN THE SUPPLY CHAIN OPERATION

1. on-time Delivery:

First of all, Harvey Norman should ensure that its suppliers deliver the supplies of their products on time. The retail stores must not run short of high and medium shelve products. The supplies must reach at all retail stores according their customer traffic, sales volume, and demand for the products. For on-time delivery of products at the warehouses and retail outlets, the distributors should be made equally responsible. Harvey Norman should ensure that its order delivery time is not just short; it must be the shortest among all its competitors. The distributors can be paid extra commission for quicker deliveries to farther destinations in the country (Bamford & Forrester 2010).

2. Support to Supply Chain Members:

The best way to improve the supply chain relations is keeping an eye on the financial conditions of supply chain members and the environmental factors that affect their businesses. For Harvey Norman to improve its supply chain operations, it is vital to build strong relationships with every supplier and manufacturer. It should increase their sales by promoting their products on its website, and in retail stores through in-store displays. If the financial conditions of some supplier or distributor are not feasible to operate at a larger scale, Harvey Norman should allow them to supply small orders. Moreover, Harvey Norman can pay extra commission and bonuses to suppliers, distributors, and business development firms on exceptional performance during a particular period of time. It will also help the company in strengthening its business relationships with these key supply chain members. In contrast, if some supplier or distributor is unable to perform well due to unfavorable business environment, Harvey Norman should support it financially and help it to sustain in the market.

3. Product Innovation Cycle:

Moreover, the product development or innovation cycle should be made as short as possible. In order to stay competitive, Harvey Norman should place the latest models of consumer products in its retail stores for sale. Once a new model of some product is launched, it must be made available in the physical outlets as well as on the website for online order placement. The suppliers and distributors can play an important role in shortening this product innovation cycle for the company. Harvey Norman should always keep in touch with the manufacturers in its supply chain about their latest product offerings which can be sold in its retail stores.

4. Variety:

While extending the variety of products in every product line, Harvey Norman should keep in view the current demand, level of acceptability in the past, and prices of the products. It should not purchase all the products in a single category just to extend their variety. Instead, each product should be chosen after analyzing its different purchase attributes. On while offering a large variety of products will increase the number of supply chain members, but it will also increase the costs of operations at the same time. Therefore, it is recommended that Harvey Norman chooses its product lines according to the current demand and customer preferences (Kurtz, MacKenzie, & Snow 2010).

Computerized Map:

Start

Customer enters the Store

Customer visits the Website

Searches for the product

Found

Not Found

Leaves the Store or closes the website

Checks Price, Quality, Brand and other product attributes

Worth buying?

No

Yes

Searches for Alternative products or leaves the store

Makes Purchase Decision

Places Order to the Salesman

Adds to Shopping Cartel

Fills in order and selects Payment

Confirms and Submits order

Gets delivery of the product at doorstep

Gives Receiving on the sales receipt

Transaction done

Goes to Cash Counter

Takes the Product

Transaction done

Makes Payment through Cash or Credit Card;

Takes Sales Receipt

Exits the store

Places Order

Company contacts Supplier

Customer takes delivery and makes payment

Customer makes a decision:

The step 'customer makes a purchase decision' is divided into two steps. The first step 'places order to the salesman' shows the purchase process at a retail store while the other 'adds to shopping cartel' represents the online placement of order. That is, when a… [END OF PREVIEW]

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Organization Behavior Internal Supply Chain.  (2012, September 30).  Retrieved June 26, 2019, from https://www.essaytown.com/subjects/paper/organization-behavior-internal-supply/7195654

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