Logistics Operations: NTUC FairPrice Supply Chain Singapore Analysis.

Order processing at NTUC FairPrice Singapore

Question:

Select a manufacturer or retailer that locates in Singapore analyse it's current order processing, inventory control and the use of ICT technologies in logistical operation. Recommend improvements by apply theories and concepts found in logistics management?

Logistics management is highly crucial in respect to businesses in ensuring that they meet out the needs and requirements of their customers on timely basis. However, in performing the efficient management of logistics operations, it is highly essential to consider appropriate management with respect to several other areas including the inventory management, supply chain effectiveness, application of advanced technological systems etc. The proper management of logistics functions require collaborative efforts from the different department managers as there is a need for achieving efficiency in respect to inventory management and also the supply chain management (Voortman, 2004). This report is focused towards performing an analysis of the logistics operations in respect to NTUC Singapore with a view to analyse the inventory management process, its order processing and also the use of technologies in performing the management of entire logistics operations of the company. Based on the findings, they would be summarised in the conclusion section of this report.

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An analysis of NTUC FairPrice Singapore indicates that it is a supermarket chain based in Singapore and it is regarded as one of the largest retail chain store based in the country. As a result, the task of order processing is also quite significant and carried out at a significantly larger level at NTUC. An analysis of the order processing system at NTUC FairPrice indicates that it is mainly based on centralised operations in the country. The centralised order processing system of NTUC FairPrice can be better understood through the application of diagram as indicated below:

The chart above clarifies the order processing system that has been followed at NTUC FairPrice whereby the products are being purchased initially from the suppliers and they are stored across a centralised location or distribution centre of the company. This centralised distribution accounts for meeting out the needs and requirements of FairPrice stores across the country. In this mode of centralised purchasing process, orders are being placed in the form of consolidated ordering whereby centralised purchasing centre orders their requirements to suppliers, and the suppliers in turn delivers such requirement to the centralised distribution centre of the company. This centralised distribution centre thereafter performs the distribution of products and services as required across different supermarkets of the company. This includes FairPrice xtra, FairPrice Finest, FairPrice express and many more. This particular centralised ordering process has been quite significant as it allows for the attainment of significant level of advantages to the company. These advantages are mainly in terms of improved level of services to customers, increased front end SKU-holding, and significant level of supply chain cost reduction. These are the massive benefits that are accomplished from the centralised distribution system that has been considered at NTUC FairPrice at Singapore (FairPrice CSR, 2015).

Direct purchasing process by NTUC FairPrice Singapore

Apart from the above ordering process that has been noted in respect to the performance of NTUC FairPrice, an analysis indicates that the entire requirements for products and services are not met by the company through its centralised distribution system, but there has also been the application of direct purchasing process by the company with the suppliers. This is evident from the diagram as indicated below:

The above table indicates that there has also been ordering being done by the FairPrice stores directly to the suppliers and they get their needed requirements from them directly. This suggests that the entire purchasing has not been done through the centralised operations of the company, but there has also been the performance of distribution process without such centralisation system. In these ways, the requirement for different FairPrice stores is being fulfilled at NTUC FairPrice (Yeo, 2013).

The management of inventory is highly important in ensuring that the products are being delivered to the final consumers on timely basis. Inventory control is an important function that is required to be carried out by inventory managers so that their efforts ensure the meet out of customer requirements on timely basis. As NTUC FairPrice is operating at a larger level, the management of inventory function in particular is crucial so that the orders from different stores of NTUC are being fulfilled on timely basis. An analysis of the case of company indicates that the organisation has specific inventory management system in process that involves not only the appropriate storing of products when they are received at the centralised distribution system, but there has been the appropriate application of systems to make sure that they are properly tracked and despatched as per the requirements of different stores (Axsäter, 2007).

The management of inventory has been carried out at NTUC FairPrice through the application of information systems. The IT system is applied from the beginning when the orders are received and its application is performed till the end when the products are actually delivered to the NTUC FairPrice stores. The IT systems as utilised allows the management in identifying the exact amount of products that are stocked within their warehouse, and thereby allows them the ability in making timely decisions aimed at replenishing the distribution centre. As a result of this, the requirement of the FairPrice stores is met on timely basis. The inventory management including the storage of stocks are therefore performed through the application of appropriate information systems which allows in identifying the inventory levels all the time and they are then reordered so that requisite level of quantities are maintained (Axsäter, 2007).

The management of entire logistics operations of an organisation can be performed into two major categories including inbound logistics and outbound logistics. The inbound logistics is concerned with the procurement of material whereas the outbound logistics is aimed at ensuring that the products are despatched to the stores. The process flow involving both the inbound logistics and outbound logistics in respect to NTUC FairPrice is indicated below:

Management of inventory at NTUC FairPrice Singapore

The above process flow in respect to NTUC FairPrice indicates the inbound logistics which involves procurement from supplier and this is then distributed to warehouse distribution as maintained by the company. The outbound logistics in particular is concerned with the distribution of products to retailer and ultimately to final consumer via such retail stores. In performing the management of the entire process of procurement and distribution of products and services to final consumers, there has been the application of technology that has been carried out by the company in managing its different processes. As for instance, in performing the handling of material within the centralised warehouse of the company, there has been the application of pick to light technology that is being carried out at NTUC FairPrice. Apart from this, the company also makes use of automated picking modules for the purpose of handling the materials within its warehouse and this allows for the efficient placement of all products at their respective areas (Chong, 2011).

An analysis of NTUC FairPrice indicates that the company has recently considered the application of large number of technologies in its operations with a view to achieve higher productivity levels in its performance. The company has considered the application of newer technology and it also has various other technologies that were already in operations. As for instance, the application of RFID has already been there within the operation of NTUC FairPrice and this has been applied in managing the inventory within the organisation. The application of such technology has been significant in respect to the overall performance level of the company, as this has created opportunities in managing inventory levels and thereby in timely meeting out the organisational requirements in a positive manner (NTUC FairPrice invests in new technologies to boost productivity, 2011).

Overall, the analysis has indicated that the management of operations has been carried out in a highly efficient manner whereby the organisational processes are performed to achieve effectiveness so that the delivery of products and services to the final consumers on time is achieved. The logistics management has been carried out efficiently at NTUC FairPrice which has been the key to organisation’s success.

Conclusion

In this report, a critical assessment has been carried out with respect to the management of logistics operation at NTUC FairPrice and the analysis in particular is focused towards different important aspects related to operations management such as inventory management, ordering process and also the entire logistics performance. On the basis of analysis as carried out, it has been assessed that there has been centralised distribution system that has been followed at NTUC FairPrice and this has been an important way in which the management of product distribution is carried out. The products are sourced and stored at the central warehouse of the company and they are then despatched to the FairPrice stores across different locations. The analysis has indicated that inventory management has been carried out positively at NTUC FairPrice and this has been accompanied by the application of highly efficient technologies by the organisation. The analysis also indicated that NTUC FairPrice has been significant in managing the entire logistics, as there has been inbound and outbound logistics processes being carried out in a highly efficient manner.

References

Axsäter, S. (2007), ‘Inventory Control’, Springer Science & Business Media.

Chong, S. (2011). Overview of case studies: Singapore Case study: NTUC FairPrice [Online]. Available at: https://www.iso.org/sites/TC_Chairs_2011/presentations/5-TC_Chairs'_Conference_2011_Susan_Chong_FINAL_rev_15_June.pdf [Accessed: 31 January 2015].

FairPrice CSR, (2015) [Online]. Available at: https://www.csr.fairprice.com.sg/responsible-retailing.html [Accessed: 31 January 2015].

NTUC FairPrice invests in new technologies to boost productivity, (2011) [Online]. Available at: https://retailasiaonline.com/magazine/archive/2011/mag2011-07_story08.html [Accessed: 31 January 2015].

Voortman, C. (2004), ‘Global Logistics Management’, Juta and Company Ltd.

Yeo, D. (2013). Best Practices in Supply Chain Management in the Retail Industry [Online]. Available at: https://www.singaporehealthcaremanagement.sg/Programme/HealthcareSupplyChainMgmt/Documents/Day1-1030-SC2-Dickson%20Yeo/Singapore%20Healthcare%20Supply%20Chain%20Management%20Congress%202013%20(Final%20Ver).pdf [Accessed: 31 January 2015].