Collaborations and Process Innovation †Free Samples to Students

Question: Discuss about the Collaborations and Process Innovation. Answer: Introduction: The purpose of the report is to analyze the procurement management practice of company operating it business in United Arab Emirates. The supply chain management of the company is one of the most vital aspects of the business as the business operation of the firm is based and depended on the proper supply of the materials. Therefore, report is focused on the supply chain management of the company in terms of enhancing the strategic significant of the companys procurement department. The chosen structure of the report presents the procurement practice of the company in detail. The company about which the report is concerned is the Lulu Group. The Lulu Group is one of the major retail companies in United Arab Emirates (UAE) with the parent company EMKE Group (Lulugroupinternational.com, 2017). The following section of the report will discuss the procurement management of the company with the recommendation to enhance the strategic significance of the same. Lulu Group is one of the major retail companies in UAE. The retail market of the company is vast and fast growing. The company was founded in the year 2000, and started capturing the market within a short span of time (Lulugroupinternational.com, 2017). The vision and mission of the company is integrated with each other in terms of operating its business activities with the aim to meet the target. The vision of the organization is to reach the leading position in the retail sector which the aim of providing the customers unique shopping experience. The supply chain of the organization is innovative and technology based along with the four warehouses (Staff, 2017). In addition, it must be mentioned that the supply chain of the organization is well organized. The values of the company thereby are focused on the integrity, teamwork, accountability, innovation and commitment. The business operation of the company is based around the Middle East. The company opened its first hypermarket in Dubai and presently the company has more than 130 stores around the Middle East and Africa. The company operates its business from its headquarter in Dubai. However the business operation of the company is spanned in the international market which includes the business of retail, import and export, trading, shipping, travel and tourism, IT and education. However, the retail business is the major and primary business of the company (Lulugroupinternational.com, 2017). The company being one of the biggest companies in Middle East, the firm has wide numbers o consumers with some tough competitors. However, the number of competitors for the company is fewer but stronger. The company is one of the striving companies in the retail market with the vision of gaining the first place in the retail sector. In the retail sector of the nation, the strongest competitor of the company is Landmark Group. Landmark is the leading company in the retail sector of UAE with 1300 supermarkets across the country while the Lulu Group has only 130 supermarkets (Landmark Group, 2017). On the other hand, the revenue of the company is less than Landmark which is respectively 3.8% per cent and 5.1 per cent (Rahaman, 2013). A research study of Deloitte states that Landmark is dominating the market of retail sector in UAE, whereas, the Lulu Group is striving to get the position of the leader in the retail sector. However, there are other major competitors of the company from th e global market such as the Walmart, Aldi and many others. The supply chain management of the company is well structures and well organized. The suppliers of the company comes from various and different aspects. The firm being a retail business organization offers products of daily use to the customers. Hence the suppliers of the firm are food vendors, vegetable vendors, electronic goods vendors, household article vendors and many more (LuLu Group International, 2017). On the other hand, the customers of the firm are the people from all over the country. The country being a developed and economically independent one possesses most of the customers with financial ability. Therefore, the company does have to target any specific group of customers for their offerings. However, the firm is focused on the loyalty of the customers for maintaining the sustainability of the company in the highly competitive market (Lulugroupinternational.com, 2016). Procurement Management Process: The procurement process is one of the important and major practices that ensure the effective business operation of the firm as well as the sustainability of the same in the competitive market (Stadtler, 2015). The organizational structure of Lulu Group is the bass of the procurement process of the organization. The organizational structure helps the company to have operated its procurement management process effectively in order to maintain successful business operation in the market. It must be remembered that the internal process of procurement determined the functions of the firm as well as the external business operation of the same (Lukic, 2013). It is found that the organizational structure of the firm is matrix which enables the company to effectively perform its business operation in the international context (Ross, 2013). The matrix organizational structure is the hybrid of the fictional and divisional structure and therefore is beneficial for Lulu Group as it operates in a larger context. In addition, the procurement process of the organization is based on the organizational structure in order to operate number of stores both across the country and border. The supply chain management of the company is based on well-thought out distribution channel and the warehouse management system. The supply chain of the company is fastest growing with its business. Being the largest supply chain of the nation it can be compared with the well-oiled machine. To make the management of the supply chain as well as the business operation easy the firm is divided into three parts; Abu Dhabi, Al Ain, Dubai and Northern Emirates (Staff, 2017). There are four warehouse of the firm across UAE which the management of the daily operation of the deliverables products and supplied materials are done. The entire procurement process is automated and is technology based which makes the procurement process easier. Porters value chain: There are two types of activities, which are involved in the supply chain of the organization, one is the primary activities and the other is the secondary activities. The primary activities will include factors such as inbound logistics, outbound logistics, operations, services, marketing and sales. The secondary activities will include the factors such as infrastructure of the firm, human resources management, technology development and procurement (Fearne,, Garcia Martinez Dent, 2012). The primary activities are the main activities in the supply chain management and the secondary activities will provide support to the main functions of the organization. Procurement is a part of the secondary activities of the organization and the organization has been using the SKUs to track their orders. The organization has a good supply chain management and they have fixed number of suppliers who provide them with the raw materials. The logistics of the organization is very efficient and they are able to compete the loading and the unloading of the materials with in the restricted hours (Fearne,, Garcia Martinez Dent, 2012). The organization does not outsource any of their supply change processes, which depicts their efficiency in this processes. The organization is using just in time to manage their inventory as the majority of the inventory is kept in the warehouse and the required amount of stocks are kept at the back stores. The organization mainly imports majority of their items direct from the other countries and is available at their warehouses all the time. Critical analysis of gap in procurement: The operations of LULU group have been divided in to three parts and they are Abu Dhabi, Northern Emirates, Dubai and Al Ain. The organization initially followed a traditional supply chain management but it changed with the advancement of technology and th3e organization is currently making use of the warehouse management system. LULU group consist of four warehouses in United Arab Emirates and the largest warehouse of the organization is in Abu Dhabi. There is lot of advantages of using the warehouse management system as it enables the organization to handle large amount of inventory. The organization has exceeded in technological supremacy and the whole supply chain system is automated. However, the biggest challenge the organization has faced is in the department of the distribution of the large amount of inventory to various outlets to all parts of the world. The organization is trying to use minimum input and provide maximum output so that they can increase the profit margin of the organization. However, there are few issues in warehouse management system, which has to be addressed. The gap in the supply chain management can be modified to make improvements in the business model of the organization that will facilitate in improving the revenue generation streams (Gonzalez-Padron, 2016). Thus, the main gaps in management of the organization are as follows: Increment in the management of the master data Expert knowledge is required for maximizing the benefit Increases the process steps in picking and receipt Complexity in solving problems for erroneous processing Master data management is critical for the organization, as it will facilitate in improving the business processes and at the same time will assist in maintaining their long-term sustainability in the market (Reichert, Otto sterle, 2013). It is essential to maintain standardized procedure otherwise; there will be a huge gap in the quality of the data. It may happen that due to the lack in the customer master the organization may to extend their daily sales output, which may fall under the benchmark of the industry. This is the reason that many organizations have procurement efficiency below the benchmark of the industry. Thus, the issues with the masters of material and the vendors will result in the less efficiency in the procurement of the organization. LULU group similar issues as they have to handle a large amount of data as they supply products to different parts of the world. Thus, the organization will have to manage their upstream processes in a better way, which will lead t o efficiencies in the downstream processes. Thus, the organization will have to use operating model and design the governance of the data to manage master data management. Expert knowledge is the only way of maximizing the performance of the organization as the warehouse management system is complex and consist of huge amount of data. The technical issues will have to be handled and expert knowledge is required for managing unfavorable situations (Ponte Cheyns, 2013). The organization will have to make improvements to their corporate data environment, which will help in the formation of a better and efficient system for management of the invent5ory of the organization (Fearne, Garcia Martinez Dent, 2012). The main competitor for the organization is Landmark that is ahead of them in terms of the market share and the growth rate, which suggests that LULU group, will have to make improvements to the procurements management policies if they want to gain competitive advantage over the competitors in the market. Process steps are the steps involved in the delivery and receiving of goods. The receiving of the good will increase the amount of inventory whereas the issue of the goods will result in the decrease of the inventory (Un Asakawa, 2015). However, the conventional Data Warehouse management system will the increase the number of processes involved in it so it essential to reduce the complexity in each of the procedures of the organization. Thus, LULU group will have to use a lean DW management system, which will facilitate in reducing the number of processes that are involved in receiving and sending of goods. In the Lean DW management system, goods issues and the receipts are not processed and do not involve the use of the storage bins in the processes of the organization (Jaca et al., 2012). Thus, the lean management system will not be using quants to update the stocks of the stocks and the transaction takes place at the level of the storage location. Thus, the quantities of the inve ntory can be displayed with the assistance of the inventory management system. Error in processing in the conventional Data Warehouse management system increases the Complexity in problem solving. The DW system in the LULU group has to handle a large amount of data and it is likely that there will be error in some of the processes of the organization. Lean management system is one of the unique ways of solving this problem, as it will reduce the number of processes in the management of the organization. This will include the use of the various analysis techniques such as root cause analysis, Pareto analysis, fixed order quantity and economic order quantity to decrease the complexity of the procedures and reduce the chances of error in the processes (Meldrum, 2012). The root cause analysis will use the fishbone diagram to analyze the causes of a certain event, which will assist in making improvements in the procedure of the organization. The Pareto analyses states that 80% of the problems in the processes is due to the 20% of the issues (Ab Talib, Abdul Hamid T hoo, 2015). This analysis will identify the issues and improve the processes in the organization. The fixed order quantity defines the reorder point on an earlier and replenishes the inventory with stocks, which has been predetermined by the management (Xu Bisi, 2012). This helps to improve the management of the inventory based on their demand and supply in the market. It is essential for the organization to identify the optimal quantity of the stocks and this will vary from item to item. However, there are assumptions to this theory, which states that demand remains unchanged over a period, there is no change in the transport cost with the change in the order size and it is possible to trace the cost of stock holding and order processing (Uthayakumar Rameswari, 2012). Thus, LULU group will have to incorporate all these changes in to the organization if they have to manage efficiently the large inventory and the data related to it. Moreover, the organization facing issues in the distribution that can overcome these challenges by incorporating these changes in to the organization procedure. Recommendations: Thus, it is recommended that the organization will have to look in to the broader picture and incorporates these changes to overcome their shortcomings. LULU group will have to use lean management system, which will reduce the number of procedure and processes. Thus, the organization will be able to reduce the overall cost of processes; vertical integration is another measure the organization will have to use so that they will be able to improve continuously their processes. These are all parts of change management, which can transform the organization and make them gain competitive advantage in the market and will help them in taking the majority of the share in the market by increasing their growth rate. Conclusion: Therefore it can be concluded from the above report that the procurement management process of Lulu Group works as the functioning body for the sustainability as well as effective business operations of the company. The entire procurement process of the presents some issues in the company which is further recommended by the lean management and vertical integration process for better performance of the company. Bibliography: Ab Talib, M. S., Abdul Hamid, A. B., Thoo, A. C. (2015). Critical success factors of supply chain management: a literature survey and Pareto analysis.EuroMed Journal of Business,10(2), 234-263. Fearne, A., Garcia Martinez, M., Dent, B. (2012). Dimensions of sustainable value chains: implications for value chain analysis.Supply Chain Management: An International Journal,17(6), 575-581. Gonzalez-Padron, T. L. (2016). Ethics in the Supply Chain: Follow-up processes to audit results.Journal of Marketing Channels,23(1-2), 22-33. 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