99 Supermarket

1. 0Introduction Convenience insert (or known as mini- grocerys) according to Cambridge Business English Dictionary is a store that sell foods and some while other goods but the size is typic exclusivelyy be impression supermarket. 99 Speedmart is lash-up store that based in Malaysia and they hold in over 300 outlets around Klang V bothey. Three diffusion centers bring on been set up to smooth their logistics and the latest dispersal is located at Balakong Jaya. However, 99 Speedmart is non a solo-player in retailing market.Connivance stores arranges like 7-11 Malaysia, KK Mart and Hypermarket chains like Tesco, Aeon, Giant and Aeon orotund (formerly known as Carrefour). Carrefour has reported in March 2011 that its profit has been dropped by 14. 3 per centum to 371 million euros ($463 million). Carrefour recently had quitted in some Asia country such as Thailand in the course of study of 2010, Singapore and Malaysia in the year of 2012. Action taken by Carrefour recently mountain be a sign that they does not do well in their operation in the market pay heed above. Out of the three, Carrefour Malaysia seems to be the worst.This is a good example that 99 Speedmart has to take extreme over graspful steps before expanding their business nationwide. 1. 1Objectives * Expanding the value around Peninsular Malaysia before the year of 2020 * Redesign the organizational Structure to smooth the administration work * Ensure the Supply Chain is able to cope with the expanding upon while brinytaining Near n Save slogan 2. 099 Speedmart real Operations Different with 7-11 Malaysia, 99 Speedmart has started to taken binding all claim license issue by phase as the franchisee do not acquire the profit as they expected in the year of 2004.Recently, they have started to issue curb franchise licences for selected entrepreneurs. 2. 0. 1Relationship with Suppliers In order to comply with the slogan Near n Save, a lot of move has been made by Mr Lee Thiam Wah . The first step he has taken is to average carry limited product and just high turnover product testamenting be sold in the store and they do not condense much on sales margin. Furthermore, Mr Lee has made the process of tell and retribution easy for suppliers and it lead be done within 30 minutes.The payment will be cleared every time if the next order has been place to supplier to get element discount. 2. 0. 2Distribution magnetic core 99 Speedmart has been setting up 3 distribution union (figure 1) for smoothing their logistics process in short time frame from the year of 2002 to 2011. There are located at Jalan Meru, Jalan Kebun and Balakong Jaya. The first two is at Klang neighborhood while another(prenominal) one is at Seri Kembangan Area which is much more nearer to Kuala Lumpur City eye thus North South Highway. Figure 1 2. 0. 3Stock ReplenishThe distribution centres will be taking masses order from manufacturers or distributors. The ordered stocks will be shipped to distribution centre for further al arrangement to all outlet based on the report generated. Based on the info getting from my local 99 Speedmart store located Kepong Area, they will replenish the stock 3 times a week for both Kepong Store and 4 times for Sri Sinar Store as their sales is higher. Normally Both Kepong store will be sharing one lorry to have their stock delivered on Tuesday, Thursday and Saturday morning presently from distribution center.As for toll product and expired, the rules and regulation is being set to a store potentiometer only return a limited box to headquarters. Besides weekly replenish, some of their stock is replenish by leash party or directly from supplier. These points are mostly refrigerated goods such as Ramlys frozen product, Atlas ice cubes, Gardenia Bread and many more. They will take responsible to taking care of their product such as collecting expired and damage goods. The 99 Speedmart currently deploying computer aid reques t system.A computer assisted ordering system will normally using together with the place of sales system, whenever an item is sold, it will be updating the central server in headquarters for compiling into a sheet if the stock down to certain level for re-order. The same process applies to their distribution centres too. 3. 0Expansion of inspection and repair 99 Speedmart is a retail service that leaves product from groceries to personal care products such as come about soap. It is very important to ensure the end consumer gets what they take up when they enters the ca-ca.Currently, 99 Speedmart have around 3000 items (or Stock retention Unit) sold and it is not easy to manage it properly. 3. 1Logistics & Geographical Location 99 Speedmart recently have started back their franchise program to limited entrepreneurs and postulated expanding beyond Klang vale. The conclusiveness is not made in a hurry but slowly with plans. This can be seen from the nakedest distribution cen tre being set at Balakong Jaya which is near the North South highway. It takes about approximately 1 hour to relegate Seremban, which is non Klang Valley shop located.Currently there are 11 stores at that particular heavens as of 29 November 2012. It is recommended to take the involution plan in phases instead of covering the service in whole Peninsular Malaysia at a time. The recommended amplification schedule can be as stated on table 1. The priority has been moot the geographical location and the overly parsimony of population as well. With proper planning of distribution centres, this will little by little reduce the lead time to supply enough stocks to the end outlet. Phase Location 1 Negeri Sembilan & Melaka 2 Perak & Johor 3 Pulau Pinang Kedah & Perlis 5 Pahang 6 Kelantan 7 Terengganu plug-in 1 Negeri Sembilan and Melaka is suggested as their destination of expansion for reason that both the state have a close distance to Klang Valleys distribution centres where even for Melaka , it will not take more than 2 hour to yield from Balakong Jaya distribution centre due to the infrastructure, the expressway is good for both the states (Figure 2). Figure 2 (Google, no date) Beside the distance of distribution centres, the density of the states population also is an added advantage. fit to data obtain from Department of Statistical Malaysia (figure 3), both the state have a high density of population compare to Pahang state thus the area sanely smaller compare to Perak. This will let them to set up only a few distribution centre but high in efficiency in terms of centralize item delivery. When the market is mature enough and enough distribution centres is being set near the near target market, they can start proceed to the next phase. Figure 3 3. 2Customer Service A business organization master(prenominal) objective is to get profit and a good node service will ensure guest stay loyal.Based on both Laura and Johsons (2003) research, the su pply chain trend has been moving from supply focus to demand focus but currently 99 Speedmart still does not apply this yet. They will just distribute the stock without really over looking into what is the real demand of the particulars shops demand. As a result, the store room is pack of stocks that does not really sells but some of the items are quickly sold off within few days without any more new stock approaching in because of the lead time between the orders being placed.The main reason lies to their computer assisted ordering systems nature where minimum stock level system being use. Orders will only be place when it reaches certain limit without actually overlook how long it takes to make their stock reach that level. A same item might be taking just few days to reach minimum stock level in one outlet but a few weeks for another outlet as each of the area will have a different buying demeanour that affected by factors such as religion and cultures. 3. 2. 1Computer System SupportInstead of just using only the last-place stock level method, they should also take initiatives to do research on the data stipulated from time to time. They will have meeting every week on reviewing their sales done. olibanum they should also implement a system where cashiers will key in the customers estimated age and gender before act to payment flow and headquarters will study the data being sent. A SKU will be eliminate after a continuous weeks of low turnover (Lee, 2001). This is how and why 7-11 Japan is expanding fast and understands the customer demand well.The benefits they can obtain thru this are minimize their space to store stock and also provide the right product to the community. Furthermore the data being collected also useful to do future tense prediction especially festive seasons on providing enough stocks to full fill demand. This will also gradually minimize the effect of lead time and bullwhip that impacts their operation. 3. 3Warehousing Warehousing is always an important part of supply chain management and a poor warehousing efficiency will cause delay on delivery, damage goods and many unexpected issues. 9 Speedmart is using a paper based checklist when trying to assign all the stocks to destination outlet. This actually is a big issues as 99 Speedmart is currently is expanding fast in Klang Valley and also some experimental outlet outside of Klang Valley. In order to speeding up the process, articulate directed picking system is suggested to be apply. A voice directed picking system where computer will give instruction thru headset and workers can make voice command to retrieve the next information.The main benefit is that the workers will have both hands to do their work and maximize the efficiency of distributing the stocks. According to the speaker from Lein Hing Group, currently 7-11 Malaysia has been adopted this technology thus increase the efficiency up to 30% for their speed of assigning goods to designated outlet thus lower down the lead time. 3. 4Supply Chain Figure 4 Current Supply Chain Model As stated as section 2. 0, 99 Speedmart outlets are getting stock supplies from distribution centres and some is directly from manufacturer (figure 4).When the operation is expanding, the need to reconsider on how to hone the supply chain structure as each state it might be having different supplier for same product brand. Figure 5 Suggested Supply Chain Model Since some of the item is low in turnover, they have buy in a large batch order to get better discounts from manufacturer or suppliers. So I suggest that they should set a central distribution centres or such items where the item will be delivered in a milk run method from area distribution centre to another area distribution centre.They can either outsource the delivery to third party logistics companies such as Tiong Nam or set up a special team for this if the get over is big as the concern is how to use minimum constitute to send the end goods to the outlet. When the service is expanding nationwide, they have to coordinate with suppliers in order to get the nearest source on getting their good supplies. pornographic consumer brand normally will have an area distributor for each area so 99 Speedmart can make full use on nearer source to obtain least cost of transporting goods. Furthermore, they can take 7-11 Japan operation model for reference on building a new logistics systems.This is a very success model where 7-11s competitors such as Lawson, Family Mart are also emulated their way of operation. Both suppliers and 99 Speedmart can set up a joint service whether items that can be delivering together will be cross docked in same warehouse. The driver is expected to do a milk run to area assigned to them to do daily replenish stocks. 3. 5Organizational Structures When an organization is festering bigger, a good management team mustiness be there to coordinate the business well. Without a good management, they will be facing issues such as delay in order, late payment and others.As referring to figure 6, we can notice that 99 Speedmart is having a flat structure to speeding up the decision process. Generally is the current structure is already good enough but some position must be added to meet their objectives of expanding their business as showed on figure 7. Malaysia is a multi cultures society and each part of the area will have different demand for the product they need. In order to understand what they need for each part of the area, the branch operation can further divide their department based as stated on figure 7.Section State North Malaysia Perlis, Kedah, Pulau Pinang & Perak Central Malaysia Selangor, Kuala Lumpur & Negeri Sembilan South Malaysia Melaka & Johor East Coast Kelantan, Terengganu & Pahang Table 2 Figure 6 Current Organization Chart Figure 7 Changes for Cope with Service Expansion 4. 0Conclusion The area of caution has been stated in section 3 start fr om geographical location to organizational chart and some suggestion has been given to how to overcome the possible issues they might face throughout the expanding rocess. I am quite sure 99 Speedmart will be very successful and to cover up the Peninsular Malaysia before the year of 2020 if they are able to implement the all the suggestion above. Thus the bad economy that happens recently also will impact how they use their money. People to tends to compare the item price between retailers to save their money and in this case 99 Speedmart is very competitive as they are offering their product low in price thus near to residential area. I am expecting they will set up 2550 new stores in the year of 2013.