Week 6 – Supply Chain Management

 

Strategy for management of upstream and downstream supply chain Argos.

Upstream Supply Chain basically all Argos’s transactions, dealing with other intermediaries and suppliers (same as buy side e-commerce).

Downstream Supply Chain basically all Argos’s transactions, dealing with other intermediaries and customers (same as sell side e-commerce).

Argos has a supply chain, minimum number of networks, its suppliers and customers.  Argos supply chain management consists of materials, processes, human capital and information between suppliers and customers ensuring maximum customer service for all.  This creates great advantages to business, reduces data errors to 0,reduces order lead time, improves management control and benefit functioning of supply chain.

 

 

There are two types of Supply Chains (Push and Pull)

Although in my opinion I feel Argos operates a Pull system because of its customer demand/satisfaction emphasis.  

 

Pull Model, advantages for Argos, very forceful, because planned level of production/service delivery not dependant on forecasts (maybe inaccurate).  Operated in response to Argos customer demands and also emphasises on delivering value to their customers.

 

Downside of pull model from Argos customers’ point of view, in the troll on the market, being 1^st mover could experience pain.

 

Argos have ethical trading conditions in their supply chain.

 

Vertical integration

Amount of supply chain activities Argos undertakes and have controlled access within the company.  Argos has distant relationships with its suppliers.   Argos business carries out the work by themselves, e.g. updates the Argos web site.  Therefore they don’t have to pay anyone else to carry out maintenance within the website. 

 

Disintegration

 

Argos has a wide range of network suppliers, also using disintegration Argos is outsourcing all the time.  Argos here basically focuses on any core capabilities and most importantly cost reduction.  Argos ways up all options available, such as whether to pay another company to maintain/update the Argos website.

 

Virtual integration

Argos have a majority of supply chain activities, they control these outside their business using linked third parties.  Argos also has a close relationship with all its suppliers (Sony, Samsung, Fisher-price etc).  They have suppliers who assembly component parts.  Argos uses a dot-com approach within their virtual integration.

 

 

Partnership Management

                       

Argos does not have any partners.  Home Retail group de-merged from its parent company GUS plc, October 2006.  Argos is a solo company and therefore does not have any shareholders but in saying this have shareholders in a different form, e.g. a long time serving employee may have some shares in the business, but this does not affect the company in terms of decision making.  Shareholders are brought in when the company needs money, basically they sell pat of the business in this process.

 

 

Value Chain

 

Basically this takes into consideration the value (benefit of each product, what it costs and the benefit of each interface between individual products which Argos sales to its customers and cost).  This is a fairly simple process, start product/service worthless as nothing being created, as manufacturing process tacks place, this increases value right up until the end product.  The likes of argos.co.uk website its worthless until customers start buying product(s)/service(s).  many transactions flowing daily, generating a profitable service.

 

Procurement and fulfilment strategies

Procurement basically resources all goods and services at a low as price as possible by a business organisation.  Argos must remain competitive throughout their trading habits and keep everything consistent, e.g. offer leaflets once every 2 months.  All factors must be taken into consideration by Argos, e.g. price of item, postage costs, interest, fluctuation (up/down).

 

Fulfilment basically is the name given to how companies carry out their dealing with customers in terms of orders.  This starts from Point of Sale (POS) until product/service arrives at customers’ front door.  Many organisations use their own courier (Argos, Famac, Parcelforce).

 

For Argos to preserve a 1^st class service, their strategy needs to work closely with both suppliers and customers.