INDUCTION OF LULU HYPERMARKET

Topics: Supply chain management, Logistics, Supply chain Pages: 9 (3321 words) Published: August 17, 2014


Lulu hypermarket is largest market chain in the Middle East and had targeted to open about 10 outlet in Malaysia in next two year that is around on year 2016. It will be done through a strategic cooperation with Federal Land Development Authority (Felda). The outlet will be set up in Kuala Lumpur at a premises provided by Felda. This will be followed by five more in Kota Baru, Bukit Katil in Malacca, Ipoh, Nilai and Shah Alam within the few years.The memorandum of understanding (MoU) on this was signed and witnessed by Prime Minister Datuk Seri NajibTunRazak.

The Lulu hypermarket chain has 109 branches in the United Arab Emirates, Oman, Bahrain, Kuwait, Qatar, Saudi Arabia, Yemen, Egypt and India.Felda would benefit from Lulu’s extensive hypermarket chain by selling Malaysian products. Lulu Hypermarket would be importing some US$35mil (RM112mil) worth of products and the exports would increase to US$50mil (RM160mil) next year. It reflected investors’ high confidence towards Malaysia’s economy as private investments had increased significantly. The opening of the Lulu hypermarket chain in Malaysia would provide some 2,500 jobs and indirect employment of about 5,000 people. The products that were in high demand in the Middle East were tapioca cake, red bean bun and sambal fried bun. The others are fruits such as golden melon, pineapple and jackfruit.All products sold at Lulu hypermarkets are halal.

What Is Supply Chain Management ?

When you enter a retail store, the products you see filling the shelves in each aisle are the result of supply chain management. Every product that reaches the shopping cart is there based on the cumulative effort of multiple organizations, typically referred to as the supply chain. From manufacturer to shipper to retailer or consumer, the supply chain is typically an aspect of business few organizations truly understand as it consists of activities beyond their “four walls.” Managing the entire chain of supply activities to maximize customer value and create a competitive advantage is becoming a common business practice.

The Goal and Impact of supply chain in Lulu Hypermarket

The short-term goal of Supply Chain Management (SCM) in Lulu Hypermarket is primarily to minimize operational cost and cycle time. Its long-term strategic goal is to increase consumer satisfaction, market share and profits for all members of the organization. To realize these objectives, all strategic partners must recognize that the purchasing function with its boundary-spanning activities, is a crucial link between the sources of supply and the organization. Early involvement of suppliers in product design, for instance, allows manufacturers to develop alternative solutions to select the best and most affordable materials and products. Supplier involvement in product and process design and continuous improvement activities has been shown to have a positive impact on competitive advantage and performance. In general, SCM seeks improved performance through elimination of waste and better use of internal and external supplier capabilities and sources.

The retailing industry has focused on different aspects of SCM, namely, location, transportation, and logistics issues. Indeed, the origin of supply chain management can be traced back to efforts to better manage the transportation and logistics functions.The wholesaling and retailing industries incorporate a logistics focus within their strategic decisions. SCM would allow channel members to compete as a unified entity instead of just pushing inventories down the supply chain to end customers. Thus, the benefits of vertical integration could be obtained by coordinating the logistics functions of independent firms in the chain. In this respect, SCM is synonymous with integrated logistics systems that control the movement of goods from the suppliers to end customers without waste.

Integrated logistics systems seek to manage...
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