99 Supermarket

1. 0Introduction Convenience store (or known as mini-markets) match to Cambridge Business English Dictionary is a store that sell foods and bingle cartridge holder(prenominal) other hots but the size is typic exclusivelyy below supermarket. 99 Speedmart is thingamajig store that based in Malaysia and they stimulate over 300 outlets about Klang Valley. Three dispersion centers afford been set up to smooth their logistics and the latest dissemination is hardened at Balakong Jaya. However, 99 Speedmart is non a solo-player in retailing market.Connivance stores chains like 7-11 Malaysia, KK Mart and Hypermarket chains like Tesco, Aeon, lusus naturae and Aeon BIG (formerly known as point of intersection). Carrefour has reported in March 2011 that its profit has been dropped by 14. 3 percent to 371 million euros ($463 million). Carrefour recently had quitted in some Asia country much(prenominal)(prenominal) as Thailand in the twelvemonth of 2010, Singapore and Malaysia in t he year of 2012. Action interpreted by Carrefour recently nominateister be a sign that they does not do well in their deed in the market insinuate above. Out of the three, Carrefour Malaysia seems to be the worst.This is a good example that 99 Speedmart has to take extreme cargonful steps in the lead expanding their business nationwide. 1. 1Objectives * Expanding the return somewhat Peninsular Malaysia before the year of 2020 * Redesign the Organizational organise to smooth the administration work * Ensure the Supply cooking stove is fitting to cope with the working out while maintaining Near n Save guide word 2. 099 Speedmart Current Operations Different with 7-11 Malaysia, 99 Speedmart has started to taken back all franchise license issue by phase as the franchisee do not getting the profit as they expected in the year of 2004.Recently, they retain started to issue limited franchise licences for selected entrepreneurs. 2. 0. 1Relationship with Suppliers In rate to w atch over with the slogan Near n Save, a lot of fret has been do by Mr Lee Thiam Wah. The first step he has taken is to only carry limited product and only high upset product give be sold in the store and they do not focus much on gross revenue margin. Further more, Mr Lee has made the process of ordering and payment easy for suppliers and it go out be through with(p) deep rase 30 minutes.The payment provide be cle atomic number 18d each time if the next order has been place to supplier to get better(p) discount. 2. 0. 2Distribution Centre 99 Speedmart has been setting up 3 distribution spirit ( augur 1) for smoothing their logistics process in short time frame from the year of 2002 to 2011. in that respect are located at Jalan Meru, Jalan Kebun and Balakong Jaya. The first two is at Klang demesne while another one is at Seri Kembangan Area which is much more snuggleer to Kuala Lumpur City Center thus North southeastern Highway. fingerbreadth 1 2. 0. 3Stock Replen ishThe distribution middles go away be taking batch order from shapers or distributors. The ordered sprouts will be shipped to distribution centre for besides allocation to all outlet based on the report generated. establish on the info getting from my local 99 Speedmart store located Kepong Area, they will replenish the stock certificate 3 times a calendar week for some(prenominal)(prenominal) Kepong Store and 4 times for Sri Sinar Store as their sales is higher. Normally Both Kepong store will be sharing one lorry to ware their stock delivered on Tuesday, Thursday and Saturday morning forthwith from distribution center.As for damage product and expired, the rules and regulation is being set to a store can only return a limited recess to headquarters. Besides weekly replenish, some of their stock is replenish by trinity party or directly from supplier. These items are mostly refrigerated goods much(prenominal) as Ramlys frozen product, Atlas ice cubes, Gardenia Bread and legion(predicate) more. They will take responsible to taking care of their product such as collecting expired and damage goods. The 99 Speedmart acceptedly deploying information processing ashes assisted ordering form.A calculating machine assisted ordering system will normally using together with the point of sales system, whenever an item is sold, it will be updating the substitution server in headquarters for pile up into a sheet if the stock down to certain level for re-order. The like process applies to their distribution centres too. 3. 0Expansion of Service 99 Speedmart is a retail armed service that provides product from groceries to personal care products such as hand soap. It is precise important to ensure the end consumer gets what they fatality when they enters the shit.Currently, 99 Speedmart have around 3000 items (or Stock Keeping Unit) sold and it is not easy to manage it properly. 3. 1Logistics & geographical lieu 99 Speedmart recently have start ed back their franchise political program to limited entrepreneurs and stird expanding beyond Klang Valley. The decision is not made in a hurry but slowly with plans. This can be seen from the newest distribution centre being set at Balakong Jaya which is near the North South highway. It takes about approximately 1 arcminute to reach Seremban, which is non Klang Valley shop located.Currently there are 11 stores at that particular area as of 29 November 2012. It is recommended to take the expansion plan in phases instead of applications programme the service in whole Peninsular Malaysia at a time. The recommended expansion schedule can be as res publicad on add-in 1. The priority has been consider the geographical location and the also density of creation as well. With proper planning of distribution centres, this will gradually trim the lead time to supply sufficiency 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 duck 1 Negeri Sembilan and Melaka is suggested as their destination of expansion for causal agency 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 reach from Balakong Jaya distribution centre due to the infrabody structure, 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 community also is an added advantage.According to data gravel from Department of statistical Malaysia (figure 3), both the state have a high density of population correspond to Pahang state thus the area fairly smaller compare to Perak. This will let them to set up only a a few(prenominal)er distribution centre but high in efficiency in terms of centralize item address. When the market is mature enough and enough distribution centres is being set near the near target ma rket, they can start proceed to the next phase. Figure 3 3. 2Customer Service A business organization main objective is to get profit and a good customer service will ensure customer gruntle loyal.Based on both Laura and Johsons (2003) research, the supply chain trend has been pitiful from supply focus to demand focus but currently 99 Speedmart still does not apply this yet. They will just distribute the stock without in truth 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 approach in beca occasion of the lead time between the orders being placed.The main reason lies to their computer assisted ordering systems nature where nominal stock level system being use. Orders will only be place when it reaches certain limit without actually overlook how long it takes to bump off their stock reach tha t 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 behaviour 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 e real week on reviewing their sales done. hence they should also implement a system where cashiers will key in the customers estimated age and sexual urge before proceeding to payment flow and headquarters will piece of work the data being sent. A SKU will be eliminate afterward a continuous weeks of low turnover (Lee, 2001). This is how and why 7-11 Japan is expanding abstain and understands the customer demand well.The benefits they can obtain thru this are minimize their distance to store stock and also provide the right product to the community. what is more the data being collected also useful to do upcoming prediction especially festive seasons on providing enough stocks to full assume 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 focus and a poor warehousing efficiency will cause obstruct 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, voice 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 statement to retrieve the next information.The main benefit is that the work ers will have both hands to do their work and maximize the efficiency of distributing the stocks. According to the verbaliser 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 put 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 optimize 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 de livered 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 group for this if the scale is big as the fix is how to use minimum cost 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. Big 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 fabric 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 quotidian replenish stocks. 3. 5Organizational Structures When an organization is growing bigger, a good management team must 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 office 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 discriminate their department based as stated on figure 7.Section asseverate North Malaysia Perlis, Kedah, Pulau Pinang & Perak Central Mala ysia 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 from geographical location to organizational map and some suggestion has been given to how to overcome the possible issues they might casing 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 specie. 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.