Supply chain is a network of retailers, distributors, transporters, storage facilities and suppliers that participate in the production, delivery and sale of a product to the consumer (Kietzman, 2008). Every effort involved in producing and delivering is looked at in supply chain, from the final product supplier’s supplier to the customer’s customer. A Business depends on supply chain to provide them with what they need in order to survive. Each business plays a role within the supply chain arena. As the market evolves companies will have to be aware of the role they play within the supply chain arena. Companies that master how to build and participate in a strong supply chain will have an advantage in their markets.
Technological forces, Global cost force and Political and economic forces. Global Market Forces involve the pressures created by foreign competitors, as well as opportunities created by foreign customers. Companies may have to move into a foreign market in order to defend domestic markets. According to Dornier and colleagues much of the demand growth available to companies is in foreign and emerging market and the United States is accounting for less and less of the total consumption of goods in the world.
Lowe’s company is the second largest home development retailer in the US. About 155 store were operated by the Lowe’s company withing 50 states in the US, 35 stores in Canada and 5 in Mexico. The company is struggling to be the best option for the home development for the United States residents. Since customers have high expectations from the company, it has to sell products the customers are in need of and also give a satisfactory solution through being a partner in every process of home development.
There are various ways designed to give seamless and easy experience that involves improving the sales across entire selling channels, advancement and constant enhancement of technology, infrastructure and allow access to customers projects and product condition at every vital point. Each supplier who sells products to Lowe’s is suppose to abide by the vendors code of conduct. Clearly, the code states the expectations that every supplier adheres to laws and regulations of the countries they operate.
Even though Home Depot has been in operation, it is evident that it hasn’t been appearing in the stocks over the last previous year. There is a big gap between the performance of Lowes and Home Depot. There is quite a lot that Lowe’s need to do so as to fill the gap and become a relative better performer but the big question remains of whether they will really make it.
The good news for Lowe’s is that they can still do better by putting in place some changes in the supply chain management. By having a CMO in place the company should be capable of making better merchandising decisions and improved customer satisfaction. The company’s management should also enhance worker hours through selling floor to enhance the company’s close rates in appliance sale. The company should also go back to its drawing board and check out what can be done about controlling better operational cost improvements. Apparently, Lowe’s has in most occasions lagged Home Depot through converting revenues into free cash flow and yet that hasn’t indeed changed despite Lowe’s slow store growth. For that reason, its possible to argue out that there lies a lot of potential lurking under the surface at Lowes. The problem that investors might be having is finding out how much that can be exposed and how fast it can be done. Nevertheless, Lowes has not really missed the recovery process in the housing industry; there is still time and room to put its house in shape before the commencement of the recovery journey.
Global Operations and supply chains have become an intricate part of supply chain management. The following statistics show the magnitude of how supply chain has become significant (Dornier and colleagues, 1998).
About one-fifth of the output of U.S. firms is produced overseas.
One-quarter of U.S imports are between foreign affiliates and U.S. parent companies.
Since the late 1980s, over half of the U.S. companies increased the number of countries in which they operate. Political and Economic Forces may greatly affect the drive toward globalization. Regional trade agreements may drive companies to expand into one of the countries regional group. It may be to a company’s advantage to obtain raw materials from or to a manufacture within that country. Production process may even be redesigned to avoid tariffs
In my design, I would consider both domestic logistics and global operations because in the case where domestic or global supply chain for the products is interfered with, sales and gross margin would be badly affected. This so because the company source, stock and sell products from over 6,000 domestic and global vendors. A huge amount of those products are sourced from international vendors with China being the largest. Economic instability among major vendors, political instability and labor unrest in the source countries, disciplinary trade restrictions imposed by the U.S or a key source country. Currency, tariffs and transport capacity and cost which may be beyond control could have a negative impact.
There are various channels I would use to buy-in my design. These include; in-store, on-site, online and contact center. Among these, the home retail store would be the most ideal department I would choose to implement my design. Since retail home stores are usually open on daily basis, and with square feet of approximately 112000 of retail selling ground, and with also another 33,000 square feet of outdoor garden centre selling ground. The stores provide same products and services with distinctions based on market forces. Onsite is another department that I may opt to use in implementing my design because this where account executives pro service engage with customers to help their place of business to make sure customer’s needs and products resources are adequately met. Here, the Project Specialist Exteriors (PSE) program is in operation to discuss exterior projects like roofing, fencing, siding and windows. Additionally the projects Specialist Interior Projects like kitchen and bathroom.
Contact centres give direct support like sale tendering to the customers that contact them through email
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