Groceries Outlet faces tough competition from bigger retailers such as Usave Shoprite
Groceries Outlet faces tough competition from bigger retailers such as Usave Shoprite, Erongo Power Save and Spar located a distant 100km in Omaruru or Brandberg OK in Uis. The community who meant to be served by Ugab Groceries Outlet would prefer to travel the 100km and pay extra in transport fees. The purpose of this study is to look at what Shoprite does differently in terms of supply chain practices and collaborations and how this can be adopted by Ugab Groceries Outlet, to gain a competitive advantage, even though the Shoprite has better economies of scales.
2. How does Ugab Groceries Outlet fits in the Supply Chain
Ugab Groceries Outlet is a retail outlet include in the sourcing/securing of items from wholesalers and makers in Windhoek and transporting them to Otjikakaneno (Onverwag) situated in 300km in the Daures Constituency of the Erongo Region on the fringe with the Kunene Region. Otjikakaneno is situated in both Erongo and Kunene Regions. The merchandise are sold specifically to the customer through its retail outlet or through a portable van. The versatile van is pointed taking the products to the general population who can’t achieve the retail outlet particularly the retired people. The van moves from town to town amid periods when the Government is disseminating maturity benefits.
Ganesham and Harrison (1995), noted that ‘A supply chain is a network of offices and circulation choices that plays out the elements of obtainment of materials, change of these materials into middle of the road and completed items and conveyance of these completed items to customers’.
Therefore, a supply chain can be seen a network of producers (Farmers), manufacturers (Namibia Dairy), warehouses, wholesalers (Metro), distributors and retailers (Ugab Groceries Outlet) involved in obtaining raw materials for example milk, turning them into finished goods, milk, cheese and butter and delivering the finished goods to the final consumers, the residents of the Daures Constituency. The supply chain involves value addition and the satisfaction of customers’ needs. Milk is turned into cheese and butter, and is supplied to the rural residents.
Wherever an organisation finds itself along the supply chain, the viable administration thereof is basic to the associations aggressiveness. It is in this manner imperative to know how the associations can better position itself along the supply chain in order for improve the organisations ability to innovates and compete.
Supply chain management flows:
Rouse (2010), noted that ‘Is the oversight of materials, information and finances as they move in a process from suppliers to manufacturer to wholesaler to retailer to consumer. Supply chain manage involves co-ordinating and integrating these flows both within and among companies’. ‘According to Rouse (2010), Supply chain management streams can be partitioned into three principle streams: The item stream: Include the development of merchandise from provider to a client, and in addition any client returns or administration needs. The money related stream: Involves transmitting requests and refreshing the status of conveyance. The monetary stream comprises of credit terms, installment calendars and transfer and tittle possession courses of action’. ‘As per Lambert and Cooper (2000), working and coordinated store network requires a nonstop data stream.’ ‘Supply chain business process reconciliation includes communitarian work amongst purchasers and providers, joint item advancement, normal frameworks and shared data.
Shoprite Holdings Ltd Supply Chain Management Approach – Best Practices
‘The Shoprite Group of companies, Africa’s largest food retailer operates 1649 corporate and 371 franchise outlets in 15 countries across Africa and the Indian Ocean Islands. The company’s headquarters are situated in the Western Cape Province of South Africa. Shoprite Holdings Ltd is a public company listed on the JSE Limited, with secondary listings on both the Namibian and Zambian stock Exchanges. The Shoprite Group operates a USAVE, retail outlet located in Omaruru, although this is located 100km away from Kondanguno it is a serious competition and threatens the survival of Kondanguno and the rest of the village shops located in the Daures Constituency. The expansion of Shoprite and other South African, retailers in to Namibia has meant the vanishing of local retailers and Kondanguno maybe no exception. The Shoprite Group is continuing its implementation of a strategic expansion programme to maintain its position as the leading food retailer on the continent. ‘The Group objective is to be a preferred shopping destination for consumers by selling food and general merchandise at low prices, from conveniently located outlets in a comfortable and enjoyable shopping environment According the (Shoprite Integrated Report, 2012), it has created and continue to increase its strategic, lead in the supply chain, through its ongoing investment and recognition of the supply chain strategic importance. Improved levels of product availability contributed to market share gains while the drive to reduce inventory levels.’
Shoprite has created its own supply chain which consist of consist of strategically placed distribution centre linking the flow of product from vendors to store at which customer demand ultimately drives the movement of product. Information technology and a fleet of refrigerated and ambient trucks enable the movement of product and the flow of information. Shoprite Group its running a state of the art-distribution operation and becoming the first South African retailer to receive the much acclaimed ISO 9002 accreditation for import and export handling. Centralised distribution is now regarded as a competitive advantage for the group enabling it to stabilise supply chain lines in times when supplier service levels drop. By controlling its supply time, merchandise can be buffered, countering vendor out of stocks and volatile trading patterns, while offering an opportunity to buy- in against price increases. The desire result is inevitably, to consistently allow customers to find the items on their shopping list, thereby keeping their custom and their loyalty.