HARVEY NORMAN

Operations and Supply Chain Management of Harvey Norman



Table of Contents

1. Harvey Norman2

1.1 Description of Company2

1.2 Internal Supply Chain2

2. Competitive Priorities of Harvey Norman3

2.1 Cost3

2.2 Quality3

2.3 Flexibility4

3. Efficiency of Supply Chain4

3.1 Reduce, Reuse, Recycle4

3.2 Technology5

3.3 Environment5

4. Features of Supply Chain5

4.1 The Global Expansion5

4.2 Low Investment6

4.3 Property Investment6

5. Supply Chain Partners6

6. Improvements7

7. Internal Supply Chain Map8

References10

Operations and Supply Chain Management of Harvey Norman

Harvey Norman

Description of Company

Harvey Norman is a public limited company. It operates as a franchisor and permits other independent professional operations to represent their franchises. Its core business is to trade electronics, furniture, computers, and other home and office appliances. It also offers home improvement products like beddings, lightings, flooring, curtains and carpets. It is mainly operating in Australia, New Zeeland, Singapore, Malaysia, Ireland, and Slovenia. Harvey Norman's headquarters are located in Australia and New South Wales (MarketLine, 2012, n.d.).

It has around 5,579 employees currently working. Harvey Norman earned revenues of A$1556.4 million in 2011. It increased by 15.8% from 2010. Its operating profit for the year 2011 is A$407.5 million, it decreased by 5.4% from 2010. However, the net profit for the year 2011 is A$252.3 million, which 9% higher than 2010 (http://360.datamonitor.com, 2012, n.d.).

Internal Supply Chain

Internal Supply Chain management is about the processes and procedures from planning to delivering orders to customers. It takes into account the processes of Strategic planning, which is regarding design of the network implemented in supply chain process. Demand Planning is about analyzing and foreseeing the demand of products, and factors affecting demand such as price, marketing etc. Supply Planning works on producing a plan that meets the demand and processes in a designed network such as factory or inventory plans. Fulfillment is about executing the plan via supply source such as transportation and warehousing process. Field Service involves activities after product is delivered to customer such as maintaining inventory of spare parts, arranging service calls (Sunil. C. 2010, p. 497-450).

We have observed that Harvey Norman follows a decentralized logistics management approach. Each franchise has its own warehouse of stocks, where stocks are bought and delivered effectively. Harvey basically outsources its supply chain and customer delivery is managed by each franchise individually (Materials Handling, 2011, p.96-97).

Competitive Priorities of Harvey Norman

Cost

It is one factor that every organization wants to have grip on. Harvey Norman recently witnessed heavy losses in Irish Business of A$29 million for the year 2011. It was mainly due to massive retail market competition prevailing in the global market. Thus Harvey Norman implemented a cost reduction program that has successfully decreased the expenses by €2.4 million. Harvey Norman owns 14 stores in Ireland and 2 stores in Northern Ireland. The increase in rents of the property has also diminished the sales of Harvey Norman, however, the company is expecting to recover the loss by controlling costs, implementing firmer control on inventories and raising margin from income earned (Hales. S. 2012, n.d.).

Quality

Harvey Norman's main objective has always been to produce and supply the best quality products to its customers ...