supply chain management – logistics, e-commerce, global sourcing and inventory management – advantages and disadvantages of holding stock, lifo (last-in-first-out), fifo (first-in-first-out), jit (just-in-time)
Prime function of the business business essay
Harvey Norman Holdings Ltd.
CEO:
Gerry Harvey
Prime function of the Business:
Harvey Norman Brands
OPERATIONS
Role of operations management
strategic role of operations management – cost leadership, good/service differentiation
interdependence with other key business functions
influences
globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability
New technology/ ProductsAust. Consumers are big spenders on the latest products Eg. DVD players are now found in many homes. Social influence new home entertainment phenomenon. Some reasons for this social change could be a result of the following: Higher stress faced in the work placeIncrease in street and petty crimeThe high cost of entertainmentThe increase in working familiesThe result of these social changes is that many people now prefer to stay home for their entertainment. This has lead Harvey Norman to consider new technologies such as 3D interior home renovation software to design furniture, communications and electricals to suit the consumer. The company has continued to be at the forefront of new technological home entertainment appliances, at times arranging exclusive launches. Globalization/Economic sectorsThe retail offering in offshore markets has rapidly expanded over the past few years with 73 company-owned stores located in New Zealand, Ireland, Northern Ireland, Singapore, Malaysia and Slovenia. In October 2011, Harvey Norman entered into the Croatian market. One major influence will be the difficulty in transferring a business concept which is successful in the domestic market and making it work in another, different market. Unlike Australia, the Singapore retail and electrical goods market is highly competitive. In Harvey Norman 2008/2009 economic downturn: Closed OFIS storesSold off ten stores, nine of which were externally leasedIncreased rent/charges from franchises on Harvey Norman propertyReduced advertising budget and imposed greater financial onus on suppliers to fund advertisingReduced overseas expansion and limited these to New Zealand and IrelandAnother influence involves financial considerations. Retailers find it hard to make money from selling electrical goods and computers in Singapore. This is because of high rental on retail locations and tight profit margins. It is possible and common for a retail business in Singapore to have a high turnover of goods and not make much money. Another influence, and one any businesses face when expanding internationally, relates to interest rates and exchange rates. Online shopping poses a real threat to Harvey Norman. Technology driven entertainment appliances can be purchased an shipped very easily. In fact online hopping in the United States is increasing seven times the rate of traditional retailing. Best Buy is one such internet retail. The Australian market is small enough for global firms to commence operations introducing price wards to obtain market share and thus effecting Harvey Norman’s profit marginsAs yet the domestic market offers only limited future growth for Harvey Nomrna. Even with innovative products being introduced every three years, the growth is limited to 15% annually.
Quality Expectations
Range of different quality products and brands-> quality of designWarranties are set to ensure a lasting product -> Fitness for PurposeStars and well-know international rating systems on many electronics are used to indicate durability. Cost-Based CompetitionHarvey Norman is facing larger competitors on costs such as JB-HI-FI and arch-rival Kogan which offer best price guarantees. Goods are standardized as they buy from suppliers and do no manufacturing themselves, so less waste and more standardization (thus cheaper). Through bulk buy inputs of their suppliers, Harvie Norman has achieve economies of scale to compete with even lower costsHarvey Norman has an implemented a ‘ Best Price Guarantee’ offer. Legal InfluencesEach country has different laws regarding business practices. Harvey Norman must be aware of these different laws, and modify its business practices around these laws. In 2011 Harvey Norman confronted the Fair Imports Alliance. In late December, Harvey Norman launched a gaming website that leveraged its Irish subsidiary to export video games direct to customers and therefore was outside of the jurisdiction of Australian tax laws for the purposes of GST. Concerns were raised earlier in the year about the prospect of retailers conducting business in such a manner. In Junes 2000 the ACCC complained about the price of cameras in their colour brochure. In 2001 the ACCC alleged Harvey Norman used bait advertising when marketing Quicken software. The allegation was that Harvey Norman advertising the product without having sufficient stocks on hand. This bait advertising broke the Trades Practices Act. Social influencesEntertaining at home towards the move towards luxury inner city apartments. This sees Harvey Norman pushing towards the electronic and homing renovations that are increasing becoming more technologically advances – 3D design software. Harvey Norman always keeps up with the up to date with the latest trends such as Iphones. Political influencesSome of the political issues that Harvey Norman took while expanding overseas are protectionism within the local economy, tariffs and war and civil unrest. Because Harvey Norman does not export its goods, but rather source them locally, it does not have to worry so much about local tariffs. Furniture goods which are sold in the Harvey Norman store in Slovenia are sourced locally, eliminating the need to import the goods from elsewhere, hence lowering costs. Harvey Norman has chosen countries with little political instability, in order to minimize the chances of this hampering its business efforts. Corporate social responsibilityRecently the retail giant Harvey Norman has been accused of selling flooring made from native forests in NSW where koalas face extinction following an investigation by environmental activists who tracked timber harvested in prime koala habitat. The environment group Markets for Change investigation found Harvey Norman buys timber flooring from forests recognised as critical habitat for koalas in NSW and sells it as part of its ” Naturally Australian” flooring range. But recently initiates such as the proper handling of waste such as recycling paper, wood, plastics and other materials have been undertook by Harvey Norman, promoting ethicality. This initiative aims to reduce and control hazardous wastes produced by Harvey Norman with set targets and goals underlining the reduction of plastic bags distributed and increased promotion of recycling through 2011-2016
corporate social responsibility
the difference between legal compliance and ethical responsibility
operations processes
inputs
transformed resources (materials, information, customers)
transforming resources (human resources, facilities)
transformation processes
the influence of volume, variety, variation in demand and visibility (customer contact)
sequencing and scheduling – Gantt charts, critical path analysis?
Harvey Norman relies heavily on its suppliers to be scheduled on time with goods and thus maintain a good relation. The speed and ability of the supplier to meet these demands will influence upon the sequencing and scheduling techniques of the business.
technology, task design and process layout
Online stuff in HR, internet online shopping: internet strategyStores were reconstructed to enable a wide variety of items to be displayed after home entertainment packages were introduced in a ticket manages in response to social changes. Renovation Process1) Visit showrooms and renovation consultants advise the latest materials and finishes. 2) Renovation consultant will organise for an experienced designer to visit home and create a renovation specifically designed and tailored to suit consumer needs. 3) View your prospective renovation on our 3D Design Software. 4) Once satisfied with renovation design, contracts, plans and specifications will be confirmed. 5) Designers will debrief to one of our technical representatives, who will visit your home to ensure all technical aspects are covered and answer any questions you may have. 6) A project manager will be assigned to renovation and guide through the entire renovation process. 7) Materials are ordered, a schedule of works created and a starting date confirmed with customer. 8) Project manager will make regular contact with you during the renovation process to ensure that customer is informed and satisfied with the works and job progress. 9) Experienced site supervisors will make scheduled site visits and complete process checklists to ensure that work is progressing appropriately. 10) Renovation is completed in a timely fashion and to Harvey Norman’s exacting standards. 11) Allocated site supervisor completes a final inspection and completion report. Lots of job audits and skills are matched to help suit the job description as shown by the many occupations and abilities of the Harvey Norman renovation staff.
monitoring, control and improvement???
outputs
customer service
warranties
operations strategies
performance objectives – quality, speed, dependability, flexibility, customisation, cost
new product or service design and development
Harvey Norman’s experienced design and renovation team offers professional advice and services to allow the creation of new and specialized home improvements through design software.
supply chain management – logistics, e-commerce, global sourcing and inventory management – advantages and disadvantages of holding stock, LIFO (last-in-first-out), FIFO (first-in-first-out), JIT (just-in-time)
Harvey Norman negotiates a price for plasma televisions from Panasonic, as discounts for larger quantities are considered. In some products such as furniture and some electronics (usually bulk), when a display is sold, a brand new goods is collected from the warehouse/distribution centre to deliver to the customer.
outsourcing – advantages and disadvantages
technology – leading edge, established
quality management
control
assurance
improvement
overcoming resistance to change – financial costs, purchasing new equipment, redundancy payments, retraining, reorganising plant layout, inertia
Global factors – global sourcing, economies of scale, scanning and learning, research and development
Harvey Norman global expansion always adopts a strategy of opening a few stores within the first years of operation. Currently all markets have at least two stores trading. This enables the company to take advantage of cost efficiency in terms of stock storage, its distribution and purchasing contracts. This cost efficiency is known as taking advantage of economies of scaleHarvey Norman’s large global brand allows it to be the price setter and demand the first purchase of goods throughout the world. This would really boost profits as suppliers worldwide compete to distribute the latest through the Harvey Norman global chain. In terms of warehousing, buying and distributing in Singapore is centralized, suppliers deliver to a single warehouse rather than to stores. Small shops and high rents make on site warehousing in Singapore expensive, so centralization works best in this markets
HUMAN RESOURCES
For each of the following syllabus points, find facts to support any point you make on a case study of your choice. You don’t need to cover every element within each dot point but the more the better. Use one or a maximum of two businesses and be specific and concise e. g. Social – Coca-Cola has a large number of female staff comprising over 36% and many of these are part-time. For this reason they have established a subsidized day-care centre next to head office for ease of working mothers and encourage flexible hours to be a more family friendly workplace.
role of human resource management
interdependence with other key business functions
outsourcing
human resource functions
using contractors – domestic, global
key influences
stakeholders – employers, employees, employer associations, unions, government organisations, society
Society:
legal – the current legal framework
the employment contract – common law (rights and obligations of employers and employees), minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contracts
occupational health and safety and workers compensation
antidiscrimination and equal employment opportunity
Economic
technological
Technology is obviously a major influence of Employment Relations at Harvey Norman. Employees must be flexible to keep learning about new products and this managed by continual training, the majority of which is done online. Training is ongoing and a cyclical process, staff is kept up to-date with the latest developments from either Head Office or suppliers. Online courses and video conferencing.
social – changing work patterns, living standards
– Changing working patterns means retailing has become a seven day a week job with considerably long shifts. Employees need to be willing to work long and varied hours in comparison to regular employee involved in other industries. Harvey Norman employees are expected to work long hours and reach goals each period. The changing work patters mean that retailing is now virtually a seven days and 10 hour day experience. Employees need to be willing ot work long and varied hour in comparison to a regular employee involved in other industries. Harvey Norman employees must be willing to accept a different type of employment. There are no set hours, all employees are expected to work long and hours and reach goals each period
ethics and corporate social responsibility
processes of human resource management
Acquisition
Development
maintenance
separation
strategies in human resource management
leadership style
job design – general or specific tasks
recruitment – internal or external, general or specific skillsement
The company recruits young people and uses their management team to target and select talented staff for promotion. The majority of staff are recruited at entry point, induction and online training programs introduce these to the reward culture operation within the company.
training and development – current or future skills
performance management – developmental or administrative
rewards – monetary and non-monetary, individual or group, performance pay
Potential candidates are offered up as franchise owners. In addition to this, there are non-monetary reward of having freedom and responsibility of managing an independent small business. Many sales people are able to earn extra income through commission. In addition, Harvey Norman employees are given an opportunity to own their own piece of the company through the franchise system. Executive staff remuneration packages includes the following: Base salaries which are decided by the Remuneration Committee. This committee examines the financial position of the company and salaries in other companiesPerformance Cash incentives. These bonuses are paid at the end of the financial period based on specific performances and if goals have been met. Other monetary benefits such as car allowance, education and medicalSuperannuation contribution. These may be in excess of minimum requirementsShares and options organised by an independent firmIf employees perform well they will be recognised and rewarded accordingly. Extra money in form of commissions is available as a reward. Company places heavy emphasis on reward and promotion.
