MBA503

Operations Management and Decision-Making Models

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Contents
Introduction................................................................................................................................3

Company’s supply chain that supports the company’s operational and sustainability
processes................................................................................................................................4

Critical factors affecting the company in relation to sustainability and organisational

performance..........................................................................................................................5

Key operational matters that need to be addressed by the company..............................6

Conclusion..................................................................................................................................8

References..................................................................................................................................9

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Introduction
This report mainly emphasis on operation management and supply chain practice of
Wesfarmers Company. Operation management and decision making help in enhancing the
production process of the company and also redesigning business operations such as supply
chain, human resource, marketing and many other practices. Wesfarmers Company is
originated in the year 1914 and has assorted business processes such as home improvement,
outdoor living, general and apparel products, office provisions, and also has an Industrial
division with productions in energy and fertilisers, chemical and other safety goods. With a
shareholder base of about 484,000 people, Wesfarmers is one of the country's major
employers. The principal goal is to provide an acceptable return for its stockholders.
Wesfarmers is dedicated to proactively managing its community and environmental impact in
order to continue producing value over the long term. The company has set a code for giving
everyone with admiration, valuing diversity, and providing a safe employed environment
(Wesfarmers 2021).

Figure 1 Wesfarmers Limited

(Source: Wesfarmers 2021)

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Company’s supply chain that supports the company’s operational and sustainability
processes
Wesfarmers Company’s operations have been divided into various parts as it has different
groups such as Bunnings, Kmart Group, energy and chemical fertiliser and industry and
safety. The company seek to maintain a robust and respectful relationship with its all dealers.
In the 2020 financial year, the firm worked with approximately 37,000 suppliers and paid
them more than $19.3 billion. In order to offer sustainably sourced products to its consumers,
the company need to build strong and collaborative partnerships with its suppliers and
manufacturers. Wesfarmers' retailers are focusing on getting dealers to use more maintainable
paper, wood, and cotton because of the influence these commodities have on the atmosphere,
whether in production, usage, or disposal.

Supply Chain Integration examines this essential aspect of business at a time when product
design, production, and distribution are changing dramatically and worldwide. A supply
chain that lacks well-organized transportation cannot deliver high value. As a result, logistics
is one of the most significant aspects of any stock chain. Wesfarmers has an effective
transport system that enhances its supply chain by reducing its waste of time and materials.
The customer of the company now is not only local people or neighbours, but they belong
from all over the globe. In order to improve its delivery system, the company has hired highly
professionals to align the pattern of movement of goods in the most convenient manner (Kuei
& Lu 2013). All these supplies and logistic practices effectively support Wesfarmers
operational and sustainability processes. The company effectively addresses a range of other
problems that are significant for business rights and ultimately influence financial outcomes.
The company is always committed to maintaining a strong and respectful relationship with its
suppliers and customers.

The global supply and logistic team of Wesfarmers offers a comprehensive global service
that provides its customers with the access to most attractive and innovative solutions. The
team handles the whole process, including requirement, sourcing, quality control, and on-
time distribution, leveraging new tracking and supply chain drifts and technology. The
company also relies on the staff to manage activities such as freight, customs clearance, and
duty payments (Thorlakson, et al. 2018). Wesfarmers supports a culture of ethical behaviour
among its suppliers as it considers the welfare, wellbeing and safety of workers, and analyse
the potential environmental impacts of its activities in an efficient manner. For enhancing the

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performance of its suppliers, it provides ethical sourcing and modern slavery training to its
employees (Wesfarmers 2021).

Critical factors affecting the company in relation to sustainability and organisational

performance
For garments and energy and distribution companies, sustainability concern is greater than
any other. With the increase in high pressure competition, the companies are highly paying
attention to air emissions, resource wastage, employee welfare and many others. A business's
image and performance might be severely harmed if these sustainability concerns aren't
properly addressed and managed by the organisation. For example, Apple Inc. has been
defendant of using child labour in the production of its iPhones and Macintosh computers; the
Coca-Cola Corporation has been accused of polluting local water possessions in India, and
Dell Inc. has been accused of setting of electronic waste in an ecologically unfriendly
manner. There are various critical factors that are affecting the operational performance and
sustainability of Wesfarmers company such as economic, social and ethical factors (Haseeb,
et al. 2019).

The social factors highly influence Wesfarmers operations as changes in demographic

patterns, such as the ageing population, migration trends, and socio-economic factors, are of
crucial relevance to multinational commercial companies like Wesfarmers Limited. By
analysing the demographic features, the company can select market sectors that have high
growth potential. Wesfarmers Limited must be aware of the general public's attitude towards
migration since this might have an impact on the firm's capacity to attract foreign
management to the host country. While entering markets with high or low power distances,
the organisation must modify its business management techniques. For foreign companies
like Wesfarmers Limited, the changing power structure in many nations is having severe
consequences (Maletič, et al. 2018). Online buying has been more popular among clients
since the introduction of social media and e-commerce. Considering the age disparities,
Wesfarmers Limited. has to understand the online shopping behaviour of its customers.
Mobile phones and social networking sites are becoming increasingly popular, and marketing
and communication strategies must take this into account.

The economic factor also impacts the company as the purchasing power of customers has a
direct impact on their spending habits. It is vital to study and estimate the purchasing power
of consumers based on key economic data in order to understand their preferences and

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spending patterns. Wesfarmers Limited. should spend time studying the purchasing reasons
and societal trends that shape consumer behaviour. It should also seek to identify the extent
of customer ethnocentrism and take into account the country-of-origin impact to influence
local consumers' perceptions of international items. All these factors have a major impact on
Wesfarmers business operations and sustainability. For example: it is very essential for a
company to go with the trend and follow green practices to attract more and customers, and
this will also help the company to earn huge profits and revenues (Wesfarmers 2021).
Wesfarmers is also affected by environmental measures as changes in customer needs are
demanding organic and sustainable products and this affect the organisation profits and sales
in huge manner.

Key operational matters that need to be addressed by the company

In order to survive in the competitive market, there are various operations that need to be
addressed by the Wesfarmers in an efficient manner. The operation manager of the company
is responsible for looking after the production of goods and services. They need to make sure
that there are effective sustainability, globalisation and communication practices adopted by
the company. The major impartial of Wesfarmers company is to deliver a highly satisfactory
return to its shareholders and this is done by the company through providing financial
discipline and effective management of the business diversified portfolio. Last year, the
company was highly reflected for the pandemic of COVID-19 (Ramlawati & Kusuma 2018).
Wesfarmers has determined that the remaining risk of human rights defilements in
Wesfarmers operations is very low. Wesfarmers Code of Conduct and Inclusion Policy
mandates that the Group's separations monitor and address human rights subjects in their
operations. Senior management in each Wesfarmers division is accountable for ensuring that
these rules are adhered to and that human rights are appreciated (Wesfarmers 2021).

The Group has assessed that COVID-19 has created new human rights risks in its supply
chains, such as heightened risks to worker health and exploitation of vulnerable individuals in
key sourcing nations. Wesfarmers maintained to engage fairly with its suppliers and procure
ethically and sustainably throughout the year, despite the challenges of COVID-19. With its
suppliers, the Group was able to maintain commercial continuity and payment arrangements.
Because of the vital role that our suppliers play in assisting us in meeting the needs of our
clients, the company has advanced payments to suppliers during difficult times. It is very
essential for Wesfarmers company to update all its divisional board's step by step for
managing its COVID-19 related human rights dangers in the supply chain. Wesfarmers has

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incorporated moral sourcing management into existing parts. Merchandise and obtaining
team memberships responsible for handling supplier relationships remain dominant to the
approach taken in all separations when it comes to managing ethical sourcing and modern
slavery risks (Sarkis 2020).

Wesfarmers has adopted all effective measures to ensure sustainability in the company. It
effectively follows two major sustainability goals such as gender equality and decent work
and economic conditions. The company provides employment to more than 1,00,000 team
members including front line customers, operational managers, engineers and many other
people. The company effectively bring changes in its operations and make sure that it has
adopted all sustainability practices to gain a competitive advantage (Wesfarmers 2021).

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Conclusion
From the above report, it has been summarised that a business organization's operations
management is crucial for managing, controlling and supervising goods, services and people
in an efficient and effective way. Wesfarmers has won a gold award in the sustainability
section and its operational and other business practices are evaluated in the report. The
company highly believes in maintaining a good relationship with its suppliers for an increase
in its supply chain practices and organisation performance. There is a various external factor
that impacts the company’s performance such as social, ethical and global factors.
Wesfarmers company is highly affected by the COVID-19 pandemic and there are several
measures adopted by the company to enhance its operational and sustainability practices.

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References
Haseeb, M., Hussain, H. I., Ślusarczyk, B., & Jermsittiparsert, K. 2019, ‘Industry 4.0: A
solution towards technology challenges of sustainable business performance’, Social
Sciences, vol. 8(5), 154.
Kuei, C. H., & Lu, M. H. 2013 ‘Integrating quality management principles into sustainability
management’,Total Quality Management & Business Excellence, vol. 24(1-2), 62-78.
Maletič, M., Maletič, D., & Gomišček, B. 2018, ‘The role of contingency factors on the
relationship between sustainability practices and organizational performance’, Journal of
Cleaner Production, vol. 171, 423-433.
Ramlawati, R., & Kusuma, A. H. P. 2018, ‘Total Quality Management as the Key of the
Company to Gain the Competitiveness, Performance Achievement and Consumer
Satisfaction’,  International Review of Management and Marketing, 8(5), 60.
Sarkis, J. 2020, ‘Supply chain sustainability: learning from the COVID-19
pandemic.’, International Journal of Operations & Production Management.
Thorlakson, T., de Zegher, J. F., & Lambin, E. F. 2018, ‘Companies’ contribution to
sustainability through global supply chains’, Proceedings of the National Academy of
Sciences, vol. 115(9), 2072-2077.
Wesfarmers, 2021, ‘Our Businesses’, [Online]. Available at:
https://www.wesfarmers.com.au/our-businesses/our-businesses [Accessed on: 15 Aug, 2021]