Procurement and Supply Management

Executives of the Shoprite Group responsible for Procurement you have noted that the organisation continues to maintain its front-runner position in SAs grocery industry, edging its retail rivals that are reeling from moribund economic growth and lower spend by hard-pressed consumers. Sales for its core SA supermarket business which includes its flagship grocery brand Shoprite, no-frills discounter Usave, and higher income-focused Checkers and Checkers Hyper increased by 7.8% while internal inflation (a metric used by market watchers to assess the price movements of selected goods) fell to 0.4%. Even after factoring in internal inflation, sales volumes grew by 7.4% compared with 3.3% during the same period in 2016 (sales of 10.7% and inflation of 7.4%). Given this solid showing from the group in a market that has seen competition intensifying more than ever for consumers wallet share. You have noted the need to further muscle competitors mainly including Pick n Pay, Spar, Woolworths and Massmart using lower food prices to assist the poor and aggressive promotional activity and this can only be achieved through the adoption of competitive supply chain management strategies. With exclusive reference to the Shoprite group, you have been requested by the CEO to provide a review of the state of procurement and supply chain management for the organisation addressing the following questions: Introduction

1.5 there has been varying opinions between top management regarding outsourcing of supply chain activities within Shoprite and how this can contribute to sustable savings. You need to put together a report for the other executive managers citing the role of procurement in insourcing and outsourcing. Report should include introduction, findings, recommendations and conclusion. (50)