H Mart Company
Super H Mart Company operates a chain of grocery. The company sells ready to serve food products, noodles, side dishes, snacks, kelp, powders, and blends. It also offers drinks, sauces, and flavors. Besides food products, it sells various kitchen items such as rice cookers, blenders, as well as copper to restorative cleansers and chemicals cleaners for kitchen and restroom needs. The international supply chain management is one of the key activities that determine the success of a company. Super H-mart has a very innovative and hardworking supply chain team led by their supply chain manager Mr. Khaldoon. Mr. Khaldoon manages the company’s international supply chain. I managed to have a word with him and he gave me some elaborate answers about the company’s international supply chain management, which I will discuss in this paper.
I wanted to know the qualities that a top-performing international supply chain system like that of Super H Mart should possess. As indicated by Mr. Khaldoon, Super H mart’s supply chain management incorporates three components; good distribution practices, which is done using the company’s trucks. It also uses technology to manage its supply chain system. The benefit derived from this supply chain management involves time-saving, enabling a cost-effective management of inventory, and improving on product forecasting.
I also wanted to know whether H mart’s international supply chain management is purely based on technology. According to the global supply chain manager, Super H Mart supply chain management (SCM) procedure is not completely based on technology. The organization has a sprawling network of more than 300 distribution centers covering around 120 million square feet. These distribution centers are all within 100 miles from Super H Mart supply’s facilities.
The company has additionally established cross docking at its distribution centers, a technique that moves stock straightforwardly, to the required destination/ user. Items are transferred from an arriving truck and stuffed in a truck headed for a store, without long stockpiling in the stockroom. This tactic enables the facility to lower costs for storage and transportation expenses. The manager also indicated that Super H Mart utilizes robust tracking methods to ensure its drivers are competent. All drivers have high standards in transport in terms of safety and obeying traffic laws. To achieve this performance, the company ensures that all its drivers have at least four years and more than 200,000 miles of driving experience. In addition, the drivers are expected not to have caused any preventable mischances in the last three years.
I was also interested in knowing the components of the company’s supply chain management. According to the interviewee, H mart’s general techniques for supply chain management vary little from the principle segments of most supply chains: acquiring, operations, conveyance, and reconciliation. In any case, the company has refined the strategies. A store network starts with the directors determining the items to offer, discovering merchants, and masterminding bargains for the items. The operations bit of a supply chain concentrates on planning, stock management, and forecasting the consumer interest for an item, using his/her of authentic information. Demand planning is utilized to make precise estimates, a basic stride toward successful stock management. Estimated supply quantities are compared with stock levels to guarantee distribution centers have sufficient stock to take care of demand. Once this process is complete, the completed products are supplied to various stores.
H Mart was started in Woodside, New York, in 1980. During this time, it operated as a little corner shop grocery. In 1999, the business opened its offices in Lyndhurst, New Jersey, where its current headquarters are located. In the 1970’s, the organization started a rapid expansionary process by including ten other stores within five years. It concentrated in most parts of Northeast, but in 1997 the company started its move to venture in other foreign regions. It started by opening a store in Virginia and progressively entered into new markets. At the start of 2006, H Mart had 18 grocery stores. However, it had increased this number to 24 by March 2006. Starting 2014, there were more than 43 Super H Mart stores over the United States, in New York, Illinois, New Jersey, Maryland, Michigan, California, Texas, as well as in international markets such as London, Paris, Amsterdam, and Berlin.
Due to the high demand for its products internationally, in 2004, H Mart started by venturing into Western Canada. The business first store was in Coquitlam. Later, the business opened three other stores, on in Downtown Vancouver another in Richmond, and the third in Langley. The presence of many Asians in Europe motivated H Mart to enter Europe. It opened its first store in 2011 in New Malden, London. In 2014, H Mart opened another store in UK, at Tottenham Court Road.
When entering the international market, the company made a couple of mistakes. The major one was discriminating against whites in the hiring of staff. This happened in 2006, in Canada; as a result, the company was sued for attempting to be an Asian only employer. Although the company won the case, this case tainted its image and resulted in decreased sales for that period. The company also did not consider the territorial jurisdictions such as licensed innovation rights, wellbeing and natural models, tax collection frameworks, traditions obligation, dialect, shopper assurance laws, and installment runs in Europe. These issues led to lawsuits against the company.
A key global strategy of Super H Mart is to rule the retail grocery market in many regions of the world. The company’s international supply chain manager has put in place a retail reasoning that it follows. H Mart is a rebate retailer. Therefore, it sells its items at the least possible prices. By selling the products with a low markup, the company is able to win the benefit of an expanded volume of sales. In particular, the company utilizes the sales maximization strategy. Concerning payment of suppliers, H-Mart pays its suppliers regularly after delivery of products. The period taken for each payment depends on the terms of contract with the specific supplier. Through this means, its suppliers are always assured of a regular pay for their products. H Mart on its side, it is always assured of regular and consistent supplies.
Another key strategy of H Mart is to expand internationally. A keen observation of the number of its international stores plainly demonstrates the company’s strength and power in the international market. At present, the organization claims more than 2000 stores around the world. More than 1000 stores operate in international markets. The company plans to increase its business in more than three continents in future.
H-Mart uses a detailed and sophisticated supply chain network. Its supply chain starts by hiring managers who figure out which items will sell, discover merchants, and orchestrate bargains for the items. The operations part of the supply chain concentrates on placing orders for supplies, formulating business strategies, and managing inventories. Demand planning is utilized to make precise estimates of the inventories that the company should buy. Projections are then compared with stock levels to guarantee distribution centers have enough supplies.
The supply chain department is charged with the duty of transferring inventories from stockrooms or assembling plants to stores. Supply chain network integrates the stream of work and data among all connections in the supply chain to expand inefficiencies. For H Mart, its SCM strategies reduce the cost for items and stock. They also result in better control over selection in its stores and in turn lower the selling price of its products.
Like all businesses, H Mart is faced with a lot of international risks. Major intentional risks faced by the company include delays in the delivery of products to the respective international grocery stores. Delays may also lead to a loss of customer loyalty and in some cases lawsuits may be filed against the company. Rejected shipments are also a risk for the enterprise because a rejection may cause some of the perishable products to go bad. There is also a risk of contamination of the food with insects, mainly due to issues with the supply department. To mitigate against the risk of shipment rejections, the company needs to have all the shipment documents ready before initiating the supply process. H-Mart should also use efficient airlines and faster transportation network to reduce the risk of delays.
The post 9/11 laws have led to more delays at the airports, which has slowed transportation of H-mart products. These laws include the enforcement of stricter rules on passenger and thorough luggage screening. In addition, imports and exports are subjected to more scrutiny in order to prevent any security breach. Whereas these processes are necessary for national security, they are at expensive and strenuous for businesses such as H Mart.
The compliance manager, Mr. Issachar, manages the company’s international compliance. Together with his team, the manager pursues the goals that organization aspires to achieve in their efforts to ensure that the company complies with relevant international laws and regulations. H Mart is not currently a C-TPAC member. Businesses that are members of this group enjoy the privilege of supplying their products more efficiently and less costly since these items are not subjected to thorough scrutiny at the airport. Nonetheless, the business must first fulfil a set of specified requirements. According to Mr. Khaldoon, the company will be certified once it meets all the requirements set by C-TPAC regulators.
H Mart international strategy of being the market leader in the retail grocery market in the markets where it operates is a feasible strategy, which the company has implemented effectively. The company’s international supply chain manager has set up a detailed strategy that the organization follows. In particular, this strategy lowers the company’s selling cost, which enables it to attract most buyers.
|Board of directors|
H Mart’s Organizational Chart
Mr. Edward Michael
|Human resource manager
Mr. Patrick Hang
|International Compliance manager
In order to reduce the business risk, H Mart must develop a robust supply network, which will ensure that the company has a stable supply of all its commodities. The use of multiple suppliers will ensure that effects of weather changes in a particular region do not adversely affect the company’s stocks on food products. For example, storms, drought, and flooding are now a common global calamity due to changes in weather pattern; therefore, suppliers from different regions can safeguard the company against this risk. In addition, H Mart must also regularly train its employees to ensure that they are competent enough to offer consistent high quality products. This method will protect the company’s reputation from been tarnished by due to bad service.
The current business strategy of the company is appropriate. The move towards diversification has enabled the company to spread its risk in various continents and markets. As a result, their business is protected from regional effects on political, economic, and social changes. For example, because the company is diversified, the company may not have negative overall performance because of a slowdown in a specific market’s performance.