Woolworths Supermarket and its Sourcing Strategy
Strategic sourcing refers to the institutional procurement process that can help in improving and re-evaluating purchasing activities in relation to a company. Strategic sourcing is indicative of a service solution that is customized so that it can meet the needs of the individual client. Supply Chain Management is indicative of the planning and execution pertaining to supply chain activities that can help in creating net value for an organization. It helps in the building of competitive infrastructure and the leveraging of worldwide logistics that can help an organization in making profits. Woolworths Supermarket refers to the Australian supermarket which is owned by that of Woolworths Limited (Woolworthsgroup.com.au 2018).This report discusses about the sourcing strategy of the company. It elaborates on whether the sourcing strategy can be said to be sustainable. It critically analyses the sourcing strategy of the company and suggests recommendations that can help in improving the sustainability pertaining to sourcing strategy of the company.
Woolworths specialises in the selling of groceries, health product, household product, baby supplies along with stationery items. The company is instrumental in operating 1000 stores within Australia. The company was initially founded in the year 1924 and the consumer interest started to grow on account of the opening of more branches of the company. Woolworths started to sell different kind of goods and they provided the facility of cheap pricing along with money back guarantee. The customers can get a wide range of choices for shopping at Woolworths that has ensured the profitability of the company. Woolworths was chosen for this report as the company has actively taken an approach towards sustainability that has have a positive influence on the economy and the environment of Australia (Fernie and Sparks 2014). Woolworths wants to give rise to a better world by ensuring sustainability pertaining to its supply chain management process. The company was chosen as it has adopted an integrated approach in relation to sustainability that has made it more responsible to the needs of the modern day consumer.
The largest food retailer of Australia called Woolworths Supermarkets is aware of the fact that supply chain operation being efficient can help in the delivering of fresh food to a large number of customers throughout Australia. Woolworth has made use of B2B integration platform that has provided real time integration with the supplier system. The platform helps in leveraging AS2 protocol for facilitating business to business communication. This kind of specification can help in the aspect of automated order fulfilment among the different business my making use of internet (Monios 2015). Woolworths chose the SPS Commerce as a strategic partner that helped them in the aspect of integrating with the supplier community. SPs has got a track record pertaining to the assisting of suppliers that has provided the company with strong technical capability.
B2B Integration and its Role in Improving Supply Chain
SPS has extended enormous amount of help in supporting the suppliers of Woolworths for adopting e-business standard along with technology for a period of more than 10 years. SPS is instrumental in providing e-business fulfilment service to the suppliers of Woolworths and it helps them in managing of 100,000 documents in a month. The technology enabler can help the organisation in achieving success within the e-commerce sector (Hingley, Lindgreen and Grant 2015). The sourcing strategy of Woolworths works in the omni-channel pattern that helps the company in the aspect of streamlined fulfilment.
Woolworths engages in regular consultation with the suppliers that helps in emphasizing on the supplier excellence standard of the company. Supplier segmentation is being undertaken presently that forms a part of ethical sourcing review. Woolworths has adopted the Local Food Sourcing Strategy that has brought more locally produced foods to the supermarkets across that of Australia. Woolworths supports the local suppliers that can ensure its sustainability in the prevailing environment. Woolworths has also appointed local sourcing manager to that of the individual state. These managers can help in the identification of local product. Is the current sourcing strategy sustainable (Mangan, Lalwani and Lalwani 2016). Local sourcing road show can be hosted that can help in communicating new opportunities in relation to the local suppliers.
Woolworths has also developed individual ranging plan for the local suppliers. Woolworths has acquired a new local supplier called Eric Robinson that has helped the company in extending support to the local community. The sharing of the flavours of the community can help in ensuring the sustainability of Woolworths and help them in reaching a wider range of the customers. The customers of Woolworths wants the company to reach out to the local communities that can help in sourcing more local food (Mena and Bourlakis 2016). This new strategy can be effective in allowing the stores to tailor individual ranges that can cater to the taste of the local community.
The B2B integration of Woolworths Supermarkets can help in improving the supply chain visibility in relation to the company. It can help Woolworths in improving the factor of supply chain responsiveness and reduce the operational cost of the company. The business integration can help a company in getting access to a large number of suppliers and enable the fostering of partnerships. The AS2 trading solution can come to be great use for Woolworths and it has eliminated the need pertaining to value-added network. AS2 document transport protocol of Woolworths has helped in meeting various kinds of challenges. It has facilitated the exchange of business data in a secure manner and it has produced high-level architecture for the business (Bell, Gallino and Moreno 2015). The AS2 platform can help Woolworths in the aspect of flexible data transmission and authentication. It can help Woolworths in exchanging the purchase order, shipment notice, invoice, payment and that of the remittance files. The AS2 transaction can take place within the real time that can help in increasing efficiency pertaining to document exchanges (Christopher 2016). The using of AS2 protocol can ensure the sustainability of the company in the global competitive environment.
Sustainability of Woolworths Supermarket’s Sourcing Strategy
The choosing of SPS Commerce as the strategic partner can help Woolworths in remaining sustainable in the market. SPS Commerce is instrumental in providing supply chain management software that is cloud-based to the retailers, logistic provider and the partners. SPS Commerce adopts a full service approach in relation to people, process along with technology that can help a business in running in a more profitable manner. SPS has helped Woolworths in spending less amount of time in managing systems that can put more time at the disposal of Woolworths for serving the customer (Varley 2014). SPS Commerce has helped Woolworths in working successfully and they have been able to replace manual process with that of automation. Their pioneering cloud-based EDI has helped in re-definition of the market which was traditionally served with the help of on-premise software provider. They have replaced it with an innovative system that can help the retailers in manage the vendor communities (Ramanathan, Subramanian and Parrott 2017).
The digitally-native consumer has been able to transform that of the retail landscape. The consumers in the present age want more options in relation to products, from where they buy it and the manner of delivering of a purchase. Retailing has become complex in the present age and it is important to manage the trading partner relationship in a simple manner (Agrawal, Singh and Murtaza 2015). SPS Commerce has got expert team that can handle the technical details very easily that can greatly benefit Woolworths Supermarket and ensure its sustainability.
Supply Chain Segmentation has been resorted to by Woolworths that has helped in segmenting supplier base that can help in ascertaining level of engagement with the specific suppliers. This can help in providing a company with the right amount of resources that can help them in managing supplier at the different levels (Jia et al. 2017). The supply chain segmentation can help the company in collaborating with organization that can help in delivering unique value to the consumers. Collaboration level has helped in proving the company with strategic and competitive advantage that can help the company to sustain itself in the market in the long run. It can facilitate the process pertaining to the sharing of knowledge that can prove to be crucial for the success of an organisation.
The supplier segmentation has helped Woolworths in deciding the spend threshold in relation to each segment on the basis of the suppliers (Chen and Guo 2014). It can help Woolworths in considering the aspect of year to year growth within suppliers spend that can help in providing insight in future pertaining to supplier engagement level. The product of the supplier can enhance the experience of the customer and it can prove to be of great use in increasing the customer base of a company. The supplier segmentation will be able to help the company in increasing the number of customers (Selvaraju, Beleya and Sundram 2017). It has increased the organisational efficiency and helped in bringing profit for the organisation. The precise segmentation has helped the company in identification of key value driver and selection of the right engagement level that can add to the profit of the organisation.
Recommendations for Improving Sustainability of Sourcing Strategy
Woolworths can make use of source tagging solution for improving supply chain management. In the present age, there is increased awareness in relation to volume of the merchandise across different channels and source tagging can help in informing inventory management that can help in making better business decision. The warehouse stock level of Woolworths should be continuously monitored that can help in replenishing of stocks in the event of the sensors detecting an out of the stock situation (Varley 2014). The tagged goods within the warehouse can help in guiding the pickers to that of the exact location. Precise level pertaining to inventory visibility can help en ensuring that the retailers know regarding in which stage of the supply chain the products are. Standard like that of Electronic Product Code can be made use of by Woolworths that can help in enabling Radio Frequency Identification that can help the retailers in pinpointing the inventory within real time (Ramanathan, Subramanian and Parrott 2017). It can help in providing Woolworths with an efficient way that can help in delivering promise to customer. Woolworths can combine the RFID-enabled inventory with sophisticated electronic surveillance that can help the retailer in gaining real time insight into various aspects of the supply chain. Woolworths should align the supply chain with that of the marketing teams that can prove to be crucial for the success of Woolworths. The marketing department of Woolworths should be able to alert supply chain in the event of a big promotion so that the team of supply chain will be able to determine the amount of product that will be needed and the manner of shipping of a product.
Conclusion
Strategic sourcing can be taken recourse to by an organization that can improve purchasing activities in relation to a company. The consumers can get various kinds of choices at the Woolworths supermarket that has helped the company in making a lot of profit. The B2B integration platform is used by Woolworths that has helped the company in making real time integration with that of the supplier system. Woolworths has leveraged the AS2 protocol that has helped the company in maintaining communication. This has helped the company in the arena of automated order fulfilment in between various business by using internet. AS2 platform is used by Woolworths for the aspect of data transmission. This can prove to be effective for Woolworth in exchanging of purchase order, invoice and the remittance files. Woolworths has chosen SPS Commerce in the form of strategic partner that has assured the sustainability of the company within that of the world market. They have provided Woolworths with supply chain management software that have greatly helped the retailer along with other logistic providers. The full service approach made use of by Woolworths in providing facilities to people and the process can help the organization in making profits. Woolworths has used the supply chain segmentation for segmenting the supplier base that can successfully help in the process of engaging with suppliers. This can put at the disposal of the company large amount of resources that can help in the process of managing of supplier at various levels.
References:
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Woolworthsgroup.com.au (2018). Woolworths Group: Quality Brands and Trusted Retailing. [online] Woolworthsgroup.com.au. Available at: https://www.woolworthsgroup.com.au/ [Accessed 3 Sep. 2018].
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