Discussion
Woolworths Supermarket which is also known as just Woolworths is a subsidiary of the Woolworths Group and is a chain of supermarket or grocery stores. The supermarket was founded in the year 1924. There are several grocery items that are sold in Woolworths such as fruits, meat, vegetables, packaged food and others. Along with groceries the supermarket also sales DVDs, beauty and health products, magazines, stationery items, pets and other items. There are almost a 1000 stores of Woolworths which are dispersed all over Australia. Out of these 1000 stores 19 of them are convenience stores which operates under the same logo of Woolworths and the rest 976 are the supermarkets (Woolworths.com, 2018). The company has around 115000 members who are employed in their support offices, stores and distribution centres. They focus on providing their customers with quality experience and products at a good price. All of the products that they supply are fresh and the fruits, vegetables and meat are supplied form the growers and farmers of Australia. Woolworths Supermarket also provides the opportunity to the customer to shop from the comfort of their homes by developing the province of online shopping of groceries and other retail items which they deliver at the desired time to the desired place of the customer.
This report contains the logistics and the supply chain management of the supermarket and evaluates the current position and the development of their supply chain. It further determines the main factors which have led to the success of the supermarket and have ensured that they are successfully operating in the retail industry. The external and internal audit has been discussed as well along with the strategic problems or issues that are being faced by the company followed by a conclusion which will provide a summary of the whole report.
Current position in logistics, supply chain management
The supply chain of Woolworths is efficient in their operations since they realise that by managing a proper supply chain they will be able to make numerous home deliveries every day to several customers all over Australia. Woolworths provided integration with the system if their suppliers and create a business to business platform on their own so that they can make their supply chain more efficient. The platform uses the protocol of AS2 for their communications between businesses which takes the help of the internet to automatically fulfil their specific orders (Islam et al., 2013). Woolworths has four strategic partners for their B2B integration with the community of their suppliers, one of them being SPS Commerce. SPS Commerce was chosen by the supermarket chain as the company had a good track record of providing good assistance to the suppliers in the adoption process of e-commerce. As of today, SPS Commerce provides services of e-business to numerous suppliers of Woolworths. Woolworths ensures that the function of supply chain is properly managed through SPS Commerce so that they are able to properly deliver their items to their customers and this smooth delivery would help them to grow in the market regarding the aspect of deliveries and supplies (Seuring, 2013).
Current position in logistics, supply chain management
Another company that provides supply chain functions to Woolworths is TradeStone. This company also provides a platform to the supermarket chain so that they may be able to manage their orders as well as their suppliers, their financials, their business connections and enable a connection between numerous suppliers. This shows that Woolworths have investing in more than one companies which offers the same services to ensure that their supply chain is expanded and that they can serve more number of people both locally and internationally. Woolworths have adopted a single system for product development which helps to increase the banner of their brand and also offers a larger range of products for delivery to their customers (Waller & Fawcett, 2013). Other than these strategic partners, Woolworths has also invested in several other technologies of supply chain such the SOA registry (service oriented architecture). This technology will help Woolworths to determine the performance and the success rate of their supply chain and also identify those processes which needs to be improved to make the performance more efficient. This tool would help Woolworths to determine their shortcomings in the logistics and supply chain management and develop proper strategies to overcome the same and create a strong and complete system.
Critical success factors
Critical success factors are the things that helps the organization to survive and function properly and have a prosperous functioning in the market that they operate in. Woolworths Supermarket have been operating in the Australian supermarket for a long time and have been able to succeed in establishing a strong foothold in the market among the other strong player of the retail sector. They have been adopted certain strategies which have enabled them to operate in a way which are liked by their customers and hence they have been able to acquire a good customer base which boosts up their sales (Norton, 2015). The factors which made it possible for them to succeed in the market are as follows. Firstly, they maintain a strong supply chain management which is a very integral part of the retail industry. In such a sector which requires continuous delivery of products from suppliers to customers it is important that an efficient supply chain is developed so that the customers are able to smoothly purchase the products that they desire and the supermarket also ensures that all kinds of deliveries are made within the stipulated time to their customers. The supermarket also ensures that their online delivery system is also developed properly since they realise that the online purchases are mostly hyped during the special occasions and hence it is mandatory that the system is available to the customers (Makhitha, 2017).
Secondly, the online services of the company has to be strengthened and for this purpose the company makes several investment in their information technology services. Their tagline is Fresh Food for People which they follow judiciously follow through their delivery channels. Their aim is to deliver fresh food to the people who take deliveries from them. Since the retail industry is famous for leaving their customers dissatisfied with their performance, it has become a critical success factor for Woolworths since they deliver good quality products and focuses on the satisfaction of their customers (Thompson & McLarney, 2017). Thirdly, Woolworths ensures that the customers who arrive at their supermarket goes through a good shopping experience and hence, they hire good staff for their retail stores. They ensure that the staffs who work in their supermarket are quality workers who will be able to provide the best of the services to the customers who arrive for shopping. These three are the main critical success factors of the supermarket which helps them to gain a competitive edge over the other retail stores in the industry and make sure that they are able to attract more customers.
Critical success factors
External audit
External audit is the independent sector which is situated outside of the main organization where the actual audit is taking place. External audit focuses mainly on the finances, the account or even the risks that are faced by the organization in tis financial aspect. The external auditors are often hired by the shareholder of the company who wants to get an insight about the financial occurring of the organization and every deep information stating the complete report of the same (Al-Rassas & Kamardin, 2015). The main focus of the external auditors is to conduct the annual audit which is part of the statutory of the company and determine whether the provided financial records have been falsified or are true as stated. The external auditors sometimes also manage the internal risks that are being faced by the company so that there is no influence on the financials of the organization. The external auditors is not an employee of the company or associated to them in any way. This is because a person who is not related to the organization and its people will be able to provide the correct judgement regarding the financials of that company. The external auditors are experienced and knowledgeable in their field of work which is auditing.
There are three objectives to hiring an external auditor. The first and the most important goal is to access the financial records of the company by someone else to determine that the financials are true and complete (Davidson, Desai & Gerard, 2013). The second objective is for the company to show that the standard practices of accounting are being followed by them while developing the financial records. The third objective is to present the balance sheets any other financial statement for review so that the auditor may derive that the information given in them is correct. The audit is done by first reviewing the whole company and gathering knowledge about it. The financial environment is also identified by the auditor who then explores the internal controls of the organization. The expenditures and purchases as well as the assets of the company are evaluated by the auditor (Lombardi, Bloch & Vasarhelyi, 2014). Woolworths Supermarket has an external audit once every year where their performance and the financials are reviewed and they have yet not been seen under suspicion of falsifying any financial record. The auditor who conducts the audit of Woolworths Supermarket provides them with a list of all the issues that is being faced by the supermarket.
Internal audit
Internal audit is the function through which the financials of the company are checked in the same way that it is done in external auditing. However, in internal auditing, the auditor is a part of the company but report s to the auditing committee directly. The internal audit is also a separate department which is located within the organization (Pizzini, Lin & Ziegenfuss, 2014). Internal audits can be both financial as well as non-financial and covers a huge area of the business and helps to develop the audit plan. The internal audit helps to determine the key risks which are being faced by the company and what steps could be taken by the organization so that the proper management of the risks are done. This is done so that organization can fulfil their objectives and grow in their field without any drawbacks. The risks can be of several types being both financial and non-financial (Lenz & Hahn, 2015). Risks such as the bad reputation of the company are also solved through the internal audit process. Like external audits it is not done only once year but can be done multiple times based on the requirement for the audit. The audit reports that are derived fork the internal audit are studied and analysed by the management to form strategic goals for the benefit of the company.
External audit
Woolworths Supermarket conducts an internal audit often to understand the financial as well as the practical or non-financial scenario of the retail. The auditor who audits the supermarket first of reviews the whole supermarket and the process that it is operating in. Since the auditor is an employee he will be well-versed with the process of the supermarket. Then the internal and external conditions of the company is evaluated as well as the laws and the regulations that it follows or does not follow (Zaman & Sarens, 2013). The findings are then analysed and proper recommendations are provided by the auditor to solve the issues that they are facing.
Strategic issues
Despite its strong foothold in the market Woolworths faced many downfalls due to certain strategic faults that were made by the company itself. The supermarket chain had not been able to understand the market and have taken certain steps which went against the company and hence they faced strategic issues in their operations. These strategic issues are as follows. Firstly, they copied the strategy of Coles which was Down Down and initiated their own strategy which was Cheap Cheap. This strategy was devised with the aim to make the prices of the products cheap since they figured that the consumers would be attracted to the low prices of the product due to the extreme economic pressures that have erupted in the country (Dakora & Bytheway, 2014). However, this proved to be a failure for the company since the people were not impressed with the low prices and did not want to purchase the products of Woolworths. The company would not have had to endure this failure if they would have understood the requirements of the market. They should have focused more on the quality of their products like their tagline depicts instead of lowering the prices. Their view that people would purchase more of their products if their prices were low proved to be wrong and this would have been opposite if they would advertised about the good quality of their groceries and other products.
Secondly, they were not able to meet the demands of the customers during their cheap cheap campaign. The campaign even though a failure saw a hype during the initial stage of its initiation. However, the company should have anticipated the number of the people who arrive at their stores once they officially announced the sale. There were a major group of customers who went back dissatisfied since the supermarket was not able to supply the right quantity of products according to the arrivals of the customers and their demands. This was also a drawback that they faced in this campaign which affected their brand. To avoid this the company should have made a proper list of their inventory and the amount of products that they can supply to the store and they should have announced the strategy based on those numbers (Methner, Hamann & Nilsson, 2015). A huge sale would have meant a huge amount of available products so that at least a major percentage of the customers could have purchased it, however only minority of the people were able to purchase the products and very soon the stock was cleared. The above mentioned strategic issues are the major ones because of which the company had to face a downfall in their operations and their brand name was affected.
Internal audit
Conclusion
Hence, it can be concluded that Woolworths is a successful chain of supermarkets who have been operating in Australia for a long time. On the front of logistics and supply chain management, the supermarket focuses on the investment of supply chain technology along with aligning to two strategic partners who will help them to run a smooth supply chain management system. There are several factors which are responsible for the success of the supermarket chain. The company conducts an external and an internal audit every year so that they can show that they have a complete and clean financial where the records have not been falsified. There are also certain strategic problems that are being faced by the supermarket chain and these issues needs to be solved as early as possible so that Woolworths Supermarket can function properly.
References
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