Efficiencies and Ineffectiveness of Woolworth and Possible Changes
Discuss About The Merchandising Of Woolworths Global Sourcing.
In this report a study has been done regarding the operation management principle and technique and the concepts have been applied on the actual operation of Woolworth. The key effective and ineffective sides of the supply chain of Woolworth have been identified and changes have been suggested. The importance of factors like facility layout has been done in this report. The importance of inventory control has been done in this report. The importance of supply chain management has been described and the factors that play the vital role in making decisions have been done in this report. The concept of forecasting has also been analysed in this report.
The Woolworth supermarket is a retail store chain in Australia. It started its operation in the year 1924. This organisation has 80 per cent share of the entire retail market in Australia. The chief products that are sold by the organisation are grocery products. It operates in 995 locations across Australia and has 111,000 employees (Woolworths 2018). It also has operations in New Zealand.
The key aspect of operation management is to take in inputs and transform them in making effective outputs. The process of transformation involves planning; scheduling and control which is part of operation management this play a vital role in the success of the business. The retail operation involves the entire process from the moment the product has been identified till the entire process of purchasing has been done and the cash memo has been received. The retail operation of Woolworth is aimed at ensuring that the operation of the store is done perfectly. The several activities in this regard involved managing employees, managing supply chain, the layout of the store, cash operations, inventory management, data management, prices and offers made by the store.
In Woolworth most of the operation activity is conducted by internet that is used in the back of the retail stores. The success of the business operation is dependent on the systems that are used for operation management (Humayun 2016). The priorities of certain functions in a store operation can be selected to be divided and the entire operation management can be viewed from their perspective. These key positions involve retail owners, store managers and sales associates.
Operation in terms of the business owner: the key function of the business owner is the development of strategy. This involves several aspects like the feasibility of the current operation as well as ensuring that the future of the business is ensured. Some of the key changes in operation decisions that can be taken by the organisation involve the implementation of the e-commerce website. This is a long term operations strategy. The hardware that is going to be required for the business operation is also a decision that is taken by the business owner. Another key aspect that has to be dealt by the business manager for operation management of the organisation is the detection of unlawful activities that are being performed in the store. Some of the key issues in case of large retail store organisations involve the printing of the tickets and their cancellation (Matthei 2008). The store owner should install software that checks for approval and maintain the records to ensure that there are no fraudulent activities that are conducted in this regard.
Importance of Facility Layout and Inventory Control
Operation in terms of store manager: the store manager has to be associated with the operation of the store more intricately than business owner. The store manager involves several regular operational functions like the opening of the store, closing of the store and handling the cash transactions. The size of the business operation of Woolworth is so large that it is not possible for the organisation to manage its operation without noting the operation of the organisation (Matthei 2008). The manager of the store should have enough autonomy otherwise taking decision can form bottlenecks in operation of the organisation.
Operation in terms of sales associate: in terms of the functions of sales associate it can be said that they are least responsible for the functions of operation that are beneficial for the organisation. They are a part of the way operation is being conducted in the organisation, the key operational functions that can be conducted by the sales representative on their own to ensure that there is high level of sales from the organisation are ensuring that the operational function of the organisation that is assigned to them is done in proper time. Secondly they should ensure that the product visibility is higher.
The existent practices of Woolworth are effective but there are scopes of improvement in it. The Woolworth is a large sized organisation with small span of control. The organisation has also reached a stage of maturity and in this case there are operational changes that are to be implemented to ensure that the operation of the organisation is bettered. One of the key operational changes that can be included by the organisation is the introduction of the mPOS or the mobile POS (Batt 2009). The use of mobile POS has reported to increase sale. This is an operational transformation that can change the current market positioning of the organisation.
The facility layout is the way in which all the staffs are arranged inside a facility to ensure that the operation process is smoothly run. There are several factors that are to be considered in case of facility layout first is the space that is available for the organisation; secondly the product that is aimed to be produced or sold in case of Woolworth, insurance of the safety of the user of the facility and most important is the fast and effective production. Every centre that is engaged in economic activity operates in a certain space and thus it is of importance that it is thus arranged that the economic activity can be properly done.
The facility management in Woolworth is designed to ensure that the customers are able to gain optimal experience of shopping. Each store of Woolworth has elements like refrigeration, centralised air condition, electrical equipments, fire safety, hydraulic, equipments as well as recycles management. The facility management of the Woolworth group is headed by Trent Mason he is the general manager of facility management within the organisation. The retail FM has been outsourced for the development of the facility design of the organisation which has been considered as one of the most innovative facility management design.
Fig 1: Facility layout of Woolworth
Source [Beneke et al. 2012]
The inventory control is the method that is used to ensure that there are no problems that are faced in the flow of production or sales of product. The key aspects of the inventory control are the purchasing of raw material, shipping, receiving of the material, tracking the product and warehousing or storing. Recording turnover and reordering is also important part of the inventory control.
The inventory control in case of retail stores like Woolworth is likely to be dependent on factors like shelf life. There are numerous products that are present in the retail store some of the products have high perish ability and others have low perish ability rate. The strategies like LIFO or FIFO that is to be applied in case of inventory management in retail organisation is highly dependent on the perish ability of the product which is termed as shelf life (Stevenson and Hojati 2007). The smaller shelf life has to be sold faster than the longer shelf life materials.
Supply chain management is a complete cycle from the procurement of the raw material, production process, inventory management and operational factors like logistics. It studies the business from the very start of the production of a product till the finished product is consumed by the customers. This involves the several factors that are interdependent with each other and results in the effective functioning of an organisation. This involves activities like designing, developing plans, execution of the plans and proper monitoring to match the demand and supply within a business most effectively. It is integrated approach that takes its vital aspects from several fields of study.
Fig 2 Supply chain management
Source:[ Rummler and Brache 2012]
There are several factors that impact the supply chain management of an organisation. Some of the factors that can be considered to impact the supply chain management involve environmental uncertainty, information technology, supply chain relationship, and value adding, supply chain management performance, business management and customer satisfaction.
The environment uncertainty is the change in the several aspects like customer base, number of competitors and the technology that is available. The government policy can impact the supply chain management considerably (Tompkins et al. 2010). Overseas issues like social uncertainties in terms of environment culture etc can also impact.
The supply chain relationship is one of the key factors that are impacted by the supply chain management within an organisation. This involves proper sharing of information and model of relationship between the customer and the supplier.
The value added process factor is only applicable for manufacturing supply chain management.
The supply chain management performance involves some of the most important aspects of measurability like the nature inclusivity, universality, measurability etc.
Business planning involves factors like leading, organizing, proper monitoring and having the ability to control. This is basically the method that is used to maintain the process of ensuring management of the networking between organisations or companies. It involves factors like sharing of innovation as well.
Most important factor that influences the supply chain management is the satisfaction of the customer. This is the key aim of any organisation (Russell and Taylor-Iii 2008).
There are 4 key aspects that are dealt by the demand forecasting of an organisation are the inventory management, sales revenue, operation planning and marketing activity. The demand forecasting is crucial in the retail organisations because it impacts the inventory costs, increasing the cash turnover and responding quicker to market trends. There are scientific forecasting techniques that are used for ensuring that the forecasts that are made are done more accurately. The accuracy in the demand forecast can impact both sides of the distribution the top line as well as the bottom line.
In the day to day operation of the Woolworth the questions that are to be dealt with involves the number of units that are going to be required in a particular unit of time. There is a certain set up that has to be developed within the organisation to ensure proper forecasting. There is a certain amount of expenses that an organisation has to undergo while the forecasting facility has to be developed. But once this is done the profit that it is going to generate over the period of time is innumerable.
The importance of forecasting can be judged by the fact that if the forecasting is not done than chances are there that the demand is not going to match with the supply. In case the demand is outweighed by supply the organisation is going to lose out on opportunity cost. And in case the supply is more than the demand that is produced there are several possibilities if the shelf life is short for the product there are chances that the product is going to be wasted and in case the perish ability of the product is high than too there can arose difficulty in making arrangement of the products. In both the cases the organisation is encountered with losses. It can also cause dissatisfaction among the customers and also impact the image of the company in the market.
There are certain factors that can create certain change in demand in retail sector. The weekends are more likely to have higher demand than in the week days. There is also an increase in demand in case of festivities (Stevenson and Hojati 2007). It is also important for the organisation to store relevant products in times of festivities. All these functions can be done through proper forecasting.
Some of the key issues that are faced by the operation and quality management practices involve
Transportation problems: the transportation problems that are faced by the operations and quality management involve the aspect of transportation of goods that has less shelf life in terms of quality. The second that has remained in the regard is routing.
Green supply chain and logistics: this is another hot issue; there is increase in the level of awareness regarding the environment. Thus there is a demand in terms of transport and storage and other such functions that are done in the most environment friendly manner (Shepherd and Günter 2010).
Conclusion
In conclusion it can be said that there are several aspects of operation of Woolworth as it is a retail organisation. The key operational aspects involve the starting of the purchasing function till the actual purchase. The key issue of this organisation is the fact that it has reached a stage of maturity and sales boost is possibly through likely operational changes. The facility lay out for a retail store is of immense importance and all the components of the operation of the retail store have to be managed by the organisation. Supply chain involves the entire process of procurement of products to products lifecycle and supply chain planning and asset management.
Reference List
Batt, P.J., 2009. Factors influencing the consumer’s choice of retail store. Curtin Business School, Curtin University of Technology, Australia.
Beneke, J., Hayworth, C., Hobson, R. and Mia, Z., 2012. Examining the effect of retail service quality dimensions on customer satisfaction and loyalty: The case of the supermarket shopper. Acta Commercii, 12(1), pp.27-43.
Humayun, S.H., 2016. Merchandising operation of Woolworths Global Sourcing.
Matthei, P., 2008. Fleet operation. Australasian Freight Logistics, (14), p.22.
Matthei, P., 2008. Green Grocer. Diesel, 8(4), p.30.
Rummler, G.A. and Brache, A.P., 2012. Improving performance: How to manage the white space on the organization chart. John Wiley & Sons.
Russell, R.S. and Taylor-Iii, B.W., 2008. Operations management along the supply chain. John Wiley & Sons.
Shepherd, C. and Günter, H., 2010. Measuring supply chain performance: current research and future directions. In Behavioral Operations in Planning and Scheduling (pp. 105-121). Springer, Berlin, Heidelberg.
Stevenson, W.J. and Hojati, M., 2007. Operations management (Vol. 8). Boston: McGraw-Hill/Irwin.
Tompkins, J.A., White, J.A., Bozer, Y.A. and Tanchoco, J.M.A., 2010. Facilities planning. John Wiley & Sons.
Woolworths (2018) {{metaController.metaData.title}}. [Online] Available at: https://www.woolworths.com.au/ (accessed 10/ 05/ 18)
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