Woolworth’s Supply Chain and Procurement Department
Woolworths is the Australian largest supermarket operator with is operating with 995 stores. The company generates of major of their income from the Supermarkets along with Grocery stores within the Australian industry. In the year 2017, the company generates of total revenue of around $55,920,800,000 consisting of sales along with revenue (Woolworthsgroup.com.au 2016). The selected product of this report is health and beauty products.
The vision statement of Woolworths is “To be one of the world’s most responsible retailers”. The mission statement of Woolworths is “To deliver the best in convenience, value and quality for our customers”. The strategic goal of the company is to improve their stock turns in addition to optimize of network competence while making sure that the customers served by more than 995 stores.
The procurement department manages the supply issues in health and beauty products of Woolworths. Woolworths supply chain is operated distribution centers, primary freight and packaging along with barcode needs to ensure smooth service among the trade partners and stores (Christopher 2016). The company places the customers at start of everything they do, and this strategy results into lower price, higher innovation in addition to compelling offers. The importance of sourcing items are development of new health and beauty product categories, improvement of supply chain, processing facilities and development of strategic sourcing relationships with the primary industry partners. Woolworths are worked closely with various trade partners to provide quality services to their customers (Jacobs, Chase and Lummus 2014). The company knows that effective supply chain operations can deliver of quality products on daily basis to millions of customers. Woolworths is chosen of SPS commerce as current strategic partners with the supplier community. The retail industry chooses of SPS after extensive evaluation as well as certification processes (Stadtler 2015).
The supply related challenges of Woolworths are safety of products, damage and spoilage, change into products, speed to market and cost management. There are also threatening of logistics networks, transportation cost and warehousing, critical handling of products to point of sale and improper flow of goods among the distribution network. From the supplier development programme, the company has met with strict product requirements and made their company’s customer base (Hugos 2018). The suppliers receive of guaranteed trade from Woolworths.
The sales market and key customers of Woolworths is lower and middle class people. The company sells of their products and one of its geographical dispersion retailers within Africa. Woolworth’s is used of survey of buyer’s intention as one of the demand forecasting technique to know and estimate the demands of their customers. It is a method to estimate demand of the customers such that they are intended to buy the forthcoming time. The other method Woolworths used for their sales market are sales force competitive method as sales (Brandenburg et al. 2014)man are closet person to the customers those can judge the mind and market. They can understand reactions of customers towards health and safety products as well as sales trends. Based on estimation of salesperson, the estimation of sales is being predicted.
Sales Market and Key Customers
Just-in-time: The products are ordered when there is requirement to ship and manufacture. The items are ordered back based on delivery time ensured by the supplier.
Accurate response: It helps the company to manage its inventory based on future demand predictions (Lawley, Birch and Craig 2016).
Different techniques are used for different products as based on category of products, their selling and buying, the inventory management techniques are selected.
The demand and inventory management challenges of Woolworths are:
- Globalization and faces competition from company across Australia (Fernie and Sparks 2014).
- Ineffective communication among the organizational management and staffs
- Poor quality of goods and services in demanded quantities with acceptable time frames
Woolworths desires to gain control over Bullwhip effect by looking at its supply chain structure and its processes. The causes of bullwhip effect are:
Behavioural causes: When the demand of customers increases, demand of upstream members is increase to meet with an increase of customers demand (Singh, Shukla and Mishra 2017). Demand of upstream members is increase for replenishing of inventory.
Operational causes: It is caused due to demand forecast updating which is result of perception of the decision makers into the supply chain (Govindan et al. 2017).
Remedies of bullwhip effect are:
There is requirement of strong collaboration with the supply chain members. It reduces amplification of orders into the upstream directions. The company should use of Electronic data interchange to transfer of data among various computer systems which reduce paper work to generate of customer’s order (Flint, Lusch and Vargo 2014).
Following are the information technology tools used into supply chain of Woolworths and its key impacts:
Digitalized tracking: It helps to reduce the shipping errors and track the customer’s order which enhance the customer experiences with tracking the status of orders (Coyle et al. 2016).
Radio frequency identification (RFID): RFID chips are placed on each product to track the inventory. It improves supply chain processes by detecting order anomalies (de Sousa Jabbour et al. 2015).
Collaborative practices uses across supply chain of company are:
Implementation of B2B platform: This collaborative platform allows supplier and customer to share of information and exchange of documents and contracts. The supplier also receives of delivery instructions in form of email (Ayers and Odegaard 2017).
Leverage collaboration: The Company can leverage of collaboration outside of its business operations to create of competitive advantage (Monczka et al. 2015). It is done to share of system, data along with facilitate of external partnerships.
B2B practice helps to enter into supply chain network, allow the suppliers to forecast, produce and deliver the products as per customer’s requirements.
The 9-step framework for design and assessment of the supply chain integration are as elimination of the waste into the supply chain to create customer value, advancement of the technology to improve supply chain, making customer usage visible to supply chain members (Siqueira, Webb and Bruton 2016). It also consists of reduction to lead time to get closer to customer’s demands, creation of level flow to reduce reliable into increase of flexibility and forecasting along with reduction of waste into over production, use of pull system to reduce complexity in supply chain planning along with overproduction, increasing velocity (Kozlowski, Searcy and Bardecki 2015). There is throughout and reduction of variation, collaboration with the supply chain members and focusing on total cost of fulfillment.
Inventory Management Techniques
The triple A’s supply chains of the company are agility that Woolworths is required to contain various sets of data across the different levels as well a product hierarchies (Chkanikova and Lehner 2015). Adaptability is bout long term perspectives of company to respond to the market changes. Establishment of strategic partnership with the stakeholders into the supply chain re required being concerned to turn company into adaptive. Alignment is collaboration with the suppliers as well as customers in supply chain is required (Jones, Hillier and Comfort 2016). These three factors help Woolworths to achieve a good customer base in addition to better brand reputation and value in the Australian marketplace. The company can also gain competitive advantage in the market by providing better organic, health and beauty products to the customers as compared to its competitors.
The key procurement and sustainability practices which are used by the company are that it is required to map the supply chain to have comprehensive understanding of sustainability impacts into the supply chain. Woolworths is focused on sustainability of supply chain to communicate with the corporate values as well as culture of suppliers as well as customers. Establishment and communication the expectations with the supplier code of conduct are involved the suppliers into sustainability efforts (Lueg, Pedersen and Clemmensen 2015). Development of training as well as capacity building programs is improved sustainability and drive of behavioral changes throughout the supply chain. Collaboration with the supply chain department is required to interact with the stakeholders about any complex supply chain challenges.
As per the trigger model, the customers are important are those who appreciate the services as well as products provided, justified existence of supply chain. In order to tackle triggers of the companies, it is base on two supply chain strategies. Firstly, there is supplier evaluation of the risks as well as performance is dependent on the key managerial decisions (Jones, Hillier and Comfort 2016). The mangers are conducted to list the supplier company at various tiers based on sustainable supply chain. Second strategy is based on generation of supply chain management for the sustainable products that is focused on production of kinds of products that aim to improve environmental as well as social quality. The main aim is to satisfy the customers and gain of competitive advantage into the market.
In this paper, Woolworths performs procurement and supply chain analysis to increase the financial performance as well as maintain of competitive advantage. The company adopts of supply chain since it minimizes the cost as well as maintains own control over the supply chain. The company connects its vendors along with stores with the distribution centre (Kozlowski, Searcy and Bardecki 2015). Woolworths adopts of dynamic supply chain alignment for design thinking into the enterprise supply chain, transformation, innovation into supply chain, alignment, new business models for the enterprise supply chain, decision support and operating environment. As per dynamic alignment model, it is required to segment the target market, supply structures and design of proper supply chain as per company’s objectives and goals (Singh, Shukla and Mishra 2017). The company is growing as super market store within Australia, which have larger number of suppliers those have supply of different health as well as beauty products. Woolworths face of various challenges into their supply chain management such as bulk order delivery of the products at receiving dock, lack of storage space of the products (Jacobs, Chase and Lummus 2014). There is inappropriate tracking system to receive and order the goods; therefore the company is suffering from Bullwhip effects which lead to insufficient delivery of goods as well as services by means of suppliers.
Demand and Inventory Management Challenges
The operating distribution centers as well as trucks into the supply chain puts Woolworths into better position which ensure of optimum distribution efficiency as well as product quality (Lawley, Birch and Craig 2016). The company is adopted of integrated competitive strategy to use of combination of cost leadership in addition to differential elements to compete with competent supply chain to reduce the cost along with brand image to distinguish the products based on quality (Flint, Lusch and Vargo 2014). Woolworths provides of quality as well as safety services to the health along with beauty product which help the customers to increase its sales at global level and optimize the production and supply chain globally. Handling of products to point of sale is critical as it requires of reliable transportation as well as storage. The beauty customers want hot products. Supply chain plays a key role to drive of customer satisfaction in addition to competitive advantage (Monczka et al. 2015). Management of the cosmetics is needed of expertise in various areas. In order to compete in the market of Australia, beauty supply chain manager along with third party logistics providers are handling of higher volumes of products and ensure of on-time delivery at competitive costs.
Woolworths performs of suppler excellence program as its development program into the supply chain. The personal care market of Woolworths has rapid progress into the Australian market due to grow into demands of customers for the organic beauty products including of cosmetics. The health and beauty products are at battle among supply as well as demand (Kozlowski, Searcy and Bardecki 2015). Once they generate of demand, they ensure that the products are on stocks and available for the purchase. Handling of the products is point of scale and it is require of reliable transportation, distribution as well as storage. Therefore, the company is used to manage its supply chain by managing the suppliers as well as orders of products.
Changes into the supply chain occurs quickly, therefore Woolworths require of improvement programs to make possible changes in their supply chain management to gain a competitive advantage in the market (Lueg, Pedersen and Clemmensen 2015). The supply chain strategies are educated, benchmark, and collaboration. All the procurement department links of supply chain to better understand their supply chain. The organization is also required understanding the performance as compared to its competitors and other retail industry. Collaboration is also required to interact with the supply chain members such that they can understand their supply chain operations (Jones, Hillier and Comfort 2016). The goal of improvement program in supply chain consists of:
- Reduction of the procurement overhead
- Reduction of the inventory
- Savings of the cost into goods as well as services
- Improvement into the satisfaction level of customers
IT tools used in Woolworths’ Supply Chain
Continuous education among the employees as well as management is vital improvement of company’s products in addition to services. A performance driven culture results into maximization of savings, improvement over the service levels as well as inspired the team of employees. A training program formulates of comprehensive plan to raise productivity, reduce the cost as well as improve over the customer services (Fernie and Sparks 2014). Constructive training drives the organization along with productivity of supply chain improvement. Increment over the supply chain is being achieved rise and fall into leadership. Therefore, the company seeks to increase supply chain productivity to seek guidance into logistics professionals.
The improvement program assists Woolworths to achieve of vision, mission along with strategic goals. It develops and implements the organization’s productivity. The staffs are engaged to generate input and help to build commitment to end of the improvement plan (Brandenburg et al. 2014). It is required to involve the employees in planning of strategy along with direction for the organization. The improvement program includes of strategies for development of new product and deliver of new services along with restructure of procurement department. The organization also develops strategy for innovation that consists of reshape organizational culture to become innovative as well as implement of process to manage the supply chain innovation (Ayers and Odegaard 2017). A good organizational culture provides values, beliefs as well as behaviors of the employees. The culture of Woolworths is unique as well as diverse to individual’s personality.
Engagement of the employee’s level is ensured of success. Communicate with the employees is also required to achieve of mission, vision and strategic goals of Woolworths. The vision of the company is to become responsible retailers in the world. Mission is to deliver of best into convenience, value as well as quality of the customers (Chkanikova and Lehner 2015). The goal of Woolworths is to make improvement over their stock turns so that they can optimize the network competence so that the customers can serve better. The supply chain improvement programs help the company to achieve its mission and vision.
Conclusion
It is concluded that Woolworths desires to achieve a better supply chain management so that the company can gain of competitive advantage. The inventory is such a location where the business can maintain stocks of the products such that it ensures for smooth delivery of the products on order. The company also improves its current supply chain operations to meet with its strategic goals. The market of personal care and beauty products is increasing due to grow into customer’s demands of the organic products. Proper delivery and transportation mode is selected to deliver the products on time and meet with customer’s business value.
Collaborative Practices across Woolworths Supply Chain
References
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