Comprehensive Report On Woolworths’ Supply Chain And Logistics Operations

History of Woolworths

Management of Logistics is the essential portions of the supply chain management because it plans, executes, and copes up with the storage and movement of goods to satisfy the necessity of the customer. Logistics management is a vital element for the success of the business operations and possess direct effect on its bottom line (Azmi, Hamid and Hussin, 2017). The intent of this report is to define, analyze, and assess the supply chain and the related logistics operations of the Woolworths Company. The report will cover the brief history of the company and analyze its market as well as the scope of its operations. Besides this, it will describe the features of the logistical and supply chain operational activity of Woolworths. The report will specify three key activities that the company is using in order to confirm the sustainability of the supply chain and the ways organization is using to influence every supply chain element to implement sustainable practices. Moreover, it will discuss the ways through which company collaborate with its logistics partners and suppliers to ensure customer satisfaction with its services or products.

Woolworths Group has one of the largest chains of supermarket in the Australian market, which is managed by Woolworths Limited. The company was introduced in 1924 with the first store opening in Imperial Arcade of Sydney. The initial advertisement of the company claimed that every single city requires one store of Woolworths, therefore it opened its stores at the nearby places where customers can get products at affordable prices. Ernest Robert Williams, Stanley Edward Chatterton, Cecil Scott Waine, George William Percival Creed, and Harold Percival Christmas are all the one who established Woolworths (Woolworths Group, 2018b).   

Australian retail industry is the most developed markets with over 140000 businesses functioning in this zone. However, the retailing industry comprises only some of the key players aiming to the typical features of oligopoly. Woolworths Limited is one of those key businesses functioning in the sector of retailing and because of oligopoly, it enjoy superior returns in comparison to the small businesses offering similar type of products and services. Considering the retail market, Woolworths possess 31% market share and regarded as the key contributor in the economy of Australia producing around 4.1% of the country’s GDP (Bhasin, 2018). There is a long history behind Woolworths, as it started its very first store in 1924. Woolworths inclines to be the major retailer in the market of New Zealand and Australia and have an existence in the United Kingdom. The company runs around 156 supermarkets in New Zealand and 872 in Australia (Woolworths Group, 2018c).

Market Analysis and Scope of Woolworths

Woolworths has adopted a direct supply chain as its support in reducing the cost and help in controlling the supply chain procedure. Woolworths connect with its vendor and stores with the help of a distribution center. Besides this, Woolworths is managing Direct Store Delivery (DSD). Direct Store Delivery permit vendor to transport products directly from the warehouse of the vendor to the stores of Woolworths (Wahyuni, 2010). The supply chain system of Woolworths through the center of distribution and Direct Store Delivery has been shown below in the diagram (Refer to Appendix).

Woolworths has eliminated and merged its center of distribution from 31 to 9 RDC i.e. regional distribution center and handle 2 NDC i.e. national distribution center (Wahyuni, 2010). It is the project refresh strategy of Woolworths, in order to reshape its organization to become efficient and effective because the extra number of distribution centers can result in excess capacity that can ultimately increase cost of the company.

System of Transport Management 

Woolworths is majorly operating its own services of logistics in order to manage services of primary transport in order to transport stocks from dealer to nearby RDC/NDC and services of secondary transport in order to transport stocks to stores from RDC (Woolworths, 2018).

In order to back the redesigned system of the supply chain, Woolworths has installed integrated Information Technology system that is grounded on the EDI model i.e. Electronic Data Interchange (Wahyuni, 2010).

The largest retailer of Australia that is Woolworths Supermarkets, understand that a well-organized operation of the supply chain is vital to delivering fresh food daily to the millions of consumers all over Australia. In order to ensure the well-organized process of its supply chain, the company has organized its own platform of B2B integration to offer real-time incorporation with its system of suppliers. The platform influences that AS2 protocol for B2B communications, which is a requirement for mechanical order contentment in the business making use of the Internet (SPS Commerce, 2018).

Woolworths has installed Metric Stream’s Sustainability Performance Management Solution in order to cover and evaluate the sustainability indicators and metrics around water, waste, soil and energy management. This solution will support Woolworths in nursing supplier agreement with sustainability rules and enhance the sustainability initiatives and projects performance of the company. Metric Stream’s solution offers an integrated outline for Woolworths to record, on-board dealers for their program of sustainability management, evaluate supplier agreement by periodic self-assessments and audits by third-party support in holding the data of the supplier, and manage certifications of the supplier. Presently, Woolworths is making use of Metric Stream’s Quality Audit Management solution in order to enhance its program of TQM that is Total Quality Management (Newswire Association, 2014).

Characteristics of Woolworths supply chain and logistical operational activity

Presently, businesses have understood that the concern of CSR and sustainability have stimulated higher within the value chain. Therefore, Woolworths is placing extra pressure on its suppliers to enhance their procedures of business and generate more value for the consumers (Mitchell, 2017).

Woolworths is also influenced its suppliers to implement advanced technologies and put efforts in decreasing the product development cost. By doing this, the company is inspiring its suppliers to be more sustainable and reduce their environmental effect at the time of designing and delivery of the product (Woolworths Group, 2018d). Due to this, the company understands that the way to inspire suppliers effectively is to maintain better relationships with the stakeholders.

Woolworths is very much focused towards encouraging its suppliers to adopt sustainable practices in the organization (Woolworths Group, 2018a). In order to do so, the company is adopting a four-step procedure in which the first step is mapping supply chain. This helps the company to follow a systematical procedure in its supply chain and avoid hurdles as well as conflicts.

Concentrating on the sustainability in the supply chain is an excellent way to communicate corporate culture and values to the key suppliers and consumers (Wollmuth and Ivanova, 2014). Woolworths has established and communicated its expectations with the help of supplier code of conduct to its suppliers to involve them towards attaining sustainability within the organization.

Woolworths have started measuring the supplier’s performance with the help of surveys and questionnaire. This support business in providing feedback to the suppliers regarding their performance and enhance it.

After understanding the baseline, the performance of the suppliers’ company put its efforts towards improving the performance of its suppliers (Wollmuth and Ivanova, 2014). This is done by conducting training programs for the suppliers.

In order to satisfy the customers through services and products Woolworths is offering its suppliers a new range of access to the information on the shopping habits of the customer with an online portal named as “Supplier Connect.” As per a newspaper in Australia, Supplier Connect is one of the online portals that offer a broad variety of data regarding the shopping habits of the customers. According to the analysis, this strategy supports manufacturers of the food to understand and satisfy the customers (Australia Food News, 2017). This will also support the company in attracting more and more customers towards the supermarket and will result in increasing the revenue of the business.  

Conclusion

The above report has provided a brief history of Woolworths, according to which it is one of the biggest supermarkets of the Australian retail industry. The company runs around 156 supermarkets in New Zealand and 872 in Australia. From the above analysis, it has been identified that company makes use of different activities to ensure sustainable supply chain some of the activities are Sustainable Performance Management Solution, Enhancing procedures of Suppliers, and Reduce Environmental Impact. Besides this, the report has discussed the characteristics of the Woolworths supply chain and logistic operational activities. Besides this, in order to satisfy its customers’ company has allowed access to the customer shopping habits information to the suppliers in the market.

References

Australia Food News (2017) Woolworths gives suppliers unprecedented access to consumer data [online]. Available from https://www.ausfoodnews.com.au/2017/01/09/woolworths-gives-suppliers-unprecedented-access-to-consumer-data.html [accessed 28 December 2018]

Azmi, I., Hamid, N.A., and Hussin, M.N. (2017) Logistics and supply chain management: The importance of integration for business processes. Journal of Emerging Economies & Islamic Research, 5(4), 73-80.

Bhasin, H. (2018) SWOT analysis of Woolworths [online]. Available from https://www.marketing91.com/swot-analysis-of-woolworths/ [accessed 28 December 2018]

Mitchell, S. (2017) Woolworths connects with suppliers to win back customers [online]. Available from https://www.afr.com/business/retail/woolworths-connects-with-suppliers-to-win-back-customers-20170307-gusemv [accessed 28 December 2018]              

Newswire Association (2014) Woolworths Enhances Supply Chain Sustainability and Performance with MetricStream [online]. Available from https://www.prnewswire.com/news-releases/woolworths-enhances-supply-chain-sustainability-and-performance-with-metricstream-248355881.html [accessed 28 December 2018]

SPS Commerce (2018) SPS supports suppliers in the adoption of e-business standards and technology [online]. Available from https://www.spscommerce.com/resources/woolworths/ [accessed 28 December 2018]

Wahyuni, D. (2010) The Importance of Supply Chain Management in Competitive Business: A Case Study on Woolworths [online]. Available from https://www.researchgate.net/publication/228215291_The_Importance_of_Supply_Chain_Management_in_Competitive_Business_A_Case_Study_on_Woolworths [accessed 28 December 2018]

Wollmuth, J., and Ivanova, V. (2014) 6 steps for a more sustainable supply chain [online]. Available from https://www.greenbiz.com/blog/2014/01/24/6-steps-more-sustainable-supply-chain [accessed 28 December 2018]

Woolworths (2018) Supply Chain [online]. Available from https://www.woolworths.co.za/recipe/_/A-cmp100601 [accessed 28 December 2018]

Woolworths Group (2018a) Strategy and objectives [online]. Available from https://www.woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-objectives [accessed 28 December 2018]

Woolworths Group (2018b) The Woolworths Story [online]. Available from https://www.woolworthsgroup.com.au/page/about-us/The_Woolworths_Story/How_We_Were_Founded [accessed 28 December 2018]

Woolworths Group (2018c) Woolworths Supermarkets [online]. Available from https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/Woolworths [accessed 28 December 2018]

Woolworths Group (2018d) Sustainability [online]. Available from https://www.woolworthsgroup.com.au/page/community-and-responsibility/group-responsibility [accessed 28 December 2018]