Supply Chain Company Woolworths Limited - Example

SUРРLY СHАIN СОMРАNY WООLWОRTHS LIMITЕD University Student Id Course Date Executive summary This report is analysing the supply chain of Woolworths Limited. The main category of the supply chain analysis is the grocery line of products. The report is divided into different parts that include supply issues, operations issues, information issues, integration issues and sustainability issues. The analysis entails assessing the supply chain operations of the company. The improvement programs that can be used in the process of improving the supply chain of the company are explored. Lastly, how the improvements can help the company in achieving its mission, vision and strategic goals has been analysed. Table of Contents Executive summary 2 Introduction 3 Vision, mission and strategic goals of Woolworths 3 Part A: Supply issues 4 Section 1: Key product categories 4 Section 2: supply market 4 Section 3: supply market and importance of sourcing 4 Section 4: supplier selection, evaluation and development practices. 4 Section 5: Key supply related opportunities and challenges 5 Part B: Operations issues 5 Section 1: Sales market and the key customers 5 Section 2: Demand forecasting techniques 5 Section 3: Inventory management techniques 5 Section 4: Demand and inventory management challenges 6 Part C: Information issues 6 Section 1: bullwhip effect 6 Section 2: Key information technology tools 6 Section 3: Collaborative Practices 7 Part D: Integration issues 7 Section 1: Comprehensive map of Woolworths’ supply chain 7 Section 2: 9-step framework 7 Section 3: Triple-A supply chain 8 Part E: Sustainability issues 9 Section 1: Key procurement and supply chain sustainability practices 9 Section 2: Sustainability implementation and integration 10 Woolworths Limited's procurement and supply chain analysis 10 The improvement programs 12 How improvement programs can help in achieving mission, vision and strategic goals 13 Conclusion 13 References 15 Introduction Woolworths is Australian grocery store that has specialized in selling groceries that include meat, packed foods, fruits, and vegetables among others. It is the largest Australian retailer that was founded in the year 1924 and currently has more than 3500 stores. It provides special and commercial functions in different parts of the globe (Seuring and Müller, 2008). The company has established effective distribution and logistics systems aimed at delivering fresh food products to the customers on time. Vision, mission and strategic goals of Woolworths The mission of Woolworths is to deliver high-quality products to customers in convenience and value. Its vision is, to be honest, open, transparent and fair in its operations to ensure it is competitive in the market. The company has been working towards achieving its mission and vision through establishing strategic goals. The company strategic goals can include establishing business partners who are trusted across the world (Fawcett, Ellram and Ogden, 2014). The strategic goals of Woolworths have helped the company in making sure that there is established a partnership with the local manufacturers and farmers. This has made the company develop supply and distribution systems that can ensure high-quality services to the customers targeted. Part A: Supply issues Section 1: Key product categories The key product category is groceries. The company has been offering groceries like packed meat, packed foods, fruits and vegetables that are offered very fresh to make the company different from the competitors. Section 2: supply market The supply market for the company include the middle-income customers. Its target is mainly to the customers who are many in one geographical location aiming at increasing the market share. The geographical dispersion of the suppliers is low as Woolworths ensures that the supplies are fresh. The key product category supplied is groceries. Section 3: supply market and importance of sourcing Sourcing has helped the company in achieving efficiency and guarantee continuous production process. It is through sourcing of items and services that Woolworths has been in a better position to manage its costs. The supply market makes sourcing important for ensuring sustainability and efficiency in the supply chain of the company (Kraljic, 1983). Section 4: supplier selection, evaluation and development practices. Woolworths considers efficiency, quality and reliability aspects in selecting the suppliers. The management evaluates various suppliers to select the best suppliers who can ensure improvements in quality and ability to meet the needs of the customers (Melo, et al., 2009). Some of the development practices and programs include engaging the suppliers to make them committed to ensure quality. Section 5: Key supply related opportunities and challenges Woolworths has been facing some challenges like changes in the prices of supplies that has led to increase costs of production (Woolworths Limited, 2015). The opportunities include technological advancement have led to efficiency in operations. Part B: Operations issues Section 1: Sales market and the key customers The sales market is mainly in the lifestyle segments where the company sells its products to the customers while considering their mindset. The key customers of Woolworths include both middle and high-income customers with low geographical dispersion (Mitchell, 2014). This is important to the company as it helps in meeting needs of the customers by making products affordable. Section 2: Demand forecasting techniques Woolworths uses historical sales data in the process of forecasting demand. The company uses the sales volume in the past to establish the trend in the change of the sales. The use of historical sales data helps the company in evaluating the company performance in the market. Woolworths uses varying demand forecasting techniques for the different products (Stadtler, 2015). This is because the demand of the products is affected by diverse factors. Section 3: Inventory management techniques The common inventory management techniques used in Woolworths include constant stock auditing and stock taking. Auditing stocks help in confirming the stock records available in an organization. The stock taking helps in ensuring that the stock is tracked to avoid over or under stocking. Woolworths Company uses different inventory management techniques for different products (Woolworths Limited, 2016). This is because the nature of products is different. Section 4: Demand and inventory management challenges Financial constraints are among the major challenges facing Woolworths in managing its demand and inventory (Google, 2017). The inventory management and demand forecasting techniques are expenses hence increasing the costs of operating. Part C: Information issues Section 1: bullwhip effect The instance of bullwhip effect occurred in the company interrupting the supply chain operations. It was caused by lack of proper communication making the managers perceive the product differently hence ordering different quantities. The remedy is improving the communication. The capabilities of the company were affected because of the disruption of the company activities (Pagell, Wu, and Wasserman, 2010). Bullwhip can be dangerous as groceries are usually needed fresh in the company. Section 2: Key information technology tools The key information tools that have impacted the supply chain of Woolworths include inventory management systems. The systems have played a major role in improving management of supplies in Woolworths. The capabilities of the supply chain of the company are improved by incorporating technology in the management of the inventory. Through the system, the company can be in a position to ensure that the right levels of inventory are kept in the company. The inventory control systems have helped the company in ensuring high-quality products are delivered to the customers (Pagell and Wu, 2009). Also, the supplies are properly managed by ensuring that the right level of inventories is maintained in the company. Section 3: Collaborative Practices The collaborative practice that Woolworths’ supply chain uses is the engagement of the customers and suppliers. The company ensures that the customers and suppliers are engaged to make sure that the products delivered are of high quality and able to meet the market demand. The challenges facing the implementation include the time taken (Srivastava, 2007). The opportunities include increasing product demand. Its impact on the company is that it ensure that the products are relevant in the market. Part D: Integration issues Section 1: Comprehensive map of Woolworths’ supply chain Section 2: 9-step framework Step 1: developing front end agreement. This step entails coming up with the necessary terms of an agreement aimed at ensuring successful integration (Carter and Rogers, 2008). Step 2: creating a joint business plan. It is through creating a joint business plan that the company can be in a position to have the appropriate goals of the integration process (Srivastava, 2007). Step 3: creating sales forecast. The sales that need to be achieved through the integration need to be forecasted to make sure that the integration has the necessary strategies in place to achieve the set objectives (Stadtler, 2015). Step 4: identifying the exceptions especially for the sales forecast. The exceptions are usually based on factors affecting sales (Melo, et al., 2009). Step 5: resolving on the exception items. The company has been resolving the issues surrounding the exception (Gil, et al., 2010). Step 6: creating order forecast. Woolworths has been doing order forecasting to make sure that the necessary strategies are put in place to achieve targets set (Kraljic, 1983). Step 7: identifying exceptions for the order forecasting. Woolworth evaluates the situations surrounding the exceptions of the orders forecasted (Pagell, Wu, and Wasserman, 2010). Step 8: resolving on the exception items. Woolworths Company makes sure that the issues in the integration that lead to the exceptions of items are resolved (Srivastava, 2007). Step 9: order generation. After integrating the supply chain then the company can be in a position to make the necessary orders (Seuring and Müller, 2008). Considering the 9-step framework for designing and assessing the supply chain integration, Woolworths is highly integrated (Pagell and Wu, 2009). Section 3: Triple-A supply chain Part E: Sustainability issues Section 1: Key procurement and supply chain sustainability practices The sustainability practices of Woolworths in its supply chain include ensuring minimum impacts on the environment. For instance, the company encourages the suppliers to ensure that they work towards ensuring that they are sustainable in their operations. The suppliers are regularly assessed to make sure that their sustainability is evaluated. Woolworths has been working towards ensuring that the company is efficient in the use of natural resources (Pagell and Wu, 2009). It has ensured that it uses resources in a way that is sustainable by being efficient in the utilization of the resources. Besides, the company has ensured that the suppliers are committed to ensure that they use resources efficiently. This has been possible through making sure that the suppliers are made aware of the benefits of ensuring sustainability in the use of the natural resources. Section 2: Sustainability implementation and integration The management of the company has ensured successful implementation through ensuring that the key stakeholders are engaged in the implementation process. The internal stakeholders such as employees are made aware of the need to make sure that the sustainability strategies are successfully implemented. The company has ensured that the employees are in a position to support the implementation process through ensuring proper communication. The external stakeholders like the suppliers are engaged in the formulated and implementation of the sustainability strategies to make them work towards ensuring that the sustainable strategies are achieved (Seuring and Muller, 2008). Woolworths Limited's procurement and supply chain analysis Woolworths Limited has been committed to achieve efficiency in its supply and chain management. For instance, the company has set standards that have to be followed by the suppliers to ensure high-quality supplies to the customers. In the process of ensuring that the company is sustainable, the management encourages suppliers to be ethical in their operations. The production in Woolworth creates commodities that can satisfy the customers. Distribution has also aided in availing the commodities to the consumers. Most of the products Woolworth produces are agricultural products. After commodities are produced, they are availed to consumers using a chain of distribution. This distribution chain is either direct from producer to consumer or from producer to wholesale or to the retailer or marketing groups and finally to consumer (Carter and Rogers, 2008). Apparently Woolworths Limited has avoided wholesale markets by supplying the produce via direct contracts. However, it has come across challenges since the cost of carrying out business has gone high. This is caused by offering storage, packing, agreeing with quality assurance standards, stock management and transport of produced products. In an attempt to reduce the cost of production Woolworths Limited has come up with a strategy lengthening supply chains of agricultural produce. This strategy has relative effects on the prices of products. To reach new markets and keeping the prevailing ones Woolworth Limited is considering opening up stores nationwide. Sales, in this case, is boosted by the closure of underperforming stores, rebuilding them or setting up new ones. Again working hours are being increased in some places to accommodate busy working regions. Stores are strategically located to enhance the accessibility of the products being supplied. Agricultural Products in Woolworth are given the priority to reach consumers using the fastest supply chain. Different types of goods affect supply chain differently. Woolworth limited agricultural Foods supply chains are moving first because consumers see them as the local ones and relative regarding affordability. Their supply chains have bypassed long chains of distribution to reach consumer hence maximizing profit. The Products that they are producing are highly affecting the lengthiness and shortness of a supply chain. Highly perishable products need to be subjected to the shortest supply chain possible to consumers depending on their perishability (Gil, et al., 2010). It has made the levels of the supply chain that are making agricultural products stay long before reaching consumers be overlooked. In stores, healthy foods are made visible and available to make purchase simpler and encourage them to be available in homes as a result of increased consumptions in a few populations. Purchasing patterns of agricultural products of Woolworth Company are as a result of advertising and promotion that affect the demand for the products. In an attempt to increase purchases of products price competition brought by competitors are playing a significant role as far as discounting is concerned. In price, promotion timed discounts; volume discounts are employed to increase both sales and purchases (Kraljic, 1983). Externally the company has to done advertisements on the mass media, gave catalogs and done shop docketing. Internally good placement of products, well-designed layout and music are put in place to encourage higher purchases Offers, and rewards to consumers are highly influencing sales of products. The improvement programs Differentiating the supply chain strategies Woolworths Limited can differentiate its supply chain strategies as a way of improving the supply chain. Differentiating the supply chains helps the business understand the type of consumer its dealing with hence meeting their needs. Again in the supply chain, there is valuable information that is passed from the intermediaries involved to consumers and from consumers to producers through the intermediaries (Van Weele, 2009). This information helps one to find ways to provide innovative products which meet the needs of the consumer and have total cost control. Corporate strategies are tactics aimed at making supply chains efficient and leadership in costs of products. Market research Researching Market data analysis aids an organization to handle supply chains by appointing a manager to be responsible for the improvement of delivery and performance from end to end. A supply-chain organization has to put together operational excellence and functional decision making and data-driven aspects together. Ensure information and technology are incorporated to help in decision making and identify opportunities and risks in non-structured data. Setting performance standards An organization performance standards to supply chains are meant to deliver value and protect against risks of operations. The standards of performance are affected by the products, the market and the purposes of the business. These highly impacts on production cost, stabilizing the supply of critical products, ability to be resilient to changes in demands and launch of new products (Van Weele, 2009). Performance standards have to be set in line with the supply chain to achieve the core goal of an organization. How improvement programs can help in achieving mission, vision and strategic goals The improvement program can be important in achieving the mission, vision and strategic goals of Woolworths Limited. For instance, through the improvement programs, the company can be able to meet the needs of the customers through offering high-quality products. It is the mission and vision of the company to meet the needs of the customers. Also, improving quality can help Woolworths Limited in meeting the strategic goals set the company has been aiming at making sure that it offers high-quality products to the customers. Besides, the improvement program can help in achieving efficiency and sustainability. Woolworths Limited in its mission and vision has been looking for ways of making sure that sustainability and efficiency in the supply chain management are achieved (Srivastava, 2007). The sustainability strategies can achieve through the implementation of the improvement programs. Conclusion The supply chain of Woolworths Limited has played a major role in its success in the market. For instance, the healthy agricultural foods supplied from the Company are highly considered by consumers hence increasing purchases. Food choice clarity on a diet is being encouraged in different populations and localities. Available farm outputs and fast moving products are availed to consumers using the cheapest supply means possible. The supply chain of products produced by the company is made relative for consumers’ affordance. References Carter, C.R. and Rogers, D.S., 2008. A framework of sustainable supply chain management: moving toward new theory. International journal of physical distribution & logistics management, 38(5), pp.360-387. Fawcett, S.E., Ellram, L.M. and Ogden, J.A., 2014. Supply chain management: from vision to implementation. London: Pearson. Gil, R., Gangopadhyay, D., Zhou, J., Gordon, S. and Nayak, S., Click Acqusitions, Inc., 2010. Supply chain management. U.S. Patent 7,761,319. Google, 2017. Sites help. [online] Available at: [Accessed 21 March 2017]. 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