Woolworths Supply Chain Management Essay

Question:

Describe about the Woolworths Supply Chain Management.

Answer:

Introduction:

The company Woolworths is one of the major retail companies that trade in Australia and New Zealand. The Company is also the largest liquor retailer in the country Australia. The Woolworth is the largest supermarket chain in Australia (Fernie and Sparks 2014.). The Company mainly trades in groceries – vegetables, fruits, packaged foods, meat and other food items. Besides these, the company also sells magazines, CDs, DVDs and others. The company also deals in hotels, petroleum and other general merchandise (Arli et al. 2013). There are almost 6000 suppliers and 3200 retail stores of the Company. The Company has an efficient supply chain management to provide items to all these stores. The Company uses “Tradestone’s Merchandise Lifecycle Management” for the management of the supply chain (Dos Santos, Svensson and Padin 2013).

In this assignment, the effectiveness of the supply chain management of the Woolworths Company is being studied. The proposal gives an idea about the data collection method and the methods of analysis of the data. The possible interpretation of the results of analysis is also given in this proposal. This proposal will help to get a deeper look into the matter of supply chain management of Woolworths Company and figure out the ways that had led to the growth of business in the company.

Problem statement:

The main problem statement in this research work is to analyze the supply chain management of the Company Woolworths.

Literature review:

Supply chain management refers to the set of processes by which goods, information or similar other things move from the manufacturer to the supplier to the consumer of the products. An effective supply chain should reduce the use of inventories and co ordinate and integrate these processes (Connelly, Ketchen and Hult 2013). In a supply chain management there are three kinds of flows – product flow, finances flow and flow of information. In the case of Woolworths supply chain management, only the product flow would be considered. The product flow refers to the flow of goods and services from the suppliers to the consumers as well as return of any of such goods and services from the consumer to the suppliers(Flax, Bick, and Abratt 2016).

Woolworths is one of the largest supermarket chains in Australia. The company efficiently manages its supermarket chain all over the country. The main aim of the company is to provide its customers with the fresh foods and vegetables (Juan Ding et al. 2014). The company gets its supply of fresh food, vegetables, meat and other products directly from the Australian suppliers (Devin and Richards 2016). In order to efficiently manage the flow of goods to the stores, the company has established its goods at places all over the country where there is smooth movement of the goods to the stores. The distribution centers are located at different places to allow smooth delivery of the products. The company also has essential transport for logistics.

The current business strategy of the company is “differentiation strategy”. This strategy involves creating a highly differentiated product line for managing effective sales of the products. The company became one of the leading companies in its domain by using this strategy (Eriksson and Svensson 2016). The main strategy of the company is to deliver fresh food to its customers at a much lower costs. The company has faced a lot of challenges as well. The main rival of the company is Coles. Along with Coles, there were two other rival companies – Aldi and Cotsco. These two companies had given more challenges to the company. The company however has gained its place by reintroducing its “fresh food” campaign. The company also owns the largest supermarket share in the country (Singhry 2015).

The Company has extensive buying power and influence with its suppliers. It was supposed that the company is forcing the suppliers to get the product at a much lower price. The company has introduced products in its own label to sell products at a reduce cost. The company also faces competition from Aldi that sells products at a much lower cost. Aldi mostly buys the products from local suppliers. When the products are not available from the local suppliers, they used to get the products from the overseas suppliers. Woolworth used to buy product from both local as well as overseas suppliers (Verghese et al. 2013).

The company has reduced wages of the employee in supply chain to provide the customers with fresh product at a cheaper price. However, the company has soon realized its mistake about the cost cutting measure and has improved its supply chain. The inventories in the stores are being forecasted earlier. It often happens that the stores that are already loaded with goods are receiving more supply of goods. This creates a lot of wastage of materials. The company understood this problem and is looking for a solution to this problem. There are more than seven thousand people in the supply chain. Among them, 20 percent are involved in the moving and delivering of goods to the stores and delivery centers. The remaining is IT personnel or work in other departments (Jie, Parton and Chan 2015).

There are many risks in the supply chain due to the accumulation of raw materials. There is often huge stock of goods available in the stores. Wrong forecasting of demand also makes the goods unavailable. All these hamper the proper sale of goods and cause a lot of wastage of goods. The company Woolworths has chosen “Tradestone’s merchandise lifecycle management” for its supply chain. The company has almost twenty thousand users and six thousand suppliers involved in its supply chain. The team of the supply chain has kept everything running on a smooth 24 hour 7 days basis. “Woolworth primary freight” is the transporting system that provides a smooth transport facility of the goods from the distribution centers. The trade partners have to pay for this transport on a weekly basis (de Groot 2013).

Research questions:

The main research questions in this research work are as follows:

  1. How the Company Woolworth does manage its supply chain?
  2. What are the major problems faced by the company Woolworth in managing the supply chain?
  3. What are the improvements brought about in the company in managing supply chain?
  4. How have this improvement affected the business of the company?

Variables and hypothesis:

The main variables concerned in the research are the sales made by the Company in the current year and previous years. The variables involved in the supply chain are also needed to be considered for this study. The number of employees in the company, the salary of the employees, the number of trucks required in the supply chain is all independent variables for the study. The dependent variable is the sales figures.

The hypothesis for the research work is as follows:

H01: The new strategies in the supply chain have no effect on the sales of Woolworths.

H11: The new strategies in the supply chain have highly increased sales of the Company.

Operational definitions and measurements:

The sales of the company are measured in terms of Australian dollars. The figures obtained are for the whole company. Therefore, an error of 5% in the values is tolerable. The employment status of the company can be measured with the help of number of employees in the company, salary of the employee and others.

Research methodologies:

In this section, the methods of data collection and analysis of such data are being considered. The qualitative as well as quantitative approach has been taken for the collection of data. The data that has been collected is mostly the secondary data. The data about the sales of the products, number of workers in the stores, number of workers in the supply chain has to be collected for the purpose of the research. The data could be collected from the managers of the stores by the method of questionnaire. The managers will be given a questionnaire to fill for the purpose.

Sampling techniques:

The sampling technique used by the researcher is cluster sampling. The company has stores almost located all over the country. The clusters were formed according to geographical region. Each of the states of the country will form a cluster. The data will be collected from a few numbers of selected stores in the region.

Method of analysis:

The data so collected will be analyzed using various descriptive statistics techniques. The median, mean, standard deviation, correlation values can be computed for the variables. A regression analysis of the values can also be performed. The dependent variable is the sales figure and the independent variable is the number of employees, salary of the employees and others. A significant value of the regression coefficient will indicate that the variable has a significant effect on the sales figures.

Research process:

The research process describes the way by which the entire research is being carried out. The first step in the research is to identify the research problem. An extensive literature review is conducted in the next step. The data collection method takes place after that. The next step is the analysis of the data. The conclusions are drawn from the results of the analysis.

Expected outcome:

It is expected that the research will have a positive outcome. The alternative hypothesis of the research should be accepted. This indicates that the new strategies adopted by the company should have an positive impact on the sales of the company.

Conclusions:

The supply chain management of the Woolworth Company would be analyzed in this research work. The effective supply chain can create a positive impact on the sales of the company. The proposal gives an idea about the data collection method and analysis of such data. The possible outcomes of the research are also given in this proposal. This research will help to get a better idea about the supply chain management of the Woolworths Company.

References:

Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business, and Accountancy| Ventura, 16(1), pp.27-46.

Connelly, B.L., Ketchen, D.J. and Hult, G.T.M., 2013. Global supply chain management: toward a theoretically driven research agenda. Global Strategy Journal, 3(3), pp.227-243.

de Groot, N.S.P., 2013. Development of a horticultural fresh produce supply chain in malawi Report on a Scoping Mission (September 2013). LEI, onderdeel van Wageningen UR.

Devin, B. and Richards, C., 2016. Food Waste, Power, and Corporate Social Responsibility in the Australian Food Supply Chain. Journal of Business Ethics, pp.1-12.

Dos Santos, M.A., Svensson, G. and Padin, C., 2013. Indicators of sustainable business practices: Woolworths in South Africa. Supply Chain Management: An International Journal, 18(1), pp.104-108.

Eriksson, D. and Svensson, G., 2016. The process of responsibility, decoupling point, and disengagement of moral and social responsibility in supply chains: Empirical findings and prescriptive thoughts. Journal of Business Ethics, 134(2), pp.281-298.

Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.

Flax, J., Bick, G. and Abratt, R., 2016. The perceptions of supplier-buyer relations and its affect on the corporate brand. Journal of Brand Management, 23(1), pp.22-37.

Jie, F., Parton, K. and Chan, C., 2015. Australian beef supply chain integration: case studies of the two largest Australian supermarkets. International Journal of Supply Chain and Operations Resilience, 1(2), pp.121-138.

Juan Ding, M., Jie, F., A. Parton, K. and J. Matanda, M., 2014. Relationships between quality of information sharing and supply chain food quality in the Australian beef processing industry. The International Journal of Logistics Management, 25(1), pp.85-108.

Singhry, H.B., 2015. An Extended Model of Sustainable Development from Sustainable Sourcing to Sustainable Reverse Logistics: A Supply Chain Perspective. International Journal of Supply Chain Management, 4(4).

Verghese, K., Lewis, H., Lockrey, S. and Williams, H., 2013. Final report: The role of packaging in minimising food waste in the supply chain of the future. Prepared for CHEP Australia. Melbourne, Australia: RMIT Univ. and Centre for Design, (3.0).

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