Logistics and Supply Chain Management at Woolworths

This report provides an overview of the logistics and supply chain management at Woolworths, one of the largest supermarket chains in Australia. It discusses the characteristics of Woolworths' supply chain and logistical operational activity, as well as the company's efforts to ensure a sustainable supply chain. The report also explores the history, market analysis, and scope of Woolworths, and how the company collaborates with suppliers and logistics partners to ensure customer satisfaction.

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Woolworths
Logistics and Supply Chain Management
12/28/2018

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 1
Executive Summary
Logistics is an activity, however, has now grown in the world of business, logistics in relation
to the organization is the transfer of goods from one point to another point. Logistics is
involved in a broad variety of essential activities for the transfer of products, services, and
related information. In addition, Supply chain is the organization of activities and procedures
of the business related to the supply chain network. The supply chain network is comprised of
numerous firms of diverse types, sizes, and forms of goods that are produced and distributed.
These networks perform a significant function that is to convert raw material into finished
goods and to distribute finished good to the customer with the help of effective and efficient
SCM. The aim of this report is to enhance the understanding regarding supply chain and
logistics in Woolworths Company. In order to do so, the report has elaborated different
characteristics of the company's logistics and supply chain operational activity.

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
History of Woolworths...........................................................................................................3
Market Analysis and Scope of Woolworths...........................................................................4
Characteristics of Woolworths supply chain and logistical operational activity...................4
Redesign Function and Number of Distribution Centre....................................................4
System of Transport Management.....................................................................................5
Information Technology System........................................................................................5
Deploying of B2B integration platform.............................................................................5
Activities of Woolworths to ensure sustainable supply chain...............................................5
Sustainable Performance Management Solution...............................................................5
Enhancing procedures of Suppliers....................................................................................6
Reduce Environmental Impact...........................................................................................6
Ways Woolworths Influence all the Supply Chain elements for Sustainable Practices........6
Mapping of Supply Chain..................................................................................................6
Communicating expectations.............................................................................................7
Baseline performance of the supplier.................................................................................7
Drive Performance Improvement.......................................................................................7
Ways used by Woolworth to collaborate with Suppliers and logistics partners for Customer
satisfaction..............................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9
Appendix..................................................................................................................................11

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 3
Introduction
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.
History of Woolworths
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).

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 4
Market Analysis and Scope of Woolworths
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).
Characteristics of Woolworths supply chain and logistical operational activity
Redesign Function and Number of Distribution Centre
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

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 5
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).
Information Technology System
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).
Deploying of B2B integration platform
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).
Activities of Woolworths to ensure sustainable supply chain
Sustainable Performance Management Solution
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

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 6
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).
Enhancing procedures of Suppliers
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).
Reduce Environmental Impact
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.
Ways Woolworths Influence all the Supply Chain elements for Sustainable Practices
Mapping of Supply Chain
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

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 7
company to follow a systematical procedure in its supply chain and avoid hurdles as well as
conflicts.
Communicating expectations
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.
Baseline performance of the supplier
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.
Drive Performance Improvement
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.
Ways used by Woolworth to collaborate with Suppliers and logistics partners for
Customer satisfaction
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

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 8
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.

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 9
References
Australia Food News (2017) Woolworths gives suppliers unprecedented access to consumer
data [online]. Available from http://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

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 10
https://www.researchgate.net/publication/228215291_The_Importance_of_Supply_Chain_M
anagement_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]

LOGISTICS AND SUPPLY CHAIN MANAGEMENT 11
Appendix
Source [(Wahyuni, 2010)]