Purchasing Management for Woolworth: Supplier Selection, ICT Operations, and Cost Analysis

Running Head: PURCHASING MANAGEMENT 1
Purchasing Management
Names
Institution

PURCHASING MANAGEMENT 2
Purchasing
Introduction
Woolworth is owned by Woolworths limited and is one of the leading
supermarket/grocery stores in Australia (Ghosh, 2015). The company deals with a variety of
products, including electronics, clothing, and fresh foods, among others. To succeed in its
operations, the company has unique operational and marketing strategies which most of its
competitors have found hard to implement in their operations. Being a company which targets
many customers and also one which operates in a competitive market, this company has
implemented various strategies of selecting its suppliers, undertaking its purchasing operations,
and identifying its purchasing cost (Robert, 2014). Irrespective of being one of the market
leaders in the retail industry, this company faces competition from both local and international
players. Some of its competitors include Carrefour, Coles group, Kroger, Target Corporation,
Amazon among others.
The company operates by the use of mission of helping members of the Woolworths
family to attain financial security and well-being by providing a range of relevant, competitively
priced savings, leading and financial services (Huong, 2015). This statement has been enabling
this company to commit itself towards ensuring it works for the satisfaction of its consumers
through providing products which can make them realize value for their money. The company
also has a goal of having its customers put it at first across all its brands
The purpose of this paper is to discuss the supplier selection criteria for this company, its
ICT for purchasing operations, and purchasing cost analysis. The paper will provide an overview
of Woolworths considering various factors used in its purchasing process. Because suppliers are

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essential in this company, the paper will identify how the process which the management use to
select people involved in its supply. The paper will also discuss some of the things involved in its
purchase process, especially how it uses ICT in this aspect, some of the ways it used to minimize
purchase cost, and some of the tools it can use to measure costs involved in its purchase process.
Supplier selection criteria
For Woolworths, suppliers are essential stakeholders because they play a crucial role in
ensuring the retail store has what it needs to provide customers with through assisting in moving
products from producers to the store (Robert, 2014). To come up with a good team of suppliers,
this company considers various things, like for instance, cultural fit, the cost, the value,
experience in the current market and current references, flexibility among others. The
management also focuses on enhancing its supply chain by ensuring all activities which are
necessary for aligning supplier relationships the company’s overall business strategies and
interests are undertaken.
According to Bryan & Matthew (2015), this company offers a wide range of products and
therefore it considers selecting those who are able to provide a wide variety of products. The
primary reason why Woolworth consider this factor is that its management understands that
having many suppliers to supply different types of products may be costly, or may lead to
inconveniences such as some products not being delivered on time. For this reason, it chooses
suppliers who have sufficient resources to deliver a wide variety of products whenever an order
is made.
The supplier selection criteria in this company include various things and processes
targeted to ensuring the company attains suppliers who understand its goals and objectives, and

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also one who knows the importance of doing the right thing not only for the benefit of the
company but also for the satisfaction of its stakeholders. Woolworth also focuses on ensuring its
supply chain is made up of a team of professionals, and ones who value customers and other
stakeholders.
When in need of suppliers, the management holds a meeting to discuss some of those that
the company may need to consider. During this meeting, the management team deliberate
various things such as the reputation of the stated suppliers, their resources, how they understand
the business model of this company among other factors. After this, a final decision is made and
the potential supplier contacted to state whether they can sign a contract with the company.
Once the supplier is selected, the company provides various details concerning its
expectations. The company also negotiates about the cost, the terms of payments and other
crucial information. According to Robert (2014), this Woolworths values relationship with its
suppliers and therefore encourages the selected suppliers to ensure that they report all matter
which can hinder a positive relationship with the company.
According to Teller & Korbrin (2015), this company has in some incidences experienced
out of stock products due to supplier failure, a situation which affects its relationship with
customers. Although the company has a purchase goal of ensuring its counters have sufficient
stock, sometimes engaging in business with unreliable suppliers has seen it fail and therefore it
should come up with a solution to address this issue.
For its management to ensure that it attains its purchase goal, it is recommended to ensure
that it signs contracts with suppliers who are reliable, and ones who understand the importance of
delivering products at the right time and in the right state (Joanna, 2015). It is also advisable for