Supply Chain Management Challenges

This assignment delves into the complexities of supply chain management within the food industry. It examines historical trends in meat consumption, highlighting the rising popularity of veganism as a challenge to traditional players. The analysis explores sustainable supply chain practices and their impact on the industry's future. The text references various academic sources to provide a comprehensive understanding of the topic.

Case study 4 - Woolworth Meat
Company

EXECUTIVE SUMMARY
This project is related to the supply chain management of Woolworth Meat Company.
Meat industry has seen constant growth but they have to face severe challenges in forthcoming
time. Making strong connections with suppliers is crucial for maintaining the balance between
demand and supply. By selling high quality in products, first can easily expand their business in
the domestic and global market. Customer’s relation is an area which should be focused on
priority basis as it can enhance the revenue of an organisation.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Industry analysis and business environment..........................................................................1
SUPPLY CHAIN MANAGEMENT...............................................................................................2
Issues in SCM ........................................................................................................................2
Meeting customer's need (Customer relation management)..................................................3
Supplier relation management ...............................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Meat industry is continuously growing because the demand of protein rich food items is
increasing. People are getting health conscious and they do not want to consume any eatables
which provide harm to their body. Main reason behind enhancement in the global demand of
meat items is development of Asian countries. Income of people living in this region is
increasing along with their population. Supply chain management is related to manage flow of
goods and services (Thun and Hoenig, 2011). It starts with buying raw material and ends at the
point of consumption. Woolworth Meat Company is a leading organisation of meat industry.
They are known for their fresh food retail stores. This report will discuss about the competitive
environment and an analysis of industry. Understanding of SCM will also become an important
part of this report. The relation with supplier and customers of company's management will be
included in this file as well.
Industry analysis and business environment
In Australia, meat industry is going through rapid changes. Customers are demanding
leaner cuts and companies are also seeking new methods for ease of preparation. Woolworth has
about 36% of market share and they are holding a dominant position in this sector. Beef is an
important part of this field and firm has almost 1 billion dollar sales of this product. Pork and
lamb is other significant part of this industry. After remaining on a growth track for a long time,
this sector is facing some serious challenges. Companies are failing to maintain high quality
because of ethical issues. They are struggling to make an effective management system because
marketing of these products is very different. Some people are concerned about future growth of
this industry as the problems relating to global warming is enhancing continuously. This sector
has failed to reduce their carbon footprint and this hampers their revenue in the upcoming time.
A large segment of population is promoting and following the idea of becoming vegan.
Some people do not like each non-veg food but they consume each item like milk because they
consider it to be vegetarian. But now they do not want to eat anything that is made up of any
animal, they are refusing to consume milk and items made by the same. This thinking will
develop new challenges for this industry and the biggest problem is that they cannot do much
about it (Stadtler, 2015). The safety measure is another big concern for many enterprises,
government is going to bring more changes in this area and it will increase the cost of operation.
1

Cultural change would be an interesting thing for this sector. Goat meat has seen sharp rise in
terms of demand which is shocking for many firms. People are also looking for more than one
variety of an item like organic and everyday range. Aldi, a successful enterprise of grocery
sector, is becoming the main competitor of Woolworth Meat Company. They are beating them in
terms of price and grab their region where cited firm was strong. Suppliers of this industry are
becoming contractor of Aldi. They are rating this organisation above Woolworth as doing
business with Aldi is much easier. Around 80% vendors of Woolworth have signed contract with
the organisation, remaining twenty percent do not have any agreement with them. This enterprise
uses them at the time of peak season. Local butcher shops are significant player of meat industry.
They make good relations with customers and add more value to a product.
SUPPLY CHAIN MANAGEMENT
Every organisation has various departments who work on a specific field. The general
idea of conducting a business is to make a product and then sell it in the market for a profitable
amount. But with increasing complexity in business, enterprises have to make different
departments like marketing, finance, etc. Importance of supply chain management is enhancing
because organisations want to deliver better product in less duration. Customers do not want to
wait in line and get proper value for the money which they are paying for an item.
Issues in SCM
Finding quality raw material is a big concern for Woolworth Company. They always
believe is providing the best meat to their customers but vendors are failing to fulfil their needs.
Farmers are facing difficulties is keeping their animals healthy as new virus and disease are
hampering health of cattle. This is putting a negative impact on the supply chain of firm. They
have to change their suppliers in regular intervals of time in order to find the necessary quality of
meat. This organisation does not want to bring down their standards so instead of buying poor
standards, they take more time and purchase goods accordingly. Tasmanian customers only
prefer their own brand which was the main reason that Woolworth bought Roelf Vos and Purity.
Company has many suppliers but they do not have necessary education about farming. Managers
of enterprise think that supply chain start from the birth of an animal but this thinking is wrong.
If farmer will feed necessary nutrition to the livestock, then their offspring will be much better.
2

Management need to tell their suppliers that they should not feed harmful chemical to their
animals. A monitoring programme can solve this issue.
In transit – Transportation of livestock from farms to slaughter house is a risky process.
Most of the animals fail to face this stress and it made a negative impact on their health (Pagell
and Shevchenko, 2014). Sometimes, they die in the transit. This also creates an extra problem of
legal trouble. Woolworth Meat Company can appoint an animal welfare expert who can check
the health of livestock before they are loaded for transportation. The height of cargo and floor
space should be checked before the transit.
(Source: SUPPLY CHAIN MANAGEMENT. 2017)
Moving of meat into the market – There are various kinds of meat and their packaging
and cutting happens by using different processes. Some items are needed to be stored in cold
storage which means additional cost to the company. A system relating to food safety is required
on priority basis in order to reduce the waste of resources.
Rapid change in culture – It is very difficult to expect the demand of meat product
because tastes and preferences of customers are changing swiftly. Some buyers are concerned
about size of eatables while other are asking for more variety (Sarkis, 2012). This is creating big
problem in supply chain because company fails to satisfy the need of customers as they do not
3
Illustration 1: SUPPLY CHAIN MANAGEMENT.

purchase more quantity from supplier while other time they have to face loss as people do not
buy some meat product due to change in taste.
Meeting customers need (Customer relationship management)
Some people eat meat because they find it tasty. For them, vegetarian food is not
delicious and they do not get variety in this segment. A large number of buyers purchase various
kinds of meat due to the protein factor. Young generation is getting heath conscious, they want to
eat something that give them power and keep their body in a good shape (supply chain
management, 2017). Doctors also recommend meat item because of the nutrition that is present
in these products. There was a time when people did not prefer to eat boiled food because their
taste and behaviour is changing towards eatable items. Increase demand of goat meat is another
example of change that is happening in the buying nature of buyers.
Woolworth Meat Company has adopted a policy of transparency. They are telling
shopper every single detail about their products. People are preferring to buy organic food.
Companies are understanding this demand of consumers and they are offering more organic
eatables. They are also using attractive packaging which helps in reducing the smell of meat
(Seuring and Gold, 2012). Woolworth has a strict policy for their suppliers. They want them to
follow all the quality protocols. This company has made internal quality team who is responsible
for the execution of various plans and maintaining high level of standards. They also do regular
supervision and surprise inspection of their abattoir in order to find the flaws which they are
committing. Providing quality meat product is significant for organisation because their
competitors like Aldi has potential to grab high level of market share. They give rewards to the
vendors who follow all standards relating to quality and safety (Beske, Land and Seuring, 2014).
This company is selling 80 million of kilos annually. Their sale of pork is 330 million
dollars. Name of Woolworth come in the list of largest seller of lamb across globe. These figures
show that cited firm hold majority of meat market and most of the customers are happy with
their products. They follow regulations made by government agencies regarding safety, slaughter
house, quality of items, etc. People always like to buy eatables from a company who comply the
norm that is present in industry. Listening to shopper is very important for finding their future
needs. It also helps in analysing the changing trends. Mention entity made an application which
helps them in checking the quality of stored meat in warehouse. They check a weekly status so
that necessary changes can be made within less time frame.
4

Complaint of customers is solved on monthly basis. Managers of this enterprise ask them
about the problems. Sometimes, they meet them to understand their buying experience. These
small things make a huge impact on the minds of shopper. They feel their importance when a
senior person of the organisation asks them for feedback (Zhu, Sarkis and Lai, 2012). It is also
beneficial for enterprise because they get a rough idea about the future needs of buyers.
Customers serve as the god for a firm. This corporation also understands their importance. They
are focusing on micro details like the flavour of sauce. This does not have direct connection with
meat sale but it is significant for providing better buying experience to the buyers.
The demand of chicken and pork has seen 2-3-fold rise in last 5 decades. Woolworth
Meat Company needs to consider these changes in trend and they should maintain their supply
chain accordingly. In the year 1950, demand of mutton was very high in Australia. Prices of beef
and lamb has increased more in last 50 years as compare to chicken and pork. This means that
customers are buying the meat which is available at economic price, instead of focusing only on
premium quality, this company should maintain a balance between price and the standard which
they are offering (Hugos, 2011).
Supplier relation management
Woolworth has set some specific and measure objectives for their vendors. They target
aggressive but attainable, concentrators cannot say that they are not realistic. This organisation
has also set some time to achieve these aims. Management of firm communicate with their
suppliers because on monthly basis so they can understand their problems and solve them before
it become a big trouble. Their performance is measured doing comparison with peers. This show
the level of improvement that is needed in upcoming time. Woolworth has many contractors and
80% of them are has signed a deal with them. It is difficulty for company to focus on everyone
so they have also started a quarterly performance review in order to focus on every supplier.
Non-conformance report raise three significant issues, first is related to foreign objects,
second is temperature and last is incorrect cutting lines. The meat that is coming from other
nations sometime fail to comply with the standards that is present in Australia. The temperature
in which meat products are needed to be stored should be according to the requirement of items
(Jacobs, Chase and Lummus, 2011). Animals should be slaughtered in way that they do not feel
much pain in the process. Company should concentrate of proper cutting lines if they want to get
a better report in next quality audit. Meat is an important part of grocery budget; it accounts for
5

almost 45% of the total sales. Suppliers should understand the reason behind continuous
supervision and the objectives which company want them to achieve. Quality is key elements for
maintaining the dominance in market, fresh meat customers can ignore other areas if they get
desired standards. Enterprise can return a box of meat to the supplier but meat cut is still
untraceable.
CONCLUSION
At the end, it can be concluded, that understanding the demand of customer can help a
company in making a better supply chain system. They have to follow standards made by MSA
because people like to buy items from a company who comply with the rules that are made by
government authority. This is considered as proof the quality of meat through which an
enterprise can sell better and it will not harm to health of people. Removing problems of supplier
is significant for a firm in order to maintain their dominance in a sector. Meat industry has seen
decent growth in last 5 decades but they will face bigger challenges in the upcoming scenario
due to increasing popularity of “become vegan”. Demand of chicken and beef has seen
surprising growth in the last 5 decades while the mutton, which was favourite meat for a longer
time and has lost its charm in present era.
6

REFERENCES
Books and Journals
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and
dynamic capabilities in the food industry: A critical analysis of the literature.
International Journal of Production Economics. 152. pp.131-143.
Hugos, M.H., 2011. Essentials of supply chain management (Vol. 62). John Wiley & Sons.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2011. Operations and supply chain management
(Vol. 567). McGraw-Hill Irwin.
Pagell, M. and Shevchenko, A., 2014. Why research in sustainable supply chain management
should have no future. Journal of supply chain management. 50(1). pp.44-55.
Sarkis, J., 2012. A boundaries and flows perspective of green supply chain management. Supply
Chain Management: An International Journal. 17(2). pp.202-216.
Seuring, S. and Gold, S., 2012. Conducting content-analysis based literature reviews in supply
chain management. Supply Chain Management: An International Journal. 17(5). pp.544-
555.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Thun, J.H. and Hoenig, D., 2011. An empirical analysis of supply chain risk management in the
German automotive industry. International Journal of Production Economics. 131(1).
pp.242-249.
Zhu, Q., Sarkis, J. and Lai, K.H., 2012. Examining the effects of green supply chain management
practices and their mediations on performance improvements. International journal of
production research. 50(5). pp.1377-1394.
Online
SUPPLY CHAIN MANAGEMENT. 2017. [Online]. Available through:
<https://www.kbmanage.com/concept/supply-chain-management>. [Accessed On 7th
October 2017].
7

8