Challenges of Supply Chain Management in Woolworths

Supply chain management
Woolworths
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Table of Contents
Introduction.................................................................................................................................................2
Main body...................................................................................................................................................2
Recommendations.......................................................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
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Introduction
Supply chain management is the process of managing the flow of services and goods. This
generally deals with the transformation of the raw materials into the final product. The supply
chain management includes mostly everything continuing from the production of the product to
product development. This optimizes the various aspects of the company such as the financial
capital, materials information, inventory and many more. There are times when these supply
chain faces certain challenges and that hamper the processing of the company in a various
manner. The general challenges that are being faced by the company are related with access to
the latest technology, then supplier base consolidation and many more (Catalogimages, 2019).
The paper deals with all these challenges and what are their impacts on the company
Woolworths Australia. Woolworths is considered as one of the big supermarket retail chain
business in Australia. For example, one of the common challenges that the company Woolworths
faces is that the company is not providing quality materials to the customers. As the company
has many supply chains all around, some supply chains do not provide quality raw materials and
it causes problems in customer’s loyalty grounds. This hampers the brand name of the company
(Arli & Dylke, 2013). The causes of the challenges and the impacts on the present state and on
the future of the company are also being discussed in a broader manner. The main objective of
this paper is to firstly showcase the challenges faced by the supply chain management of
Woolworth and secondly providing efficient recommendations to mitigate those for the proper
development of the company on the Australian grounds and worldwide. Supply chain
management plays an important role in the company’s growth and development. So the company
manages its supply chain very strategically and evidently. This is the reason for which the critical
analysis is being done to understand the challenges and issues faced by Woolworths in managing
its supply chain (Aries.mq., 2019).
Main body
Challenges of supply chain due to increasing fuel price
The Australian giant Woolworths Group is experiencing significant challenges due to the
changes in the business environment. In the last few years, the global business environment is
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continuously changing. Globalization is rapidly extending and advanced technologies are
arriving, which have been bringing radical changes in the business environment across the globe.
Apart from this, the fuel price is also increasingly growing over the years and it also affects the
supply chain of companies across the globe. Furthermore, like other big companies, Woolworths
also face problems due to increasing fuel prices. The incrementing fuel price affects the supply
chain of the company as the transportation cost of the company is increasingly growing due to
incrementing fuel cost and it affects the operation of the organization. The increasing operational
cost affects the profitability of the organization and hence the sustainability of the organization is
also affected (Directdrivelogistics, 2019).
The increasing fuel price is a critical challenge for the supply chain management of Woolworths
as the company is a very big organization and it is operating in vast areas if the Australian
Country, hence, the company has a huge supply chain to produce and distribute its products and
services all across the areas (Scholten, Sharkey Scott & Fynes, 2014). The company has to use
any means of transport to enable the organization to accomplish an efficient supply chain.
Furthermore, all the transports are running by fuel and hence, increasing price of fuel has
increased the fuel cost and transportation cost for the company, which in turn influences to
increase the operational cost of the company. Hence, the increasing fuel cost imposes significant
threats and challenges to the Woolworths for maintaining the operational cost and profitability of
the organization. Hence, the increasing fuel price is a crucial supply chain challenge for
Woolworths Group (Augustine, 2019).
The specific supply chain challenge due to the hiking of the fuel price across the globe is an
important challenge for business organizations like Woolworths. It is important as it increases
the transportation cost of the organization considerably, which impacts on the operation of the
organization. The operation cost of the organization uses to be increasing due to the hiking of the
fuel cost, which in turn impact on the profitability of the organization (Kasanagottu, 2018).
Moreover, organizations like Woolworths Group has to bear considerable expenses for
transportation due to increasing fuel cost. Hence, it affects the profitability of the organization,
which in turn reduces the sustainability quotient of the organization (Osoro, 2015). In this
context, the increasing price of fuel in the global market is an important challenge for supply
chain management of Woolworths.
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