Procurement and Demand Management in Woolworths - Supply Chain Management

This article provides an overview of the procurement and demand management of Woolworths, the biggest retail company in Australia and New Zealand. It explains how supply chain management helps Woolworths to offer best goods and services to customers at suitable prices in the marketplace. The article also discusses the procurement process and strategies used by Woolworths to maintain effective procurement and supply chain management in the workplace.

Running head: Supply chain management
Supply chain management

Supply chain management
Table of Contents
Introduction.................................................................................................................................................3
Procurement and demand management....................................................................................................3
Conclusion...................................................................................................................................................7
References...................................................................................................................................................9
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Supply chain management
Introduction
The main aim of this task is to provide a brief overview about the procurement and
demand management of Woolworths. Woolworths is the biggest retail company which delivers
retail products and services to the customers across the world. In today’s competitive world, the
firm is expanding and flourishing its business activities day by day. Also, it explains that how
procurement and demand management can be applied in the Woolworths. Further detail of the
task has been discussed below.
Woolworths group is a major Australian company which operates and manages its
business activities and operations in Australia and New Zealand. It is the second largest
organization in Australia and New Zealand evaluated by revenue. The company is the biggest
takeaway liquor retailer in Australia. The firm was incorporated in 1924 with it’s headquarter is
situated in Bella Vista, New south wales, Australia. The main object of this company is to
deliver valuable and best quality products and services to its customers in the market place.
There are approx 205,000 employees employed in the organization. The firm is trusted on
business partners such as manufactures and local farmers. Along with this, the organization has
approx 3,000 stores in different countries across the world. In addition, Woolworths follows
corporate social responsibilities effectively and efficiently. Woolworths values include customer
obsessed, being responsible, inspirational, collaborative and quality. The main mission of the
corporation is to create a bright future by delivering unique and effective products and services
to the customers across the world (Woolworthsgroup, 2018).
Procurement and demand management
Woolworths uses effective and unique procurement and demand management to save the
resources and capital. Procurement is a process and method by which items and stocks are
bought from outside suppliers. Managing the ordering, review, receipt and approval of items
from suppliers are involved in the procurement management process (Varley, 2014). On the
other hand, demand management is a key practice in the procurement process to reduce costs by
managing the necessities, controlling demand and distinctive between needs and wants. The
procurement and demand management helps to overcome the competitors in the marketplace.
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Supply chain management
The firm uses tradestone’s merchandise lifecycle management platform to deal with its supply
chain within the organization. The tradestone offers a platform for the business activities and
operations to handle orders, B2B sales, suppliers and financing. It is connected with more than
6,000 suppliers. This management also helps to handle the various types of products such as food
and beverages (Varley, 2014). Therefore, the company uses tradestone platform to manage and
control the procurement and demand of the customers. The key strategies which are involved in
merchandise life cycle management have been stated below.
Strategic planning: Under this stage, the firm needs to ensure planning processes to integrate
goals and objectives. SAP solutions help streamline merchandise life cycle processes so retailers
can easily execute and implement strategic merchandise decisions.
Merchandise and assortment planning: SAP solutions are unable to define the channel, plans
and merchandise with including place holders for new styles. Actions and events can be assigned
for sales, buy and margin targets at all levels of the location.
Promotion planning: Promotion planning plays a vital role in Woolworths Company to increase
the number of customers in the marketplace. Along with this, performance details are easily
available to provide support for implementation of vendor rebates.
Life cycle pricing: SAP (system application and product) helps the company to manage and
control the trade-offs between profit, returns and price image and keep the prices that provide
support a retailer’s brand strategy. By evaluating shopper demand, location price, SKU level and
channel, price changes that meet strategic goals and objectives can be chosen. Along with this,
life cycle pricing helps to set the appropriate prices of the products and services.
Along with this, Woolworths uses procurement and demand management process to stay
in the competitive market. This process also helps to buy the goods and services from the
enormous suppliers. The company uses demand management to fulfill the demand, needs and
requirements of customers. In the operations and activities of retail industry like Woolworths
store, demand management is considered the management of demand which is generated
products and services at the stores for the customers. In addition, Woolworths monitors and
evaluates the choices, preferences and desires of customers to sell the products effectively. In
today’s era, the employees at Woolworths have not been able to grip the requirements and
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Supply chain management
deliver the products and services as per their ability. Considering the demand and requirement is
not enough to handle and control demand fluctuation. The company’s capability is essential to
accomplish the demand of consumers. Thus, it is important for the firm to know its capability in
terms of worker, equipment, time and amenities. Woolworths uses effective and unique supply
chain management to offer best goods and services to customers at suitable prices in the
marketplace. The effective goals of the supply chain management is to minimize the inventory
and with the assumptions that products are available when needed (Fernie and Sparks, 2014).
Along with thus supply chain management includes transportation vendors, suppliers, operations
and warehousing and stock. The company is being flourishing and rising super market company
in Australia and they have several suppliers in the marker. However, the company faces
enormous challenges in the marketplace.
Moreover, the organization uses effective strategies such as demand and capacity
management, supply chain analysis to procure the resources. The evaluation of capacity is
important to evaluate the capability of resources and benefits of the resources. It will also help to
increase the revenue and profitability of the company in the market. In addition, Woolworths
uses six sigma techniques to attain and achieve the business system. By initiating the six sigma
model, the company has been able to identify the gap for improvement and the employees can
evaluate the work and collect various types of data for the process that can assist to close up the
gaps. This model also helps to improve the quality of goods and services in the competitive
market (Nicoletti, 2013).
To achieve the efficient and effective operation system, Woolworths uses advance planning
and scheduling system. The firm can use the linear programming methods and other algorithms
with the help of planning and arrangement system. By using this system, the organization
manages future demand efficiently and effectively. Labor planning is also done by the firm to
satisfy the needs and requirements of the customers. Work schedule is fixed by top management
to retain and manage the workers at the workplace (Jacobs, Chase and Lummus, 2014). In
addition, managers and leaders should build commitment and loyalty in the organization and
create a positive working environment in the workplace (Rushton, Croucher and Baker, 2014). It
will motivate the workers for doing task and duties effectively. There are various strategies are
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Supply chain management
used by Woolworths for better procurement and demand management that have been detailed
below.
 The company adopts a demand driven planning and operating models based on the
demand and needs of the customers. It will help to attract more and more customers in
the rivalry market.
 Apart from this, the company builds and develops an agile and adaptive supply chain
with rapid planning. It is an effective and unique strategy to obtain the resources
effectively.
 After build and develop supply chain with rapid planning, Woolworths optimizes product
management and products designs for manufacturing, supply and sustainability to attain
long term profitability and innovation.
 At the end, the firm ensures reliable and predictable supply within the organization
(Hines, 2012).
The consumer behavior is constantly changed in the organization thus the firm use
procurement software. There are various factors influence the procurement management in the
organization such as changes in technology, new innovation and changes in software (Azambuja,
Ponticelli and O’Brien, 2014). Woolworths uses enormous strategies for better procurement
management which are discussed below.
Keeping legacy systems in check: Under this strategy, the procurement team sets tabs on any
outdated legacy systems that might not be well matched with new technologies. It will help in
procurement of resources and capital (Masterman and Masterman, 2013).
A more joined up approach: A more joined up approach is used by Woolworths in which
buying team needs to consider everything from logistics and implementation to products and
services.
Maximizing return on investment: It is also an effective and unique strategy which used by the
management of Woolworths.
Along with this, Woolworths initiates unique procurement management process in the
organization. This procurement process is created to obtain a seller at appropriate prices. The
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Supply chain management
process includes plan procurement, conduct procurement, administer procurement and close
procurement (Becker, Kugeler and Rosemann, 2013). The procurement process has been stated
below.
Plan procurement: Plan procurement is the process of deciding what to buy, when and from
what source to buy the products and services. During the planning procurement process, the
procurement method and technique is assigned to the workers to fulfill the procurement
requirements and needs.
Conduct procurement: The conduct procurement includes selecting a seller, receiving seller
responses, and awarding a contract. Under this process, proposals and bids from sellers are
measured and one or more seller is appointed to initiate the work. It is an effective process of
procurement which is used by Woolworths within the organization (Sanchez, 2013).
Administer procurement: This process helps to monitor the performance and effective
measures can be taken for corrections. It helps to improve and enhance the performance and
productivity of the organization.
Close procurement: The close procurement is also called the contract closure. Procurement is
said to be finished when the contract reaches its deadline or when the contract is terminated
without completing the task.
In this way, the Woolworths has been able to apply procurement and demand
management in the marketplace. This management helps to increase and enhance demand
volatility and it also improves value creation (Fernie, Fernie and Moore, 2013). Along with this,
the company can focus on the profitability and returns as it also maximizes operational
efficiency. Team empowerment and strategic resource allocation are other benefits of effective
and unique procurement and demand management. Along with this, supply chain management
also provides a supply chain networks to the customers and it also manages inventory level of the
firm.
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Supply chain management
Supply chain management of Woolworths
(Source: pierce, 2009)
Supply chain map of Woolworths
Manufacturer
Retailer
Distributor
Supplier Logistics
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Key services
 Environment protection
 Information security
 Supply chain security
 Social responsibility
 Product safety and quality

Supply chain management
Conclusion
On the above discussion, it can be concluded that Woolworths uses attractive and
dynamic supply chain and logistics management to increase efficiency and minimize the cost of
the firm. No company can survive its business activities and operations without effective supply
chain and logistics management. Along with this, procurement, supply chain and demand
management also play an empirical role in Woolworths Company in order to increase outputs
and boost corporate level of the firm. Now it is recommended that the organization should use
dynamic strategies to maintain effective procurement and supply chain management in the
workplace.
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Supply chain management
References
Azambuja, M.M., Ponticelli, S. and O’Brien, W.J., 2014. Strategic procurement practices for the
industrial supply chain. Journal of Construction Engineering and Management, 140(7),
p.06014005.
Becker, J., Kugeler, M. and Rosemann, M. eds., 2013. Process management: a guide for the
design of business processes. Springer Science & Business Media.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain (4th ed., pp.1-28). Kogan page publishers.
Fernie, J., Fernie, S. and Moore, C., 2013. Principles of retailing. Routledge.
Hines, T., 2012. Supply chain strategies: Customer driven and customer focused. Routledge.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain
management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Masterman, J. and Masterman, J.W., 2013. An introduction to building procurement systems.
Routledge.
Nicoletti, B., 2013. Lean Six Sigma and digitize procurement. International Journal of Lean Six
Sigma, 4(2), pp.184-203.
Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution
management: Understanding the supply chain (5th ed., pp. 16-32). Kogan Page Publishers.
Sanchez, A., 2013. The role of Procurement. In The International Handbook of Public Financial
Management (pp. 312-335). Palgrave Macmillan, London.
Varley, R., 2014. Retail product management: buying and merchandising. Routledge.
Varley, R., 2014. Retail product management: buying and merchandising (3rd ed., pp.5-17).
Routledge.
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Woolworthsgroup, 2018. About us [Online]. Available at
https://www.woolworthsgroup.com.au/page/community-and-responsibility/group-responsibility/.
[Retrieved from 2nd April 2018]
Woolworthsgroup., 2018. Strategy and objectives [Online]. Available at
https://www.woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-objectives
[Retrieved from 2nd April 2018].
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