Analyzing Procurement and Supply Chain in Woolworths for Health and Beauty Products

This report analyzes the supply, operational, information, and integration and sustainability issues of chosen company Woolworths, which is involved in delivering of all kinds of supermarket and grocery products. The selected product of this report is health and beauty products. The report discusses the company's vision, mission, and strategic goals, findings of supply, operations, information, integration, and sustainability analysis, and improvement programs to achieve its goals.

Running head: PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
Assessment 4: Analyzing the procurement and supply chain in Woolworths
Name of the Student:
Name of the University:

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Executive Summary
The report is based on analyzing the supply, operational, information, and integration and
sustainability issues of chosen company Woolworths, which is involved in delivering of all kinds
of supermarket and grocery products. The selected product of this report is health and beauty
products. In order to provide quality services to the customers, the company improves its supply
chain operations to achieve competitive advantage and customer value in the Australian market.
The company also started improvement programs so that their identified issues are mitigated and
the company can meet with its mission, vision as well as strategic goals to target more
customers.

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Table of Contents
1.0 Introduction................................................................................................................................3
1.1 Vision, mission and strategic goal of the company...............................................................3
2.0 Findings of supply analysis.......................................................................................................3
3.0 Findings of operations analysis.................................................................................................4
4.0 Findings of information analysis...............................................................................................5
5.0 Findings of integration analysis.................................................................................................7
6.0 Findings of sustainability analysis.............................................................................................8
7.0 Company procurement and supply chain analysis.....................................................................9
8.0 Discussion of improvement programs.....................................................................................10
9.0 Improvement programs can assist the company to achieve its vision, mission and strategic
goals...............................................................................................................................................12
10.0 Conclusion.............................................................................................................................13
References......................................................................................................................................14

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1.0 Introduction
Woolworths is the Australian largest supermarket operator with is operating with 995
stores. The company generates of major of their income from the Supermarkets along with
Grocery stores within the Australian industry. In the year 2017, the company generates of total
revenue of around $55,920,800,000 consisting of sales along with revenue
(Woolworthsgroup.com.au 2016). The selected product of this report is health and beauty
products.
1.1 Vision, mission and strategic goal of the company
The vision statement of Woolworths is “To be one of the world’s most responsible
retailers”. The mission statement of Woolworths is “To deliver the best in convenience, value
and quality for our customers”. The strategic goal of the company is to improve their stock turns
in addition to optimize of network competence while making sure that the customers served by
more than 995 stores.
2.0 Findings of supply analysis
The procurement department manages the supply issues in health and beauty products of
Woolworths. Woolworths supply chain is operated distribution centers, primary freight and
packaging along with barcode needs to ensure smooth service among the trade partners and
stores (Christopher 2016). The company places the customers at start of everything they do, and
this strategy results into lower price, higher innovation in addition to compelling offers. The
importance of sourcing items are development of new health and beauty product categories,
improvement of supply chain, processing facilities and development of strategic sourcing

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relationships with the primary industry partners. Woolworths are worked closely with various
trade partners to provide quality services to their customers (Jacobs, Chase and Lummus 2014).
The company knows that effective supply chain operations can deliver of quality products on
daily basis to millions of customers. Woolworths is chosen of SPS commerce as current strategic
partners with the supplier community. The retail industry chooses of SPS after extensive
evaluation as well as certification processes (Stadtler 2015).
The supply related challenges of Woolworths are safety of products, damage and
spoilage, change into products, speed to market and cost management. There are also threatening
of logistics networks, transportation cost and warehousing, critical handling of products to point
of sale and improper flow of goods among the distribution network. From the supplier
development programme, the company has met with strict product requirements and made their
company’s customer base (Hugos 2018). The suppliers receive of guaranteed trade from
Woolworths.
3.0 Findings of operations analysis
The sales market and key customers of Woolworths is lower and middle class people.
The company sells of their products and one of its geographical dispersion retailers within
Africa. Woolworth’s is used of survey of buyer’s intention as one of the demand forecasting
technique to know and estimate the demands of their customers. It is a method to estimate
demand of the customers such that they are intended to buy the forthcoming time. The other
method Woolworths used for their sales market are sales force competitive method as sales
(Brandenburg et al. 2014)man are closet person to the customers those can judge the mind and

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market. They can understand reactions of customers towards health and safety products as well
as sales trends. Based on estimation of salesperson, the estimation of sales is being predicted.
Woolworths is used of some inventory management techniques for their business
operations such as:
Just-in-time: The products are ordered when there is requirement to ship and
manufacture. The items are ordered back based on delivery time ensured by the supplier.
Accurate response: It helps the company to manage its inventory based on future
demand predictions (Lawley, Birch and Craig 2016).
Different techniques are used for different products as based on category of products,
their selling and buying, the inventory management techniques are selected.
The demand and inventory management challenges of Woolworths are:
 Globalization and faces competition from company across Australia (Fernie and Sparks
2014).
 Ineffective communication among the organizational management and staffs
 Poor quality of goods and services in demanded quantities with acceptable time frames
4.0 Findings of information analysis
Woolworths desires to gain control over Bullwhip effect by looking at its supply chain
structure and its processes. The causes of bullwhip effect are:

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Behavioural causes: When the demand of customers increases, demand of upstream
members is increase to meet with an increase of customers demand (Singh, Shukla and Mishra
2017). Demand of upstream members is increase for replenishing of inventory.
Operational causes: It is caused due to demand forecast updating which is result of
perception of the decision makers into the supply chain (Govindan et al. 2017).
Remedies of bullwhip effect are:
There is requirement of strong collaboration with the supply chain members. It reduces
amplification of orders into the upstream directions. The company should use of Electronic data
interchange to transfer of data among various computer systems which reduce paper work to
generate of customer’s order (Flint, Lusch and Vargo 2014).
Following are the information technology tools used into supply chain of Woolworths
and its key impacts:
Digitalized tracking: It helps to reduce the shipping errors and track the customer’s
order which enhance the customer experiences with tracking the status of orders (Coyle et al.
2016).
Radio frequency identification (RFID): RFID chips are placed on each product to track
the inventory. It improves supply chain processes by detecting order anomalies (de Sousa
Jabbour et al. 2015).
Collaborative practices uses across supply chain of company are:

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Implementation of B2B platform: This collaborative platform allows supplier and
customer to share of information and exchange of documents and contracts. The supplier also
receives of delivery instructions in form of email (Ayers and Odegaard 2017).
Leverage collaboration: The Company can leverage of collaboration outside of its
business operations to create of competitive advantage (Monczka et al. 2015). It is done to share
of system, data along with facilitate of external partnerships.
B2B practice helps to enter into supply chain network, allow the suppliers to forecast,
produce and deliver the products as per customer’s requirements.
5.0 Findings of integration analysis
The 9-step framework for design and assessment of the supply chain integration are as
elimination of the waste into the supply chain to create customer value, advancement of the
technology to improve supply chain, making customer usage visible to supply chain members
(Siqueira, Webb and Bruton 2016). It also consists of reduction to lead time to get closer to
customer’s demands, creation of level flow to reduce reliable into increase of flexibility and
forecasting along with reduction of waste into over production, use of pull system to reduce
complexity in supply chain planning along with overproduction, increasing velocity (Kozlowski,
Searcy and Bardecki 2015). There is throughout and reduction of variation, collaboration with
the supply chain members and focusing on total cost of fulfillment.
The triple A’s supply chains of the company are agility that Woolworths is required to
contain various sets of data across the different levels as well a product hierarchies (Chkanikova
and Lehner 2015). Adaptability is bout long term perspectives of company to respond to the

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market changes. Establishment of strategic partnership with the stakeholders into the supply
chain re required being concerned to turn company into adaptive. Alignment is collaboration
with the suppliers as well as customers in supply chain is required (Jones, Hillier and Comfort
2016). These three factors help Woolworths to achieve a good customer base in addition to better
brand reputation and value in the Australian marketplace. The company can also gain
competitive advantage in the market by providing better organic, health and beauty products to
the customers as compared to its competitors.
6.0 Findings of sustainability analysis
The key procurement and sustainability practices which are used by the company are that
it is required to map the supply chain to have comprehensive understanding of sustainability
impacts into the supply chain. Woolworths is focused on sustainability of supply chain to
communicate with the corporate values as well as culture of suppliers as well as customers.
Establishment and communication the expectations with the supplier code of conduct are
involved the suppliers into sustainability efforts (Lueg, Pedersen and Clemmensen 2015).
Development of training as well as capacity building programs is improved sustainability and
drive of behavioral changes throughout the supply chain. Collaboration with the supply chain
department is required to interact with the stakeholders about any complex supply chain
challenges.
As per the trigger model, the customers are important are those who appreciate the
services as well as products provided, justified existence of supply chain. In order to tackle
triggers of the companies, it is base on two supply chain strategies. Firstly, there is supplier
evaluation of the risks as well as performance is dependent on the key managerial decisions

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(Jones, Hillier and Comfort 2016). The mangers are conducted to list the supplier company at
various tiers based on sustainable supply chain. Second strategy is based on generation of supply
chain management for the sustainable products that is focused on production of kinds of products
that aim to improve environmental as well as social quality. The main aim is to satisfy the
customers and gain of competitive advantage into the market.
7.0 Company procurement and supply chain analysis
In this paper, Woolworths performs procurement and supply chain analysis to increase
the financial performance as well as maintain of competitive advantage. The company adopts of
supply chain since it minimizes the cost as well as maintains own control over the supply chain.
The company connects its vendors along with stores with the distribution centre (Kozlowski,
Searcy and Bardecki 2015). Woolworths adopts of dynamic supply chain alignment for design
thinking into the enterprise supply chain, transformation, innovation into supply chain,
alignment, new business models for the enterprise supply chain, decision support and operating
environment. As per dynamic alignment model, it is required to segment the target market,
supply structures and design of proper supply chain as per company’s objectives and goals
(Singh, Shukla and Mishra 2017). The company is growing as super market store within
Australia, which have larger number of suppliers those have supply of different health as well as
beauty products. Woolworths face of various challenges into their supply chain management
such as bulk order delivery of the products at receiving dock, lack of storage space of the
products (Jacobs, Chase and Lummus 2014). There is inappropriate tracking system to receive
and order the goods; therefore the company is suffering from Bullwhip effects which lead to
insufficient delivery of goods as well as services by means of suppliers.

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The operating distribution centers as well as trucks into the supply chain puts
Woolworths into better position which ensure of optimum distribution efficiency as well as
product quality (Lawley, Birch and Craig 2016). The company is adopted of integrated
competitive strategy to use of combination of cost leadership in addition to differential elements
to compete with competent supply chain to reduce the cost along with brand image to distinguish
the products based on quality (Flint, Lusch and Vargo 2014). Woolworths provides of quality as
well as safety services to the health along with beauty product which help the customers to
increase its sales at global level and optimize the production and supply chain globally. Handling
of products to point of sale is critical as it requires of reliable transportation as well as storage.
The beauty customers want hot products. Supply chain plays a key role to drive of customer
satisfaction in addition to competitive advantage (Monczka et al. 2015). Management of the
cosmetics is needed of expertise in various areas. In order to compete in the market of Australia,
beauty supply chain manager along with third party logistics providers are handling of higher
volumes of products and ensure of on-time delivery at competitive costs.
Woolworths performs of suppler excellence program as its development program into the
supply chain. The personal care market of Woolworths has rapid progress into the Australian
market due to grow into demands of customers for the organic beauty products including of
cosmetics. The health and beauty products are at battle among supply as well as demand
(Kozlowski, Searcy and Bardecki 2015). Once they generate of demand, they ensure that the
products are on stocks and available for the purchase. Handling of the products is point of scale
and it is require of reliable transportation, distribution as well as storage. Therefore, the company
is used to manage its supply chain by managing the suppliers as well as orders of products.

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8.0 Discussion of improvement programs
Changes into the supply chain occurs quickly, therefore Woolworths require of
improvement programs to make possible changes in their supply chain management to gain a
competitive advantage in the market (Lueg, Pedersen and Clemmensen 2015). The supply chain
strategies are educated, benchmark, and collaboration. All the procurement department links of
supply chain to better understand their supply chain. The organization is also required
understanding the performance as compared to its competitors and other retail industry.
Collaboration is also required to interact with the supply chain members such that they can
understand their supply chain operations (Jones, Hillier and Comfort 2016). The goal of
improvement program in supply chain consists of:
1. Reduction of the procurement overhead
2. Reduction of the inventory
3. Savings of the cost into goods as well as services
4. Improvement into the satisfaction level of customers
Continuous education among the employees as well as management is vital improvement of
company’s products in addition to services. A performance driven culture results into
maximization of savings, improvement over the service levels as well as inspired the team of
employees. A training program formulates of comprehensive plan to raise productivity, reduce
the cost as well as improve over the customer services (Fernie and Sparks 2014). Constructive
training drives the organization along with productivity of supply chain improvement. Increment
over the supply chain is being achieved rise and fall into leadership. Therefore, the company
seeks to increase supply chain productivity to seek guidance into logistics professionals.

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9.0 Improvement programs can assist the company to achieve its vision,
mission and strategic goals
The improvement program assists Woolworths to achieve of vision, mission along with
strategic goals. It develops and implements the organization’s productivity. The staffs are
engaged to generate input and help to build commitment to end of the improvement plan
(Brandenburg et al. 2014). It is required to involve the employees in planning of strategy along
with direction for the organization. The improvement program includes of strategies for
development of new product and deliver of new services along with restructure of procurement
department. The organization also develops strategy for innovation that consists of reshape
organizational culture to become innovative as well as implement of process to manage the
supply chain innovation (Ayers and Odegaard 2017). A good organizational culture provides
values, beliefs as well as behaviors of the employees. The culture of Woolworths is unique as
well as diverse to individual’s personality.
Engagement of the employee’s level is ensured of success. Communicate with the
employees is also required to achieve of mission, vision and strategic goals of Woolworths. The
vision of the company is to become responsible retailers in the world. Mission is to deliver of
best into convenience, value as well as quality of the customers (Chkanikova and Lehner 2015).
The goal of Woolworths is to make improvement over their stock turns so that they can optimize
the network competence so that the customers can serve better. The supply chain improvement
programs help the company to achieve its mission and vision.

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10.0 Conclusion
It is concluded that Woolworths desires to achieve a better supply chain management so
that the company can gain of competitive advantage. The inventory is such a location where the
business can maintain stocks of the products such that it ensures for smooth delivery of the
products on order. The company also improves its current supply chain operations to meet with
its strategic goals. The market of personal care and beauty products is increasing due to grow
into customer’s demands of the organic products. Proper delivery and transportation mode is
selected to deliver the products on time and meet with customer’s business value.

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