Sustainability of Sourcing Strategy of Woolworths

This report discusses about the sourcing strategy of Woolworths. It elaborates on whether the sourcing strategy can be said to be sustainable. The report also makes recommendations regarding the measures that can help in improving sustainability in relation to the sourcing strategy of the organisation.

Running head: SUSTAINABILITY OF SOURCING STRATEGY OF WOOLWORTHS
Sustainability of Sourcing Strategy of Woolworths
Name of the student
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SUSTAINABILITY OF SOURCING STRATEGY OF WOOLWORTHS
Executive Summary
The primary purpose of this report is to discuss about the current sourcing strategy of
Woolworths. It discusses whether the current sourcing strategy can be said to be sustainable.
The report discusses how B2B integration is used by Woolworths that helps in increasing the
efficiency of the supply chain. It elaborates on how Woolworths makes use of strategic
partner that helps in the functioning of the business. The report also makes recommendations
regarding the measures that can help in improving sustainability in relation to the sourcing
strategy of the organisation. It recommends that Woolworths can use the source tagging
solution for improving their business.

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Table of Contents
Introduction................................................................................................................................3
Company Background................................................................................................................3
Current Sourcing Strategy of Woolworth..................................................................................4
Sustainability of current sourcing strategy.................................................................................5
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................8
References:...............................................................................................................................10

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SUSTAINABILITY OF SOURCING STRATEGY OF WOOLWORTHS
Introduction
Strategic sourcing refers to the institutional procurement process that can help in
improving and re-evaluating purchasing activities in relation to a company. Strategic sourcing
is indicative of a service solution that is customized so that it can meet the needs of the
individual client. Supply Chain Management is indicative of the planning and execution
pertaining to supply chain activities that can help in creating net value for an organization. It
helps in the building of competitive infrastructure and the leveraging of worldwide logistics
that can help an organization in making profits. Woolworths Supermarket refers to the
Australian supermarket which is owned by that of Woolworths Limited
(Woolworthsgroup.com.au 2018).This report discusses about the sourcing strategy of the
company. It elaborates on whether the sourcing strategy can be said to be sustainable. It
critically analyses the sourcing strategy of the company and suggests recommendations that
can help in improving the sustainability pertaining to sourcing strategy of the company.
Company Background
Woolworths specialises in the selling of groceries, health product, household product,
baby supplies along with stationery items. The company is instrumental in operating 1000
stores within Australia. The company was initially founded in the year 1924 and the
consumer interest started to grow on account of the opening of more branches of the
company. Woolworths started to sell different kind of goods and they provided the facility of
cheap pricing along with money back guarantee. The customers can get a wide range of
choices for shopping at Woolworths that has ensured the profitability of the company.
Woolworths was chosen for this report as the company has actively taken an approach
towards sustainability that has have a positive influence on the economy and the environment
of Australia (Fernie and Sparks 2014). Woolworths wants to give rise to a better world by
ensuring sustainability pertaining to its supply chain management process. The company was
chosen as it has adopted an integrated approach in relation to sustainability that has made it
more responsible to the needs of the modern day consumer.
Current Sourcing Strategy of Woolworth
The largest food retailer of Australia called Woolworths Supermarkets is aware of the
fact that supply chain operation being efficient can help in the delivering of fresh food to a
large number of customers throughout Australia. Woolworth has made use of B2B
integration platform that has provided real time integration with the supplier system. The

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platform helps in leveraging AS2 protocol for facilitating business to business
communication. This kind of specification can help in the aspect of automated order
fulfilment among the different business my making use of internet (Monios 2015).
Woolworths chose the SPS Commerce as a strategic partner that helped them in the aspect of
integrating with the supplier community. SPs has got a track record pertaining to the assisting
of suppliers that has provided the company with strong technical capability.
SPS has extended enormous amount of help in supporting the suppliers of
Woolworths for adopting e-business standard along with technology for a period of more
than 10 years. SPS is instrumental in providing e-business fulfilment service to the suppliers
of Woolworths and it helps them in managing of 100,000 documents in a month. The
technology enabler can help the organisation in achieving success within the e-commerce
sector (Hingley, Lindgreen and Grant 2015). The sourcing strategy of Woolworths works in
the omni-channel pattern that helps the company in the aspect of streamlined fulfilment.
Woolworths engages in regular consultation with the suppliers that helps in
emphasizing on the supplier excellence standard of the company. Supplier segmentation is
being undertaken presently that forms a part of ethical sourcing review. Woolworths has
adopted the Local Food Sourcing Strategy that has brought more locally produced foods to
the supermarkets across that of Australia. Woolworths supports the local suppliers that can
ensure its sustainability in the prevailing environment. Woolworths has also appointed local
sourcing manager to that of the individual state. These managers can help in the identification
of local product. Is the current sourcing strategy sustainable (Mangan, Lalwani and Lalwani
2016). Local sourcing road show can be hosted that can help in communicating new
opportunities in relation to the local suppliers.
Woolworths has also developed individual ranging plan for the local suppliers.
Woolworths has acquired a new local supplier called Eric Robinson that has helped the
company in extending support to the local community. The sharing of the flavours of the
community can help in ensuring the sustainability of Woolworths and help them in reaching a
wider range of the customers. The customers of Woolworths wants the company to reach out
to the local communities that can help in sourcing more local food (Mena and Bourlakis
2016). This new strategy can be effective in allowing the stores to tailor individual ranges
that can cater to the taste of the local community.

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Sustainability of current sourcing strategy
The B2B integration of Woolworths Supermarkets can help in improving the supply
chain visibility in relation to the company. It can help Woolworths in improving the factor of
supply chain responsiveness and reduce the operational cost of the company. The business
integration can help a company in getting access to a large number of suppliers and enable
the fostering of partnerships. The AS2 trading solution can come to be great use for
Woolworths and it has eliminated the need pertaining to value-added network. AS2 document
transport protocol of Woolworths has helped in meeting various kinds of challenges. It has
facilitated the exchange of business data in a secure manner and it has produced high-level
architecture for the business (Bell, Gallino and Moreno 2015). The AS2 platform can help
Woolworths in the aspect of flexible data transmission and authentication. It can help
Woolworths in exchanging the purchase order, shipment notice, invoice, payment and that of
the remittance files. The AS2 transaction can take place within the real time that can help in
increasing efficiency pertaining to document exchanges (Christopher 2016). The using of
AS2 protocol can ensure the sustainability of the company in the global competitive
environment.
The choosing of SPS Commerce as the strategic partner can help Woolworths in
remaining sustainable in the market. SPS Commerce is instrumental in providing supply
chain management software that is cloud-based to the retailers, logistic provider and the
partners. SPS Commerce adopts a full service approach in relation to people, process along
with technology that can help a business in running in a more profitable manner. SPS has
helped Woolworths in spending less amount of time in managing systems that can put more
time at the disposal of Woolworths for serving the customer (Varley 2014). SPS Commerce
has helped Woolworths in working successfully and they have been able to replace manual
process with that of automation. Their pioneering cloud-based EDI has helped in re-definition
of the market which was traditionally served with the help of on-premise software provider.
They have replaced it with an innovative system that can help the retailers in manage the
vendor communities (Ramanathan, Subramanian and Parrott 2017).
The digitally-native consumer has been able to transform that of the retail landscape.
The consumers in the present age want more options in relation to products, from where they
buy it and the manner of delivering of a purchase. Retailing has become complex in the
present age and it is important to manage the trading partner relationship in a simple manner
(Agrawal, Singh and Murtaza 2015). SPS Commerce has got expert team that can handle the

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technical details very easily that can greatly benefit Woolworths Supermarket and ensure its
sustainability.
Supply Chain Segmentation has been resorted to by Woolworths that has helped in
segmenting supplier base that can help in ascertaining level of engagement with the specific
suppliers. This can help in providing a company with the right amount of resources that can
help them in managing supplier at the different levels (Jia et al. 2017). The supply chain
segmentation can help the company in collaborating with organization that can help in
delivering unique value to the consumers. Collaboration level has helped in proving the
company with strategic and competitive advantage that can help the company to sustain itself
in the market in the long run. It can facilitate the process pertaining to the sharing of
knowledge that can prove to be crucial for the success of an organisation.
The supplier segmentation has helped Woolworths in deciding the spend threshold in
relation to each segment on the basis of the suppliers (Chen and Guo 2014). It can help
Woolworths in considering the aspect of year to year growth within suppliers spend that can
help in providing insight in future pertaining to supplier engagement level. The product of the
supplier can enhance the experience of the customer and it can prove to be of great use in
increasing the customer base of a company. The supplier segmentation will be able to help
the company in increasing the number of customers (Selvaraju, Beleya and Sundram 2017). It
has increased the organisational efficiency and helped in bringing profit for the organisation.
The precise segmentation has helped the company in identification of key value driver and
selection of the right engagement level that can add to the profit of the organisation.
Recommendations
Woolworths can make use of source tagging solution for improving supply chain
management. In the present age, there is increased awareness in relation to volume of the
merchandise across different channels and source tagging can help in informing inventory
management that can help in making better business decision. The warehouse stock level of
Woolworths should be continuously monitored that can help in replenishing of stocks in the
event of the sensors detecting an out of the stock situation (Varley 2014). The tagged goods
within the warehouse can help in guiding the pickers to that of the exact location. Precise
level pertaining to inventory visibility can help en ensuring that the retailers know regarding
in which stage of the supply chain the products are. Standard like that of Electronic Product
Code can be made use of by Woolworths that can help in enabling Radio Frequency

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Identification that can help the retailers in pinpointing the inventory within real time
(Ramanathan, Subramanian and Parrott 2017). It can help in providing Woolworths with an
efficient way that can help in delivering promise to customer. Woolworths can combine the
RFID-enabled inventory with sophisticated electronic surveillance that can help the retailer in
gaining real time insight into various aspects of the supply chain. Woolworths should align
the supply chain with that of the marketing teams that can prove to be crucial for the success
of Woolworths. The marketing department of Woolworths should be able to alert supply
chain in the event of a big promotion so that the team of supply chain will be able to
determine the amount of product that will be needed and the manner of shipping of a product.
Conclusion
Strategic sourcing can be taken recourse to by an organization that can improve
purchasing activities in relation to a company. The consumers can get various kinds of
choices at the Woolworths supermarket that has helped the company in making a lot of profit.
The B2B integration platform is used by Woolworths that has helped the company in making
real time integration with that of the supplier system. Woolworths has leveraged the AS2
protocol that has helped the company in maintaining communication. This has helped the
company in the arena of automated order fulfilment in between various business by using
internet. AS2 platform is used by Woolworths for the aspect of data transmission. This can
prove to be effective for Woolworth in exchanging of purchase order, invoice and the
remittance files. Woolworths has chosen SPS Commerce in the form of strategic partner that
has assured the sustainability of the company within that of the world market. They have
provided Woolworths with supply chain management software that have greatly helped the
retailer along with other logistic providers. The full service approach made use of by
Woolworths in providing facilities to people and the process can help the organization in
making profits. Woolworths has used the supply chain segmentation for segmenting the
supplier base that can successfully help in the process of engaging with suppliers. This can
put at the disposal of the company large amount of resources that can help in the process of
managing of supplier at various levels.

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References:
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Bell, D., Gallino, S. and Moreno, A., 2015. Showrooms and Information Provision in Omni‐
channel Retail. Production and Operations Management, 24(3), pp.360-362.
Chen, J. and Guo, Z., 2014. Strategic sourcing in the presence of uncertain supply and retail
competition. Production and Operations Management, 23(10), pp.1748-1760.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Hingley, M., Lindgreen, A. and Grant, D.B., 2015. Intermediaries in power-laden retail
supply chains: An opportunity to improve buyer–supplier relationships and
collaboration. Industrial Marketing Management, 50, pp.78-84.
Jia, F., Orzes, G., Sartor, M. and Nassimbeni, G., 2017. Global sourcing strategy and
structure: towards a conceptual framework. International Journal of Operations &
Production Management, 37(7), pp.840-864.
Mangan, J., Lalwani, C. and Lalwani, C.L., 2016. Global logistics and supply chain
management. John Wiley & Sons.
Mena, C. and Bourlakis, M., 2016. Retail logistics special issue. International Journal of
Physical Distribution & Logistics Management, 46(6/7).
Monios, J., 2015. Integrating intermodal transport with logistics: a case study of the UK retail
sector. Transportation Planning and Technology, 38(3), pp.347-374.
Ramanathan, U., Subramanian, N. and Parrott, G., 2017. Role of social media in retail
network operations and marketing to enhance customer satisfaction. International Journal of
Operations & Production Management, 37(1), pp.105-123.
Selvaraju, M., Beleya, P. and Sundram, V.P.K., 2017. Supply chain cost reduction using
mitigation & resilient strategies in the hypermarket retail business. International Journal of
Supply Chain Management, 6(2), pp.116-121.

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Varley, R., 2014. Retail product management: buying and merchandising. Routledge.
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Woolworthsgroup.com.au (2018). Woolworths Group: Quality Brands and Trusted Retailing.
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