Detailed Analysis of Woolworths Supply Chain: Strengths & Weaknesses

This report provides a comprehensive analysis of Woolworths' supply chain, a leading Australian retail chain. It begins with an introduction to supply chain management and its strategic importance in business operations, followed by an overview of Woolworths and its product offerings. The report then divides Woolworths' supply chain into upstream and downstream components, detailing the flow of goods, information, and financial resources. The upstream supply chain involves diverse suppliers, both local and international, while the downstream supply chain focuses on retail outlets and online platforms. The report highlights the strengths of Woolworths' supply chain, including its expansive and intricate network, its contribution to local economic development, and the business opportunities it creates for ancillary firms. However, it also acknowledges weaknesses, such as high costs, environmental and ethical concerns, and quality issues. The analysis emphasizes the importance of supply chain management in retail and its impact on financial performance. The report concludes with a summary of the key findings and insights, providing a holistic view of Woolworths' supply chain and its strategic implications.

Running head: SUPPLY CHAIN OF WOOLWORTHS
SUPPLY CHAIN OF WOOLWORTHS
Name of the Student:
Name of the University:
Author Note:

1SUPPLY CHAIN OF WOOLWORTHS
Table of Contents
Introduction:....................................................................................................................................1
About Woolworths:.........................................................................................................................2
Supply chain of Woolworths:..........................................................................................................2
Upstream supply chain:...............................................................................................................3
Downstream supply chain of Woolworths:.................................................................................4
Strengths of supply chain of Woolworths:......................................................................................6
Expansive and intricate:...............................................................................................................6
Promotes economic development of local population:................................................................6
Provides business opportunities among ancillary firms:.............................................................7
Weaknesses of supply chain of Woolworths:..................................................................................7
Expensive:....................................................................................................................................7
Environmental, ethical and legal issues:......................................................................................8
Quality issues:..............................................................................................................................8
Conclusion:......................................................................................................................................8
References:....................................................................................................................................10

2SUPPLY CHAIN OF WOOLWORTHS
Introduction:
Supply chains are one of the most strategically managed areas of operations in business
organisations. Hugos (2018) defines that term supply chain as ‘the alignment of firms that brings
products and services to the market.’ Heckmann, Comes and Nickel (2015) define the term as the
collection of people, processes and methods which contribute towards movement of raw
materials, finished or work-in-progress goods from suppliers towards business firms and form
business firms to final consumers. They also point out that strong supply chains ensure
continuous flow of inventory towards companies for further processing and from companies to
final consumers. Thus, it is evident from this description that supply chains contribute towards
smooth business operations and generation of revenue. Thus, it is evident that any disruption in
the supply chains sets into action chains of reaction like disruption of manufacturing processes,
marketing of finished products to consumers and generation of revenue. Gelsomino et al.(2016)
point out that supply chains besides involving movement of immense amount of goods, also
involves movement of immense amount of money from companies to suppliers and from
consumers to companies. Thus, supply chains have impacts on the financial performances of the
business organisations as well. This immense importance of supply chains in the business
operations of business organisations has resulted in respective management bodies manage
supply chains very strategically. The aim of the paper would be carrying out a critical analysis of
the supply chain of Woolworths Supermarkets, the largest Australian retail chain. The research
would be initiated by first conducting a research about the retail chain and finally shifting its
focus on its supply chain. The second and third sections would delve into the strengths and
weaknesses of Woolworths respectively. The research would finally sum up the concepts learnt
from the discussion to conclude the study.

3SUPPLY CHAIN OF WOOLWORTHS
About Woolworths:
Woolworths Supermarkets is the leading retail chain in Australia having its headquarters
in New South Wales. The retail chain is a subsidiary of Woolworths Limited which is listed on
the Australian Securities Exchange. The firm operates under the leadership of Brad Banducci in
the position of director, Australian Supermarkets and Petrol. The retail chain employs over a lakh
employees and generated a revenue over A$ 56.726 billion as in 2018. The product line of
Woolworths consists of food products and non-food products. The food products consist of fruit
and vegetables, meat and seafood, bakery, dairy products, pantry, freezer and liquor. The non-
food product line products of the supermarket chain consists of health and beauty products,
household products, baby products and pet products. The official website of Woolworths also
markets financial products like insurance and credit cards. The supermarket also markets
branded mobile phones. The supermarkets in order to encourage customers to purchase more
products from its store offer rewards and gift cards. The place strategy of Woolworths consists of
both its brick and mortar outlets and online platforms. The supermarket chain in order to retain
its existing customers and acquire new customers, provides discounts and offers on its products
which are subject to certain terms and conditions laid down by the management of Woolworths.
It is evident from the discussion of the product line of Woolworths that consists of wide
ranges of food and non-food products. This means that the supermarket chain employs a huge
upstream supply chain to acquire inventory of products from suppliers and intricate downstream
supply chain to sell its goods and services to the end consumers.
Supply chain of Woolworths:
The supply chain of Woolworths can be divided broadly into upstream and downstream
supply chains. The following sections would discuss the supply `chain of Woolworths:

4SUPPLY CHAIN OF WOOLWORTHS
Upstream supply chain:
The upstream supply chain of Woolworths consist of suppliers of different types
operating at varying scales as shown below. This fact can be pointed out from the very product
line of Woolworths. The product line of the supermarket chain consists of food products like
meat and bakery products on one hand and beauty products on the other hand. Thus, it is evident
that the supply chain of the supermarket chain consists of both local farmers and multinational
companies like Unilever. It can further be pointed out from the product line of the supermarket
that it sources products from suppliers located within Australia and abroad (Dominguez et al.,
2018). Thus, it can be pointed out that the upstream supply chain of Woolworths involve use of
transport network both within Australia and overseas. This involvement of large number of
suppliers ensure delivery of right goods at the right time, in right quality and quantity and at
right costs. It can also be pointed out that the movement of immense amount of goods from
suppliers to the stores of the supermarket chain involve integration of immense amount of
strategic business information. The supply chain of Woolworths also involves an immense
amount of financial resources and financial information. Thus, in short of supply chain involves
movement of immense amount goods, information and financial resources. The upstream supply
chain of the supermarket requires support of several ancillary services like logistics, banking and
IT firms (Teller et al., 2016). The management of the supermarket chain under the supervision of
management of its holding company namely, Woolworths Limited has coined strict supplier
codes which the suppliers of the supermarket have to comply with in order to supply goods and
services to it.

5SUPPLY CHAIN OF WOOLWORTHS
Local supplier of
meat, dairy products
tec.
International suppliers
like Unilever
Woolworths
L L
HR Bank
s IT
Figure 1. Upstream supply chain of Woolworths
(Source: Author)
Note for figure 1. L means logistics and warehouses
Downstream supply chain of Woolworths:
The downstream supply chain of Woolworths consist of chains of both brick and mortar
outlets which enable the supermarket to sell its products to the end consumers. The supply chain
of the supermarket downstream has its retail outlets at the centre. The retail chain has outlets all
over Australia which enables end customers to directly purchase products. Woolworths also sells
products to distributors and retailers which purchase goods from its outlets in bulk to ultimate
sell them to end customers. Thus, in short, the downstream supply chains of the company consist
of both end customers and business customers. The supply chain of Woolworths holds evidence
of the technological advancements which the retail chain has embraced (Bearson, Kenney &
Zysman, 2019). The supermarket chain sells products on its official website through an

6SUPPLY CHAIN OF WOOLWORTHS
ecommerce portal attached to it. The customers can view products on the official website and
place orders directly to purchase products on the virtual cart. It can again be pointed out that the
retail chain uses an intricate network of logistics including both transport companies and
warehouses to deliver goods to customers who order online. The downstream supply chain of
Woolworth also consists of immense amount of movement of information technology. It can also
be pointed out that the retail chain encourages customers to provide feedback on their purchase
experience. The retail chain also communicates with the customers on the social media platforms
like Twitter and Facebook. The customers can communicate their feedbacks and expectations
regarding the products of the company (Razak, et al., 2016). The management of the company
integrates these customer feedbacks and expectations in framing its future product strategies.
This it can be pointed out that downstream supply chain of Woolworths consists of movement of
immense amount of market information from customers and the customers into the company.
The management body of Woolworths can integrate this customer information to structure its
product strategies. In other words the downstream supply chain of the supermarket chain is also
characterised by aligning of product strategies with the customer expectations. Thus, it can also
be pointed out that the downstream supply chain of Woolworths consists of marketing is an
important supporting function. It is evident from the description that downstream supply chain of
Woolworth generates of revenue for the supermarket chain. It can thus be pointed out that
downstream supply chain of the supermarket chain involves mobilisation of immense amount of
financial resources from customers, both individual customers and business customers to the
retail company. The retail company generate immense revenue by serving a large base of loyal
customers. Woolworths uses portions of the revenue generated to pay credits to suppliers and
dividends to investors. Thus, it can also be pointed out that downstream supply chain of

7SUPPLY CHAIN OF WOOLWORTHS
Woolworths also enables the business conglomerate to pay its investors high amount of premium
and dividends on their investment which in turn enables the retail chain attract more capital
(Bisignano, Werhane & Ehret, 2017). In other words the downstream supply chain of
Woolworths enables it to attract both revenue and capital, thus attributing it with financial
strength to operate in the retail market which is already very competitive.
Strengths of supply chain of Woolworths:
The following are the strengths of the supply chain of Woolworths:
Expansive and intricate:
The supply chain of Woolworths is expansive and intricate consisting of several suppliers
upstream and distributors downstream. This is because the retail chain markets a wide range of
goods consisting of both local products as well as international suppliers of goods like Unilever.
The supply chains of Woolworths span both within Australia and abroad. This vast supply chain
consisting of large numbers of suppliers enable retail chain to acquire superior quality goods at
economies of scale (Teece & Linden, 2017). This enables the supermarket chain to reduce its
cost of sales which enables it to offer goods to customers at lower prices. Thus, it is evident that
the intricate and expansive supply chain of the retail chain enables it to generate high profits.
Promotes economic development of local population:
Woolworths provides economic development opportunities to local population. This is
because the retail chain acquires product like organic meat and liquor from the local producers. It
can be pointed out that organic products are more expensive compared to the inorganic products.
It can be pointed out in this regard that Woolworths can earn higher revenue by selling organic
products compared to their inorganic counterparts (Porter & Kramer, 2019. In other words it can

8SUPPLY CHAIN OF WOOLWORTHS
be inferred that organic products enjoy higher demand among consumers compared to their
inorganic counterparts. This means that the retail chain acquires organic products from local
producers on regular basis which provides the latter to generate high profits. Thus, in other
words Woolworths pave ways for economic development among local suppliers. It can also be
pointed out that the retail chain enables economic development in the towns and rural areas in
which these suppliers reside.
Provides business opportunities among ancillary firms:
The supply chain of Woolworths provides business opportunities to ancillary firms which
serves it both upstream and downstream. It can be pointed out that upstream, the company takes
services from warehouses and logistics to acquire products. Similarly, the company takes
services of banks and online payment making companies to receive payments from customers
(Crane et al., 2018). Thus, it is evident that these third party firms are creditors to the retail chain.
In order words, the supply chain of Woolworths, both upstream and downstream enable the
several third party companies to generate revenue.
Weaknesses of supply chain of Woolworths:
The following are the main weaknesses of supply chains of Woolworths both upstream
and downstream:
Expensive:
The maintenance of the intricate supply chains attracts immense expenditure for the retail
chains. It can be pointed out that all the suppliers of the company do not provide similar quality
of goods. When the company fails to detect these quality issues caused by some of the suppliers,
it has to bear expenses to compensate customers which are affected by the inferior quality

9SUPPLY CHAIN OF WOOLWORTHS
products. It can also be pointed out that the company requires to incur immense expenses to
maintain an intricate chain of warehouse and logistics partners to transport products from
suppliers to its stores (Ho et al., 2015). Thus, it is evident that the supply chain of the retail chain
attracts immense costs.
Environmental, ethical and legal issues:
The second weakness of the supply chains of Woolworths is environmental issues. This is
because some of the suppliers and logistics companies serving the retail chain do not operate in
sustainable ways and cause environmental damage. Some of the suppliers of the retail chains
have also been known to have indulged in illegal operations like using forced labour. Obtaining
goods from these suppliers hampers the goodwill of the retail chain.
Quality issues:
The third disadvantage with the suppliers of Woolworths is quality issues which it faces
from its customers. The supply chain of the retail chain is so vast that it is not able to control all
the suppliers and their products stringently. This often gives scope to suppliers supply poor
quality products to the stock of goods of the retail. These poor quality goods attract quality issues
from customers (Fahimnia, Sarkis & Davarzani, 2015). Thus it is evident that the immense
supply chain of Woolworths hinders proper administration which ultimately attract quality
issues.
Conclusion:
It is evident that the supply chain holds a very important position in the business of
Woolworths. The supply chain is responsible for the business generation as well as capital
generation of the retail chain. The supply chain is also responsible for bringing about economic

10SUPPLY CHAIN OF WOOLWORTHS
development among the local communities. It can also also be pointed out that the ancillary firms
also generate revenue by serving the supply chain of Woolworths. However, it can also be
pointed out that the supply chain of Woolworths suffers from several issues due to its vast size.

11SUPPLY CHAIN OF WOOLWORTHS
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