Analysis of Operations Management at Woolworths Supermarket Chain

This report provides a detailed analysis of operations management within Woolworths, a prominent Australian supermarket chain. It examines the company's core business purpose of providing high-quality products at affordable prices, and its operational strategies including cost control, waste reduction, and differentiation. The report highlights the significance of effective governance of business processes and the role of operation management in strengthening business performance, customer loyalty, and internal processes. It explores the application of Hayes and Wheelwright’s four-stage model, detailing Woolworths' progress through stages of internal and external neutrality, and support. Furthermore, the report assesses Woolworths' performance objectives, including product quality, speed, dependability, flexibility, and cost management, emphasizing the importance of process technology strategy in maintaining a competitive edge within the supermarket industry. The conclusion underscores the critical role of operations management in aligning business functions for timely, cost-effective operations, and sustained market stability.

Running head: OPERATIONS MANAGEMENT
Operations Management
Name of the student:
Name of the university:
Author note:

2OPERATIONS MANAGEMENT
Introduction:
Operation management is the process of administering all the business function
properly and thereby build extreme level of efficiency throughout the organisation. Present
essay would put forth the discussion of operation management in the context of Woolworths-
famous supermarket chain of Australia. The role, played by operation management to
strengthen the business performance of Woolworths will be discussed in the paper.
Woolworths is one of the famous supermarket grocery chains of Australia, operating
more than 900 stores throughout the country. Being the most innovative retailer, Woolworths
puts extreme stress on acknowledging the requirements of the customers and act accordingly
in order to keep them delighted (Kiehtreiber, et al. 2018). As one of the most trusted and
celebrated brands of Australia, Woolworths is always committed towards providing the
customers, with connected, personalised and convenient shopping experience
(Woolworthsgroup.com.au. 2019). Therefore, effective operation management strategy is
being followed by Woolworths. Controlling excessive cost of operation is the fundamental
operational aim of Woolworths. The company’s core business purpose is to let the customers
avail high quality of product at very affordable price. Minimising the rate of wastage material
is one of the major operational strategy, followed by Woolworths. This is the way, through
which the company is cutting excessive cost of operation and thereby strengthen their
financial base, which is the key of attaining competitive advantage.
Effective governance of business process is the major significance of operation
management, enjoyed by Woolworths. It is imperative note in this context that,
differentiating themselves from the crucial competitors is the major operational strategy,
followed by Woolworths. The company puts consistent stress on differentiating their
products, which is playing a pivotal role for the company to provide the customers with
unique shopping experience (Ansoff et al. 2018). In addition, the inclusion of effective
2

3OPERATIONS MANAGEMENT
operation management strategy is making it easy for the supermarket giants like Australia to
provide high quality of service to the customers, which is the key of building and maintaining
healthy relationship with the customers.
Being the giant in the supermarket industry, Woolworths is showing utmost
commitment to generate loyalty among the customers. Implementation of robust operation
management strategy is making it easy for Woolworths to accelerate the internal process of
their business, which is very much needed in terms of strengthening their capability to offer
the customers with unique shopping experience. Conduction of comprehensive training
session is a vital operation strategy, followed by Woolworths. Through this way, the
company is accelerating the degree of productivity mong the employees, which is very much
needed for responding to the needs and requirements of the customers (Steiss 2019).
Appropriate governance is another major operation management strategy, followed by
Woolworths in order to strengthen the value of their business and thereby accelerate the
underlying value of the asset in the organisation. According to Hayes and Wheelwright’s four
stage model, operation management contributes a lot towards attaining long term success
from business. As per this model, every organisation should have a clear vision statement and
the operational strategy must be aligned with that of the vision (Höglund et al. 2018).
Through this way, the organisations can explore the way, through which the organisational
objectives can be accomplished. There are four stages of this model, which are as follows:
3

4OPERATIONS MANAGEMENT
Figure 1: Hayes and Wheelwright’s model of operation management
(Source: Holloway 2018)
Stage 1- Internal neutrality: This stage deals with the fact that the inwards functions acts
as a best reactive, which has very little still positive contribution on attaining competitive
advantage. One of the most significant advantages of this stage is that, it supports the firms to
connect the worst problem and thus lead the company to implement robust business strategy
to respond to the issue. Initially, maintaining the quality of product was a major issue, which
has been resolved by Woolworths by conducting training session.
Stage 2- External neutrality: In this stage, the companies measure their performance
against the crucial competitors. Through this way, the companies can adapt effective business
strategy and thereby stay aside from the competitors. To respond towards the competition,
Woolworth is consistent deploying effective process improvement methodology.
Stage 3- Internally supportive: In this stage, the companies state their strategic goal
develop effective operational resources in terms of accomplishing the predetermined goal.
This is the way of developing internally supportive resources and thus explore the area,
where the company needs improvement.
4

5OPERATIONS MANAGEMENT
Stage 4- Externally supportive: This is the last stage of Hayes and Wheelwright’s model
of operation management, which the fundamental vision of operational function plays a
major role in providing the basis of attaining competitive advantage.
Being the giant in the supermarket chain of Australia, Woolworths is highly
committed towards accelerating their internal functionality to attain long term success from
business. There are different performance objective, which has been accomplished by the
company by implementing operation management strategy. Producing high quality of
products is the major performance objective, set by the company. In order to accomplish the
objective, Woolworths is focusing on enhancing their loyalty propositions. Being one of the
famous grocery retailers in Australia, Woolworths is taking consistent care on improving
their internal process and thereby satisfying the thrust among the customers for high quality
of products. The fundamental aim of the company is to produce high quality of products. In
order to satisfy this aim, quality assurance program has been launched by Woolworths. This
is acting as a major bench mark for the company (The Australian Food Industry - Retail
Sector: Woolworths. 2019). Integrating speed in the business is the key to performance
objective of Woolworths, through which they are promoting consistent growth in business.
Investment towards online shopping is the major step, taken by Woolworths in order to
ensure speed in their business. Online portal and provision of home delivery have been
launched by Woolworths in order to attract wide range of customer.
Ensuring dependability in the business is another major objective of Woolworths.
Dependability states that, the workers possess excellent quality, which is the key of
improving internal functionality of a firm. Customers are the key priority of the company.
Healthy relationship among the employees is the major aspect of Woolworths, through which
the company is ensuring the fact that, all the staffs are working properly to keep the
customers happy. Integrating flexibility is another vital performance objective of
5

6OPERATIONS MANAGEMENT
Woolworths. Employee communication is the major aspect of the internal functionality of
Woolworths. Recently, the company has launched Noggin in order to maintain healthy
communication among the customers and thus ensure collaborative working environment.
Maintaining cost is also a critical performance objective of Woolworths. This is the way of
strengthening the financial base. Offering high quality of in considerable price is the vital
aspect of Woolworths. Through this method, Woolworths is becoming able to strengthen
their rate of profit margin and thereby run their business in a cost effective manner.
It is true that, the company utmost care towards running their business in
accordance with the performance objectives. Multiple performance objectives have been
developed by the company and it has been observe that the company is putting consistent
stress on accomplishing the same. However, as the degree of uncertainty is extreme high in
the supermarket sector of Australia, it is imperative for Woolworths to execute process
technology strategy. This is a process oriented approach, which will serve the company with
the ability to enhance their current operation, which is the key of promoting future
development. It has been observed that, quality of product is a major issue of them, which is
resulting in dissatisfaction among the customers. Thus, implementation of process technology
strategy will help them to accelerate the capability of their internal process as well as the
production procedure (Teece 2019). This is the way, through which Woolworths can ensure
availability of high quality of products, which can satisfy the requirements of customers.
Conclusion:
In the intense competitive functionality of a firm is the key of maintaining stability in
the business process and thereby gain a significant position in the market. There lies th3e
significance of operation management, which serves the firms with the capability to align
their business function, which is the key of running business in a timely and cost effective
manner.
6

7OPERATIONS MANAGEMENT
7

8OPERATIONS MANAGEMENT
Reference
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018.
Implanting strategic management. Springer.
Höglund, L., Holmgren Caicedo, M., Mårtensson, M. and Svärdsten, F., 2018. Strategic
management in the public sector: how tools enable and constrain strategy making.
International Public Management Journal, 21(5), pp.822-849.
Holloway, S., 2018. Changing planes: A strategic management perspective on an
industry in transition. Routledge.
Kiehtreiber, P., Vidrine, J.A., Linn, C.S., Saldinger, R.D. and Thomas, B.J., Apple Inc,
2018. Centralized operation management. CRC Press.
Slack, N. and Brandon-Jones, A., 2018. Operations and process management: principles
and practice for strategic impact. Pearson.
Steiss, A.W., 2019. Strategic management for public and nonprofit organizations.
Routledge.
Teece, D.J., 2019. A capability theory of the firm: an economics and (strategic)
management perspective. New Zealand Economic Papers, 53(1), pp.1-43.
The Australian Food Industry - Retail Sector: Woolworths. (2019). Quality Assurance.
[online] Available at: https://retailsector-woolworths.weebly.com/quality-assurance.html
[Accessed 15 Jul. 2019].
Woolworthsgroup.com.au. (2019). Our Businesses - Woolworths Group. [online]
Available at: https://www.woolworthsgroup.com.au/page/about-us/our-brands/ [Accessed
9 Jul. 2019].
Woolworthsholdings.co.za. (2019). Our Strategy – Woolworths Holdings Limited.
[online] Available at: https://www.woolworthsholdings.co.za/overview/our-strategy/
[Accessed 9 Jul. 2019].
8