Operations Management Report: Woolworths Strategic Resource Analysis

This report provides a comprehensive analysis of Woolworths' operations management, focusing on its strategic resources and the application of Porter's value chain. It examines the company's 24-hour cycle, store design, customer service functions, and inventory management. The report delves into the primary activities, including inbound logistics, which highlights the company's distribution network, and operations, emphasizing quality assessment and inventory management using advanced prediction methods. Outbound logistics, marketing and sales strategies, and customer service are also discussed, demonstrating Woolworths' approach to in-store promotions and organizational dynamism. The support activities, such as firm infrastructure and procurement, are explored, highlighting the company's investment in store renewals and procurement of products. The report concludes by emphasizing the importance of human resource management in supporting the company's overall operations and success.

Managing Strategic resources & operations
8/30/2019
Woolworths Company

Operations 1
Contents
Introduction................................................................................................................................2
Overview of company............................................................................................................2
Typical 24-hour cycle................................................................................................................3
Porter’s value chain of Woolworths...........................................................................................4
Primary activity......................................................................................................................5
Inbound logistics................................................................................................................5
Operations..........................................................................................................................5
Outbound logistics.............................................................................................................6
Marketing and sales............................................................................................................7
Services..............................................................................................................................7
Support activities....................................................................................................................9
Firm infrastructure.............................................................................................................9
Procurement.......................................................................................................................9
Human resource management..........................................................................................10
Technology development.................................................................................................10
Sustainability of Woolworths...................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

Operations 2
Introduction
In the dynamic environment, the operations management is an extent of administration that
are linked with the designing and controlling the process majorly for manufacture as well as
reshaping processes of corporate in manufacturing products as well as services. The aim of
the report is to assess the operations of the Woolworths Company with help of Porter’s value
chain as well as its integration between the logistics, operations, outbound logistics and final
users. The framework of porter’s value chain majorly focuses on the activities as well as
system with the clients. This value chain is considered as set of activities of Woolworths
Australian supermarket/grocery store chain industry to deliver valuable goods for market.
Overview of company
Woolworth’s supermarket is well known Australian supermarket as well as grocery store
chain which are owned by Woolworth’s group which came into the existence in the year
1924. The company is specialist in dealing with the selling of groceries but also to sells
magazines and other products. The company is picked by most of the Australians for their
food shopping with 14 million every week. The company provide the fresh products which
are choicest home grown meat with finest quality for entire budgets. The company operations
are the key towards the success and achieving the goals and objectives. It has been found that
company currently has more than 1000 stores in Australia out of which 976 are supermarket
and additional 19 are Metro convenience stores (Woolworths Group, 2019). The company
also offer their products through the online mode which is known as “HomeShop” as a click
and collect and home shopping delivery service.

Operations 3
Typical 24-hour cycle
The day to day operations that take place in the Woolworths are comprised of store design
everyday jobs, client service functions, money, fraud, and interior control functions, product
inventory responsibilities, and retail management accountabilities.
Store design responsibilities – This segment of the operations of the company is considered
to be very important for the better customer experience. Design is considered to be science
and art, often used to help in making better choices. This element includes activities like store
location, store design and layout, creating departments in the store, display and visual
merchandising, atmosphere, and store space management (Woolworths, 2019).
Customer Service Function – Major of the success of the store is based on the customer
service which reflects how a business treats its customers. There is always possibility that
customer is wrong, but they are the customer who represents the potential review and sale.
Cash, Fraud, and Internal Control Functions – Retail stores of Woolworths have to
determine, execute, and monitor these segments of their processes because they have direct
influence on the bottom line. Some of the areas need to be managed are managing cash and
credit, fraud and shoplifting prevention, internal controls, and security and safety.
Product Inventory Responsibilities – In order to succeed in the retail segment, Woolworths
maintain its stock and inventory to satisfy the needs of its target audience. Supermarkets of
the company exert their maximum efforts for balancing the supply and demand. Some of the
elements that are given major priority in the business are ordering merchandise, receiving
stock, utilizing inventory system, merchandise handling, and pricing (Woolworths, 2019).
Retail Administration Responsibilities – This function of the business lie under
administration and some of the elements of this segment are employees training, use of

Operations 4
technology for the data management, managing premises, and managing promotions and
events in the business (Woolworths, 2019).
Porter’s value chain of Woolworths
Porter’s value chain analysis includes the different number of activities which consists of the
primary as well as the support activities. In porter’s value chain, the primary activities leads
to the direct influence on the production, sales, maintenance support of the products
(Chernev, 2018). Further, it includes the secondary activities which include the infrastructure
of company, human resource management, technology and procurement. Woolworth’s value
chain analysis is given below which shows the work that is performed by company.
The company follows the porter’s value chain with the motive to meet their obligations
towards the customers available in the market. The mission statement of the company is to
present how the company strives to offer the consumer with freshest produce as well as
enjoyable with convenient experience of clients (David & David, 2013). It has been found
that all the value leads to the activities of the company to geared for the delivering all the
promises.

Operations 5
(Source: Hitt, Ireland & Hoskisson, 2012)
Primary activity
Inbound logistics
In this step of the value chain, the company’s source raw material that can contribute in
enhancing the quality as well as making the optimum utilization of cost (Hutt & Speh, 2012).
Woolworths Company is considered as one of the vital retailer due to which it doesn’t
manufacture the products but sells them in market. It controls the distribution network
majorly for the products. The company has approximately 3,000 distribution centres who
contribute in making the easy availability of resources. It has been witnessed that for the
distribution centres that are 85% of the male and remaining 15% are female because most of
male prefer the field work (Woolworths Group, 2019).
Operations
The operations is considered as one of the activity in which the raw material get converted
into the finished goods which is job performed by the company to meet the growing needs of
customers (Kotler, Keller, Ang, Tan & Leong, 2018). Woolworths performs the value chain
activity which helps them to ensure that client, convenience and value is possible with two
activities that are Quality assessment as well as management of inventory.
 Quality assessment: - In quality assessment, company ensure that they follow the
standardised procedure with the motive to detect as well as to eliminate the detective
products (Heizer, Render, & Munson, 2017).
 Inventory management: - Woolworths Company needs to manage inventory
management in which they use P.O.S. and EDI technology to safeguard adequate
standard levels at overall times. The company uses the advanced predicting methods
with the motive to pre-empt any unexpected increase or decrease in terms of demand

Operations 6
of products (Woolworths Group, 2019). The company make use of updated prediction
database to predict future fluctuations in demand because of environmental issues like
seasonal changes or economic trends.
Outbound logistics
The porter’s value chain shows that the outbound logistics include sending of final products
from manufacturing to distributors as well as retailers present in business (Mudie & Pirrie,
2012). Woolworths Company makes products available to their final customers with help of
their supermarket stores which makes it convenient for customers to purchase the product
available in market. In addition to this, the annual report of the year 2017 presents that
company supported the detailed plans for opening new stores which is considered as major
operations of company. Woolworths Company decided to open 3 supermarkets, 12 endeavour
drinks, 1 big W and many others which are given below in the image (Woolworths Group,
2019).
(Source: Woolworths Group, 2019)

Operations 7
This shows that the short-term and medium-term target of Woolworths with the motive to
expand its business operations and to meet the needs of customers.
Marketing and sales
The marketing and sales implement the push and the pull approach that contribute in
enhancing sales of product. The business already occurs to make revenue and rise in revenue
is possible with effective marketing and sales of products (Wilson & Gilligan, 2012). The
company makes use of different marketing and sales activities which contribute in improving
the profit. Woolworths has hit out off its novel price founded marketing campaign with the
motive to strengthen its $500 million investment into the lesser grocery values (Mitchell,
2015). The new campaign of the company will track in print, online, radio and television
which focus on the regular value in the company supermarkets instead of one that are on
discounts. The two operations which are considering by company for marketing and sales
activity are: -
 In store promotions: - Woolworth’s company follow the strategy of the in-store
promotion which is a major part of their operations. In this strategy, they offer the
weekly specials on some specific goods that get combines with the sales catalogues to
accomplish the short-term improvement in revenue (Woolworths Group, 2019).
 Organisational dynamism: - In this operational activity, the company makes the
continual investment for the purpose of research as well as remaining aware to
changes in terms of environmental with the motive to adapt the diverse policies to
contest successfully in near future (Woolworths Group, 2019).
Services
This element of the porter’s value chain include the post sales services which is essential as it
is linked directly and can influence the word of mouth publicity of the products offered by

Operations 8
Woolworths. Woolworths company ensure that they are able to deliver to heavy goods to the
products which remains important for resolving the issues of customers that generally occur
after making the purchase of products (Ayers & Odegaard, 2017). In addition to this, the
customer survey has been conducted which shows the satisfaction level. In the 2017 annual
report, this is clearly mentioned that the customer’s transaction has increased by 5.2% in the
market. The services are offered to the customers who made approx. 78% satisfied in June
2017.
(Source: Woolworths Group, 2017)
It has been found that Woolworths has their customer satisfaction measure which is possible
through voice of customer (VOC) program (Woolworths Group, 2017). The program can be
run by the outside provider and reviews more than thousand clients on monthly basis based
on seven key store-controllable actions. These stores are capable to see quick client reaction

Operations 9
which shows the voice of customer and accordingly they take steps to bring the changes in
their strategy.
Support activities
Firm infrastructure
The firm infrastructure is one of the essential support activities of the porter’s value chain of
company that allows the companies to maintain its day-to-day obligations. It has been found
that line management, handling of administrative are major activities that form the value for
company (Mahadevan, 2015). The store renewal program is introduced by Woolworths
Company which leads to improvement in infrastructure of stores that supports the service
activity of company. The store renewal program is considered as key focus for the company
in the year 2017 with the sum of 72 renewal stores. In addition, the company opened the six
Woolworths Metro stores during year with store suitable that offers providing a sales
progress of 17% (Woolworths Group, 2017). It has been found in the research that approx.
269 stores of the company upgraded with the Hybrid or HFC free refrigerant systems. In
order to support the services which are a primary activity, company has introduced BWS
click and collect which enhance the convenience offer to clients through the trailing fast
delivery in approx. 50 stores.
Procurement
The procurement is one of the major activities that help company to meet the primary
activities by accumulating the products and services that remain in high demand. The
procurement chief at Woolworths Yogan Naidu has a passion majorly for revolution,
equivalence, occupation creation in area of South Africa (Venktess, 2017). The procurement
activity is performed by Woolworths for their food products, drinks, discount merchandise
and many others. The procurement of the products supports the activity of inbound and

Operations 10
outbound logistics which is highly depended on the products which are sourced by the
company for carrying out the operations.
Human resource management
The element of human resource management involves all the related activities such as
recruitment, hiring, developing, compensating and many others. Woolworths company gives
value to their employees as they are the one who supports the company in performing the
work. Woolworths Company analyse the human resources management by analysing the
different aspects of HR that consist of recruitment, selection, training, rewarding and many
others. In the year 2017, it has been found that the organisation is able to maintain more than
202,000 employees. This involves approx. 77,000 employees who are young people who can
contribute in the improvement as well as success of business (Woolworths Group, 2017). The
company is committed to the Employment programs which include “Resourcing the Future”
in partnership with the diversity dimensions.
Technology development
The development in the technology also supports the working of Woolworths as this
contributes in growth of business. The company uses expertise as well as experience in
adopting the new technologies or implementing new technology projects, digital disruption,
usage of information and data analytics (Haksever & Render, 2017). At time when inventory
reaches at store of Woolworth goods are put on presentation, regular payments that are
majorly made with the motive to identify and eliminate defective products. In addition, every
SKU there is a minimum presentation level (M.P.L). The sophisticated point of sale (POS)
technology contribute for the company to keep the track of sum of SKUs traded for the
certain product and once stock levels that fall beneath M.P.L which is a re-stocking order that
is dispatched to the relevant distribution centre (Woolworths Group, 2019).

Operations 11
Sustainability of Woolworths
Woolworths Company follows the sustainability practice related to their operations which
leads to management. The company has the strategic focus points which drive the entire
group level and makes the future operations fit as well as this leads to the long term profit
development and maintain a sustainable value for entire stakeholders.
 Build stronger: - Woolworths Company can make profitable relationships of their
customers which involve the customer data drive as well as inform all the business
decisions to customers. Woolworths enhance loyalty proposition as well as offer the
customers with the linked retail experience which lead to sustainable relationship
(Kumar & Rajeev, 2016).
 Connected Retail: - Woolworths company has their connected retail in which they
emphasis on offering the customers with the inspiring, engaging as well as linked
digital and in-store journey which provide the help to staff for offering the consistent,
brand-aligned, client experience that connect the clients seamlessly from different
physical supplies to the social stages for maintaining the sustainable retail.
 MetricStream's Sustainability Performance Management Solution: - Company
implement the MetricStream's Sustainability Performance Management with the
motive to get and measure sustainability pointers as well as metrics for the energy,
water, soil, waste management. This makes business to monitor supplier agreement
with sustainability procedures and makes operation management sustainable
(MetricStream, 2014).
 Total quality management: - In the Woolworths supply chain; there is effective
utilization of the total quality management tool by the company that provides the
solution for maintaining the sustainable quality for the products.