Analysis of Supply Chain Management at Woolworths Group (Report)

This report provides a comprehensive analysis of the supply chain management (SCM) of Woolworths Group, a major retail organization in Australia. The report defines SCM and its importance in the retail sector, detailing its role in sourcing raw materials, manufacturing goods, and delivering products to consumers efficiently. It explores the key components of SCM, including planning, sourcing, making, delivering, returning, and enabling, highlighting their significance for business operations. The report also outlines the supply chain process, breaking it down into five stages: plan, develop (source), make, deliver, and return. Furthermore, it examines the application of various SCM theories, such as Total Quality Management (TQM) and Six Sigma, to enhance product and service quality, improve customer satisfaction, and optimize business processes. The report emphasizes the principles of TQM, including customer focus, employee involvement, process-centered approaches, and effective communication. Additionally, it discusses the benefits of Six Sigma in improving order fulfillment, reducing cycle times, increasing supply chain flexibility, and minimizing errors. The analysis aims to provide insights into how Woolworths can leverage these strategies to achieve its organizational goals and maintain a competitive advantage in the market.

Operations and Supply
Chain Management
1

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Supply Chain Management..........................................................................................................3
Components of Supply Chain Management................................................................................3
Supply Chain Process..................................................................................................................4
Theory of Supply Chain Management.........................................................................................6
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
2

INTRODUCTION
Supply Chain Management (SCM) is defined as procedure as well as activity of sourcing
raw materials or elements which are needed by enterprise in order to produce goods and services
along with delivering products to consumers in an effective manner (What is supply chain
management (SCM)? Mastering logistics end to end, 2020). Main aim of SCM software is
improving supply chain performance in appropriate manner. This helps manufacturer to make
product on timely basis and supplying information to consumers. The organisation chosen for
given assignment is Woolworths Group which was founded in 1924 headquarter at New South
Wales, Australia. It is retail organisation dealing in different divisions such as supermarkets,
liquor, finance and hotel & gambling. This is regarded as largest business in Australia in terms of
revenue. The main aim of report is to discuss about supply chain process of respective
organisation and using different theory such as total quality management, customer relationship
management. In addition to this, it also covers just in time, Six Sigma that should be used by
business in appropriate manner.
MAIN BODY
Supply Chain Management
It is the defined as management of flow of products as well as services that include
different process which transfer raw materials into finished or final goods (Adebanjo,
Laosirihongthong and Samaranayake, 2016). This includes activities of supply side to enhance
consumer value as well as achievement of competitive advantages at marketplace. Woolworths
has to effectively use SCM in their business to attain goal and objectives in an effective manner.
It is retail sector that manufacture various types of products and supply for their consumers to
fulfil their need and demand in appropriate manner.
Components of Supply Chain Management
It is very important for business to analyse components which are essential for
manufacturing products and services (Kache and Seuring, 2017). There are six main components
of SCM which includes following:
Planning- This is defined as way in which business has to manage as well as plan all types
of resources in order to meet need and demand of consumer for goods and services. They have to
design supply chain along with determine metrics in order to ensure about supply chain to be
3

efficient, effective and delivering value to consumers. Respective organisation has to plan all
resources for manufacturing high quality products and services for positive outcomes.
Sourcing- Companies has to choose suppliers in order to provide products and service for
creating product (Ataseven and Nair, 2017). Woolworths has to ensure sourcing in terms of
receiving, supplier payments, ordering, managing inventory to get time raw materials for
suppliers. It is also important to maintain relationship with suppliers for positive outcomes.
Making- Supply chain manager has to coordinate each and every activity in order to
accept raw materials, testing quality, manufacturing product, packing for shipping and
scheduling for delivery. In context of retail industry, they have to carry out all activities in
positive manner. They have to measure quality, productivity of workers, production output for
creating product and meeting quality standards.
Delivering- It is the components in which Woolworths has to deliver products and services
to consumers in most effective manner (Lamba and Singh, 2017). They have to coordinate
consumer orders, dispatching loads, scheduling delivery, receiving payments, invoicing
consumers. This assists consumers to get goods on timely and leads to create brand value and
goodwill of business.
Returning- This is important component of SCM where suppliers possess flexible as well
as responsive network in order to track back excess, defective and unwanted products. If
Woolworths has received defective products then it should be scrapped as well as reworked. In
case goods is unwanted or excess in quantity then it should be returned to warehouse for sale.
Enabling- For better operation of activities and functions of business, supply requires
different support process in order to monitor information at SC and complying with regulations.
Woolworths has to perform different process in terms of human resource, IT, portfolio
management, sales, finance, product design and quality assurance.
Supply Chain Process
Supply chain management is defined as process which is used by companies in order to
ensure about supply chain to be cost effective as well as efficient. This is regarded as collection
of steps or stages which is taken by company in order to transform materials into finished goods
(Supply Chain Management – Process, 2020). There are five stages of supply chain process
which are described below:
4

Figure 1: Supply Chain Management – Process, 2020
(Source: Supply Chain Management- Process, 2020)
Plan- It is defined as initial stage of supply chain which is called planning phase (Bendoly,
2016). This is very important for Woolworths to plan or develop strategy to address about how
goods as well as services will satisfy need and demand of consumers. It is essential to design
strategy which provides maximum profits or gains. In order to manage resources, strategy should
be designed by business for their goods and services. SCM has to focus on planning as well as
developing collection of metrics.
Develop (Source) - This is regarded as second stage after planning in which there should
be sourcing and developing should be performed (Meredith and Shafer, 2019). In this step,
Woolworths has to maintain as well as build relationship with suppliers of materials for
production. This includes suppliers along with planning methods for deliver, shopping and
payment of product. Respective organisation need to choose suppliers in order to deliver
products and services for developing high quality products. Supply chain manager has to set
price, payment method, delivery to suppliers and creating metrics in order to improve as well as
control relationships. Therefore, it is important for suppliers to combine all processes to handle
products and service inventory.
Make- This is the third stage in process of supply chain in order to manufacture or make
goods which are demanded by end consumers (Brandenburg and Rebs, 2015). Woolworths has
to design, produce, test, package and synchronised delivery of products and services in an
5

effective manner. Supply chain manager has to schedule each and every activity that is required
at time of manufacturing, packaging, testing and preparation for delivery. Such stage is regarded
as important stage where they have to maintain quality level, employee productivity and
production outputs.
Deliver- In this stage, products are delivered to consumers at set location with help of
supplier (Dubey and et. al., 2017). This is also called logistic phase where order of consumers are
accepted as well as delivery of products and services are done. Woolworths has effective
delivery system from order receipt of consumers, establishing warehouse network, delivering
goods to final users along with setting up invoice system to receive payments.
Return- It is regarded as last as well as final stage of supply chain process in which items
received are return to business. Respective organisation returns defective as well as damaged
products to supplier through consumers. It is responsibility of Woolworths to deal with queries
of consumers along with responding to complaints in an effective and efficient manner. Such
stage is regarded as problematic section of supply chain for several businesses. Supply chain
planner has to discover flexible as well as responsive network in order to accept damaged and
defective products from users and returning to suppliers in positive manner.
Theory of Supply Chain Management
There are different theories of supply chain management which are used by retail industry in
order to achieve goal and objectives in an effective and efficient manner. In context of
Woolworth, it uses total quality management in their business to make continuous improvement
in products and services for attainment of positive outcomes. Such theory will lead to generate
high profit margin and maximize productivity. With the application of theory, Woolworths can
attain set outcomes. Some of them are described below:
Total Quality Management
It is defined as consumer oriented procedure as well as aims for doing continuous
improvement of business activities and operations. This is the way of detecting, eliminating,
reducing errors in supply chain management, manufacturing, enhancement of consumer
experience and providing training and development to employees (TQM – Total Quality
Management – Definition, Principles & Importance, 2020). Such theory has to be adopted by
Woolworths for continuous improvement of their functions and activities of organisation. Main
principle of TQM is for management, employee empowerment, continuous improvement and
6

customer focus. This will assist Woolworths to increase awareness of quality culture and
commitment towards continuous improvement. In order to implement TQM successfully, there
are some requirements such as commitment, continuous improvement, control, customer focus,
culture. With use of TQM in business, respective organisation provides consumer satisfaction,
improving quality of product and services and so on.
There are different principles of total quality management which has to be adopted by
Woolworths for attainment of positive outcomes.
Focus on Customer- This principle assist respective organisation to focus on customer to
provide high quality products and services in an effective and efficient manner (Gao and You,
2015). It leads to improve process, measure consumer satisfaction and contribute towards better
results.
Employee Involvement- Woolworths has to include their employees in decision making
of business. As employee involvement in product development leads to generate high quality of
products and services. The positive culture should be created so that employee works to raise
productivity as well as profitability of business.
Process Centred- The process handling and process thinking are regarded as
fundamental part of total quality management (Total Quality Management (TQM), 2020). Such
processes are regarded as guiding principles and individual of respective organisation support
procedure which are linked to mission, strategy and vision.
Communication- This is the most important principle of TQM where people working in
an organisation has to communicate with each and every individuals in an effective manner for
attainment of goal and objectives. Such strategy has to be formulated in different way in line
with vision, mission and objectives of organisation. Respective organisation has to communicate
with help of proper channel so that they can attain set or desired results.
Apart from the above theory, other approaches are as also used which are described
below:
Six Sigma
Six sigma in supply chain management is defined as process to improve quality of
outputs through identification as well as removing causes of defects along with minimizing
variability in both business and manufacturing processes. This helps in enhancement of supply
chain in different areas such as:
7

Figure 2: Six Sigma, 2020
(Source: Six Sigma, 2020)
Perfect Order Fulfilment- With the adoption of six sigma, there is proper fulfilment of
orders in order to meet delivery performance with accurate as well as complete documentation
with bearing delivery damage. Respective organisation has to adopt method of six sigma for
maximisation of order along with fulfilling it in most effective manner.
Reducing Order Fulfilment Cycle Time- This approach will help in review of
organisation’s order fulfilment system which leads to identify problems that has to be addressed
(Genovese and et. al., 2017). Review helps in concluding improvement in proper order and
systematic manner. Woolworth can make improvement in automated picking, system integration,
automated shipping planning, and shipment and so on. Six sigma assist in improving various
processes by using DMADV to implement new processes.
Increase Supply Chain Flexibility- Supply chain management requires instant response
in order to change supply as well as demand with ups and downs of firm cycle (Nguyen and et.
al., 2018). It is very important for Woolworth to implement Critical To Quality (CTQ) for
meeting need and demand of consumers so that they can build customer focus as well as
maintaining flexibility in supply chains.
8

Zero Errors- Supply chain loses efficiency due to high error rate in system. Woolworth
uses Poka Yoke or Mistake Proofing in order to prevent mistakes by using one way for
performing tasks in best manner.
Implementing 5S Lean Method- Under six sigma approach, there is implementation and
use of 5S method such as sort out, shine, sustain, standardise, set in order for reducing errors
which interrupt supply chain in order to provide clean, efficient and safe environment (Hazen
and et. al., 2018). The respective organisation has to use such method for removing errors and
achievement of positive outcomes.
Zero Waste- Six sigma was created to enhance quality of products and services. This
assist above organisation in better functioning of activities and operations by targeting and
eliminating non value added processing with following:
 Overproduction- When there is high demand and maximum production then it is called
overproduction (Qi and et. al., 2017). This resulted in high inventory cost for business.
 Transportation- With help of such processing, respective organisation has to use
transportation in order to deliver products and service in an efficient and efficient
manner.
 Non- Value Added Processing- The poor production facility lead to cause additional
work which adds no value to product. Respective organisation has to produce those
products which add value to business.
Increased Revenue- Respective organisation has to use six sigma for making supply
chains in order to provide service lead to consumers. This provides satisfaction to consumers that
provide organisation with pricing power as well as higher revenues.
Lean Manufacturing
Lean supply chain management is defined as ways to remove unwanted or waste
components from process. Such approach is applied in manufacturing of products and services in
an appropriate manner (Lean Supply Chain Management, 2020). With help of such approach, it
is significant for organisation leader to determine both valuable as well as non-valuable parts of
supply chain in most effective ways. Here, respective organisation deals in retail sector so such
approach is required for manufacturing high quality products in order to remove waste elements
from it. The main elements of lean manufacturing are as follows:
9

Warehousing- This includes stock on demand where current stock is ordered as well as
stored. It also assist organisation in saving cash flow for future requirement of urgent needs
(Herczeg, Akkerman and Hauschild, 2018).
Transportation- This is defined as several stops on delivery routes, providing consumer
service, lower fuel cost, on time delivery and efficient production. Woolworths will use such
approach for eliminating paper waste and getting more organised information.
Lean Consumers- It is other elements of lean supply chain management which is
beneficial for consumers for knowing about want as well as shared interest in efficiency of
process (Jabbour and de Sousa Jabbour, 2016). This is responsibility of respective organisation
to understand need and demand of consumer and accordingly manufacture products and services
for positive outcomes.
After analysis of different theory and approaches, it can be concluded that above
organisation should adopt six sigma in order to create competitive advantage, enhance revenue,
improve employee morale. This helps them to attain goal and objectives in most efficient
manner.
CONCLUSION
From the presented report, it has concluded that organisation has to follow supply chain
management in their business for positive results. It is the process to convert raw materials into
finished goods and reach to final consumers in appropriate manner. While manufacturing
products, it is important to follow process of supply chain that begins with phase of plan and end
with return. For proper supply chain management, components such as delivery, enabling,
returning, making and so on should be applied in business. Total quality management, just in
time, six sigma are different theories and approach which should be applied by business to
improve quality of product and service along with improving it on continuous basis.
10

REFERENCES
Books and Journals
Adebanjo, D., Laosirihongthong, T. and Samaranayake, P., 2016. Prioritizing lean supply chain
management initiatives in healthcare service operations: a fuzzy AHP
approach. Production Planning & Control. 27(12). pp.953-966.
Ataseven, C. and Nair, A., 2017. Assessment of supply chain integration and performance
relationships: A meta-analytic investigation of the literature. International journal of
production economics. 185. pp.252-265.
Bendoly, E., 2016. Fit, bias, and enacted sensemaking in data visualization: frameworks for
continuous development in operations and supply chain management analytics. Journal
of Business Logistics. 37(1). pp.6-17.
Brandenburg, M. and Rebs, T., 2015. Sustainable supply chain management: A modeling
perspective. Annals of Operations Research. 229(1). pp.213-252.
Dubey, R. and et. al., 2017. Sustainable supply chain management: framework and further
research directions. Journal of Cleaner Production. 142. pp.1119-1130.
Gao, J. and You, F., 2015. Optimal design and operations of supply chain networks for water
management in shale gas production: MILFP model and algorithms for the water‐energy
nexus. AIChE Journal. 61(4). pp.1184-1208.
Genovese, A. and et. al., 2017. Sustainable supply chain management and the transition towards
a circular economy: Evidence and some applications. Omega. 66. pp.344-357.
Hazen, B. T. and et. al., 2018. Back in business: Operations research in support of big data
analytics for operations and supply chain management. Annals of Operations Research.
270(1-2). pp.201-211.
Herczeg, G., Akkerman, R. and Hauschild, M. Z., 2018. Supply chain collaboration in industrial
symbiosis networks. Journal of cleaner production. 171. pp.1058-1067.
Jabbour, C. J. C. and de Sousa Jabbour, A. B. L., 2016. Green human resource management and
green supply chain management: Linking two emerging agendas. Journal of Cleaner
Production. 112. pp.1824-1833.
Kache, F. and Seuring, S., 2017. Challenges and opportunities of digital information at the
intersection of Big Data Analytics and supply chain management. International Journal
of Operations & Production Management.
Lamba, K. and Singh, S. P., 2017. Big data in operations and supply chain management: current
trends and future perspectives. Production Planning & Control. 28(11-12). pp.877-890.
Meredith, J. R. and Shafer, S. M., 2019. Operations and supply chain management for MBAs.
Wiley.
Nguyen, T. and et. al., 2018. Big data analytics in supply chain management: A state-of-the-art
literature review. Computers & Operations Research. 98. pp.254-264.
Qi, Y. and et. al., 2017. The impact of operations and supply chain strategies on integration and
performance. International Journal of Production Economics. 185. pp.162-174.
Schönsleben, P., 2016. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Schönsleben, P., 2016. Integrales Logistikmanagement: operations und supply chain
management innerhalb des Unternehmens und unternehmensübergreifend. Springer-
Verlag.
11

Suryanto, T., Haseeb, M. and Hartani, N. H., 2018. The correlates of developing green supply
chain management practices: Firms level analysis in Malaysia. International Journal of
Supply Chain Management. 7(5). p.316.
Wang, G. and et. al., 2016. Big data analytics in logistics and supply chain management: Certain
investigations for research and applications. International Journal of Production
Economics. 176. pp.98-110.
Wang, Y. and et. al., 2015. Service supply chain management: A review of operational
models. European Journal of Operational Research. 247(3). pp.685-698.
Online
Improving Your Supply Chain with Lean Six Sigma. 2020. [Online]. Available through: <
https://www.villanovau.com/resources/six-sigma/improving-your-supply-chain-with-
lean-six-sigma/>.
Lean Supply Chain Management. 2020. [Online]. Available through: <
https://study.com/academy/lesson/lean-supply-chain-management.html >.
Supply Chain Management – Process. 2020. [Online]. Available through: <
https://www.tutorialspoint.com/supply_chain_management/supply_chain_management_p
rocess.htm >.
Total Quality Management (TQM). 2020. [Online]. Available through: <
https://www.toolshero.com/quality-management/total-quality-management-tqm/>.
TQM – Total Quality Management – Definition, Principles & Importance. 2020. [Online].
Available through: < https://cleartax.in/s/total-quality-management >.
What is supply chain management (SCM)? Mastering logistics end to end. 2020. [Online].
<https://www.cio.com/article/2439493/what-is-supply-chain-management-scm-
mastering-logistics-end-to-end.html>.
12

13