Supply Chain Management Report: Whole Foods Market Case Study Analysis

This report provides a comprehensive analysis of Whole Foods Market's supply chain management. It begins with an introduction to supply chain management, defining its core principles and importance in achieving competitive advantages. The report then focuses on Whole Foods Market, detailing its operations, sourcing strategies, and distribution networks. It examines the company's commitment to organic and natural foods, its relationships with suppliers, and its use of technology and logistics providers like TAGG logistics to optimize its distribution. The report also explores the major issues and risks in the company's supply chain, including risk assessment, auditing, and certification requirements, particularly in relation to ethical sourcing and transparency. The report highlights Whole Foods Market's efforts to ensure product quality, ethical labor practices, and customer satisfaction, making it a valuable case study for understanding supply chain management in the retail and food industries. The report also delves into the company's supply chain in the USA and its disclosure practices, including the California Transparency in Supply Chain Act of 2010.

Supply Chain
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK .............................................................................................................................................1
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Supply Chain Management is defined as the administration of activities related to supply
chain in order to increase customer value and accomplish sustainable competitive benefits (Tako
and Robinson, 2012). It is the management of flow of products and services, includes storage and
movement of raw materials, inventory and finished goods from manufacturer to end users. It
refers to the creation, planning, implementation, monitoring and control of activities of supply
chain with the aim of creating value, develop competitive structure, leveraging logistics all over
the world, adjust supply with demand & measure performance globally. It is concerned with risk
management and sustainability. In present report, the study is based on Whole Food Market
which is located in United Kingdom. It is a leading grocery store in organic and natural food
industry and its product includes meat, prepared food, tea, cheese, seafood, bakery, wine,
nutritional supplements, books , coffee, etc. It is first certified organic grocer which particularly
positioned itself in the super market segment of organic and natural food products. Logistic firms
moves goods and services from point of origin to consumption so that, requirements of
customers can be meet. Logistics of physical goods includes integration of flow of information,
material handling, manufacturing, packaging, stock, transportation and warehousing.
TASK
Supply chain management
In business operations and management activities concept of supply chain management is
used to organise and manage the flow of goods and services (Zegordi and Davarzani, 2012). It is
a management which describe the management tactics, concepts, principle and theories subject to
product and service management. This concept covers certain criteria like storage of raw
material, management of work in progress and finish goods, connections and networks with
creditors, debtors and suppliers, linkage with other business entities and channels to execute
products and services to end customers.
According to Michael supply chain management is an activity performed by organisation
to maximize customer interest, value and involvement to attain sustainable and competitive
advantage. It is an activity subject to product development, production, sourcing and logistics. It
works as an information system in organisation to support and lead functional, operational and
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production management. It execute required information and details among these department to
build an effective communication path.
According to Christopher, (2016) supply chain management as a concept of logistics
management. He tells that logistics is the process of strategically managing the procurements,
movement and storage of materials (Christopher, 2016.). The concept of supply chain is focused
around reducing the cost of products and services by managing the process of delivering
products and services to end customers. This concept is defined around competitive advantages,
cost advantage and value advantage. This concept defines as a value chain which defines supply
chain as a profit maximising tool to get competitive advantage.
is a professor and author if e- business division, management school, university of
Liverpool, UK. Li defined the e-supply management in respect of manufacturing the products
and services. It defines the concept of supply chain as value chain. It is a process, in which
products and services are manufactured and supplied to customer by providing value added
services (Myerson, 2012). Value added services includes product development and design,
packaging, delivering to customer and post sale services. Li introduced information technology
in supply chain. Base of e-supply chain is e-business plans and approaches, executes front-end
and back-end operations in supply chain by using web and information system.
According to Paul Myerson, (2016) supply chain is a method which requires lean ideas,
thoughts and creativity to access the supply chain process. There is a lean supply chain
methodology is defined in sequential form and it linkage of six sigma with supply chain is
described by the author. What are the major issues found in manufacturing process which affect
the supply chain. There is a definition of 'Waste' given in respect of minimize the consumption
level of raw material and maximize profitability. The logistic of Global supply chain also
described and various areas are defined to identify the potential areas of wastage. Overall the
concept move around maximizing the profit by applying lean supply chain methodology and
reducing the level of wastage.
Donald Waters and Stephen Rinsler, (2014) edited the method of global logistics and
supply chain management system. They defined this concept in global context. What are the
strategic corporate decisions and how it influence the supply chain management and process.
Global sales channels, talent shortages and cost pressure are types of issues which are tackled by
logistic managers of large and global business organisations. Dynamic changes can be seen in
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the structure and process of supply chain in global organisation. There was a brief report was
presented in global summit subject to global logistics and supply management. Interviews and
conversations happen among authors and Ceo's regarding the subject. It was based upon 62
senior logistics and supply chain executives from global organisation in Brazil, China, France,
Germany, India, United states, United Kingdom and Netherlands.
Supply chain in Whole Foods Market USA
Whole Foods Market Inc. is an American supermarket chain which provides food
products and services without any artificial preservatives, colours, bleached structure,
sweeteners, flavours and hydrogenated fats (Li and Jialing, 2011). Organisation provides a
healthy food market at global level by managing vast channel of suppliers and dealers. It has
approx 350 retail and non retail branches in the US, Canada and UK.
Supply chain management of Whole Foods Market is a combination of multiple channels
and connections. It purchases raw material, products from local, regional and international
wholesale suppliers and vendors. Regional and national levels are on the top in the list of supply
chain management. It is focused on purchasing local and regional products. It is estimated that
quality and quantity found better from local and regional producers. Direct channels and
manufacturing programs are run to connect with supply chain management of company.
It is a certified adherence to National Organic Program standards in United States. It
contains the activities regarding monitoring products from one store to another store, placing
them in a shopping cart until they reach in stores (Waters and Rinsler, 2014). In 2007
organisation launched Whole Trade Guarantee to enhance its corporate social responsibilities
and ethics subject to product development, innovation and improvement. Certain criteria are set
around which supply management system stands like fair price of crops, environment friendly
operations and management, effective wages and labour rates, work conditions. There is a one
percent of proceeds invested for Whole trade Certified Products to support micro-loan programs
to developing countries economic growth.
It is no hidden fact that Whole food market is best supplier when it comes to natural and
organic food. This organisation encourages sustainable means of carrying out a task. This mega
supplier of organic products have taken help from TAGG logistics and have outsourced this
function. This logistics service provider cater the transportation needs of clients who wish to
distribute their products at distinct places. The company have made sure that the distribution
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system of the organisation matches with standards established by EDI. They have a competitive
edge when it comes to delivery appoints taking help from (ASNs).
The total inventories for this largest food supplier accounted at 483 million USD. The
average inventory turnover for the recent quarter stands at 4.96. this corporation have recently
announced partnership with Infor to create cloud based platform exclusively for this company.
This partnership will not only ease the manner in which work are carrying but it will also equips
and organisation with competitive edge among rivals. The inculcation of technology will help a
business in carrying out their business distinctively.
Customer service is mentioned to as most crucial segment of an organisation as it ensures
that customer are satisfied with services offered by the organisation. These are most crucial
stakeholder of an enterprise. The company perceives it as a opportunity to satisfy needs of
customer in best way possible. This organisation is known to go extra mile in order to satisfy,
delight and nourish customers. Corporation aims to turn its customer into advocates so that they
can take about services with their family and friends. They emphasis of Whole Foods is to serve
customers in efficient, competent and knowledgeable manner.
Distributors and stores
Whole Foods is a global foods supply organisation which have large distributors in
United states. Blossom Hills in San jones, Colfax, Roaring Fork, Colorado boulevard, Santa fe
(Cerrillos) are the main stores, which are linked with the supply chain of company. It has natural
food chain stores which are engaging in delivering best and pure foods, fruits and vegetables to
customers.
It launched 365 by Whole Food Market in June 2015. it is a store which used digital tools
and information technology. There is a mobile application and a websites made which make
smooth its supply chain process. Zero wastage is one common goal around which organisation's
operations are centralised. Scrap is used in LED lights and carbon dioxide powered refrigeration
cases. This store has many branches in Silver lake which is neighbour of Los Angeles., Santa
Monica, California., Bellevue, Washington., Lake Oswego, Oregon., Cedar Park, Texas. And
Akron, Ohio.
It has potential suppliers which provides organic and natural raw products and resources
for manufacturing products (Jacobs and Chase, 2017). It has also linked up with online shopping
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stores and e commerce websites. A formal and professional path is made to connect with the
organisation. RangeMe is a system software in which product details and portfolio of each and
every product delivered in categorised way. Any organisation or company which wants to
connect with Whole Foods Market can update their portfolio though RangeMe. All the relevant
details and information regarding products are to be uploaded on the system. Management of
Whole Foods market analyse the details and product quality and provide feedbacks and
suggestions directly to company. There are different categorise made under RangeMe such as
Grocery which contains food products, dairy frozen and general merchandise, body care and
apparel and lifestyle items, Prepared foods, Meat, seafood, speciality which includes cheers beers
and wine.
All the products which are produced and manufactured go through with high quality
standards and checks. It is required to provide all essential details regarding ingredients while
online submission for being a member.
Disclosure of supply chain of Whole Food Market
Supply chain Act of 2010 defines the disclosure of Whole Food Market. It shows the
California Transparency in supply chain. Below are some disclosure made for Whole Food
Market under the act
1. Risk Assessment – Company works as preliminary risk assessment for its 365 everyday
value products to ascertain the risk. Risks are the part of business operations it remain
associate with day to day transactions, delivering of products, manufacturing and
delivering the products. There are different risk associated with slavery and arrangement
of human resources from direct supply chain. It has selective and specified list of branded
products in which it deals. Whole Foods Market has its Trade Guarantee mark which is
checked by authorised persons. It is a procedure which defines the compliance and
standards with appropriate wages and working conditions.
2. Auditing – Internal audit of organisation is performed to manage and control the
operations of business. Categorised audit program is made to analyse the quality, safety
and elements of social responsibilities. Whole Food Market contains high amount of risk
with those products which remain associated with the management and operations. It
remain focused upon reducing the ratio of human trafficking and slavery.
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3. Certification requirements – all the procedures and formalities regarding issuing the
licences and authorities, getting certificates and grades are covered in this disclosure. It is
a process of providing certification and authorities to its suppliers which deals in multi
products and services of raw material and goods. Products are audited with high qualities
standards and multiple physical checks before getting the certifications. These standards
are made around Food market standards with respect of slavery and human trafficking.
These standards include laws and regulations regarding thrall and human rights in which
its suppliers are working.
4. Internal Accountability – All the operations and functions are aligned with ethical and
social responsible conduct at workplace. Its employees, suppliers, buyers adhere the
contracts and memorandums of business. There is a specific code of conduct designed
with laws regarding addressing slavery and human rights, violation policies and
compliance policies. Contract contains the liabilities and responsibilities which need to
fulfilled by person in the situation of breaching the contact and policies. Contract bound
the parties to adhere the policies and laws which are mentioned in contract.
5. Procurement Training – it is require to perform the task and projects in effective and
consecutive way to attain competitive advantage (Golicic and Davis, 2012). Whole Food
Market organise training program to teach its employees the meaning of ethical working.
It is essential to operate the functions to make smooth and flexible supply chain
management. Training and development programs are made of certain rules and
guidelines which covers all the essential points subject to supply chain management
principles and methodology. All these training programs remain centralised around find
out supply chain issues. Slavery and human Trafficking are the most common issue
around which its supply chain management disclosure designed.
Five force's analysis and profit model
Proter's five forces model is considered as best fit and appropriate approach to understand
the dynamics of supply chain management. This approach is used at global level to adopt the
changes and managing the flow of suppliers and buyers, products and services. This tool was
introduced by Harvard Business school professor Michael Porter. This approaches is
implemented to analyse an industry's sustainability and profitability. This is one of the strategic
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planning tool which is used to reduce the barriers and resistance come across supply chain
process. This approach is based upon five models which are described as under;
(Source : Porter's five forces model, 2017)1. Competitive rivalry – This element indicates towards the number and strength of
competitors in market. How many rivals are working in organisation and affecting the
supply chain process. It is an analysis of product quality and services in comparison to
other businesses. Low product prices, aggressive marketing tactics attract high amount of
customers and impact the marketing campaigns. Buyers and suppliers have more options
according to this model. Organisations have to represent their brand image in aggressive
and impressive manner to gain high competitive advantage.2. Supplier power – It is estimated that suppliers opt those organisations which offers high
price and cost subject to raw products and material. This is one of the important aspect of
supply chain management. It is analysed that how many potential suppliers organisation
is managing and what are the strength to make new channels. Whole Foods Market Inc.
has impressive brand image in United States. It has vast amount of potential suppliers in
UK and US. It is estimated that more options of Buyers create more complexity in
building effective supply chain. Cheaper alternatives always attract the suppliers interest.
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3. Buyer power – Gaining customers interest and involvement is one of the major task
which is performed by management of organisation. This model indicates towards the
evaluation of loyalty and reliance of customer subject to changing the price of product.
How many buyers are available and what is the size of their orders are evaluated in this
model. Are the buyers enough strong and stale to dictate in respect of organisation.
There is a increasing level of prices evaluated subject to drive the interest of employees.
How much potential found in customers and buyers to remain stable by increasing the
product prices of products.4. Threat of substitution – There are alternative options and substitutes available in market
which divert the customer and buyers. It increase the level of competition in market. In
retail and food industry huge amount of substitutes and alternative products are found.
Whole Foods Market deals in food products and daily usable goods. Alternative products
and substitutes affect the relations and connection channels. Law price and cheapest rates
are the main factors which enlarge the scope of competition.
5. Threat of new entry – every new change brings lots of threats and challenges. New
entities and advancements make complex the business environment. There is chances to
lose customer involvement and interest by adding entry of new entity. If organisation has
stable and root level of position in market then it remain easier to absorb the change in
effective and positive manner.
Method to support and complete the task
Supply chain management is a concept which is use in managing the strength of
employees buyers and suppliers subject to delivering the products and services to end customers.
There are various types of task operated by business organisation (Chen, Sohal and Prajogo,
2013). Approaches and methods which are used to manage supply chain management help to
smooth and make flexible the process. Inventory management system, ABC system, Stock
management and physical verification are the methods which are used by retail and wholesale
organisations. Six sigma, total quality management are also the methods which are being used
now a days in supply chain management.
Whole Foods Market is a global industry which is engaging the providing food products
and supply chain to multiple stores and branches in United States and United Kingdom. Its vision
and mission are centralised around making sustainable future. It contains high customer values,
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human creativity, diversity and individual choice. All these aspects help in managing and smooth
functioning of supply chain. It contains dignity and integrity of every individual who is aligned
with the operations and management of company. Different tools and methods are used by
Whole Foods Market to execute the operations and management of supply chain with in the
country and across the country.
Core Method
A former Whole Foods Market team in which Corey Rennell was the head introduced the
core method after analysing and studied traditional food sources throughout the world. Corey
went on a pursuit to gather essential elements regarding nutrition from bottom (Gopal and
Thakkar, 2012). He formed a team of selected participants and team members who were aligned
in research. Some certain criteria were made around biology of food. They utilized 14 months
living with twelve tribes around the world. And critically analysed the factors regarding elements
and ingredients. They found the most essential and enriching elements as nutrition. This research
methodology was named as Core. It consumed the knowledge and resources in consecutive way
to find out core competence of work. They find different ingredients such as Whole ingredient,
Sweeteners free meal replacement products, high protein bar in two flavours as (Warrior) and
vegan bar in two flavours (Defender).
As per Pakala's preservative (2017), supply chain management system has become a core
management system and considered as important subject to managing retail and manufacturing
departments. These method was the historic and effective in the history of Whole Foods Market.
It not only build the natural and orogenic manufacturing of products but also build social
relations with the community. It build and strong ethical culture by this research.
Forecasting method
Supply chain management concept contains lots of uncertainties which affect the
procedures and channels which remain associated with the supply chain process (Wagner,
Grosse-Ruyken and Erhun, 2012). In simple words forecasting is a process of predict the
situations and circumstances about future business activities and plans. This is one of the process
which is divided in three major forecasts like
1. Economic Forecast – Analysis of economic indicators like investment, supply of raw
products and material, inflation rates, and interest rates are the main factors which are
analysed in this forecast.
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2. Technological Forecast – Analysing the innovative factors and advance technologies
which need to be implemented.
3. Demand Forecast – it is an analysis of future demands and requirements from customer
perspective.
There are two types of forecasting methods are used for effective supply chain
management.
Qualitative forecasting techniques – this is an approach which address intuitive and
judgemental evaluation. This method is used in that scenarios and situations when data and
informations remain uncleared or not available. Whole Foods Market has more than 350 stores
and branches and this method is implemented in tribal and rural areas, because the informations
and data remain uncountable in these areas. Executive opinion, market survey, sales force
composite and Delphi methods are the main area of analysis in this forecasting method.
Quantitative forecasting technique – this is one of the approach which remain based
upon historic events and records to forecast the situations and market conditions. There are
intrinsic and extrinsic techniques are typically used in this management process. Graphical
forecasting techniques and trend forecasting models are the sub techniques which are used in this
forecasting method. Times series models and associative models are the models which are key
criteria of analysis.
Application of business process
According to the view point of Bernadet Martrous, (2017), it is evaluated that Whole
Food Market is one of the company which deals in organic and natural food products. It is the
national certified leading grocery store which positioned itself in supermarket segments. The
company was established in 1980 by four businessmen with the creation of two separate
companies, Clarksville Natural Grocery and Safer Way Natural Foods. The company, Whole
Food Market rapidly expanding with more than 300 stores throughout the United States, Canada
and UK. The firm not only manufacture high quality products but, also listed under 100 best
companies. It is believed that, success of the business is due to their mission and its execution.
The company has had positive impact on society and organic food movement as a whole.
The company sells lots of healthy food products from nutritional supplements to prepared food.
The mission of the firm is to offer high quality organic products and to promote the well being
and vitality of all the people by supplying wholesome foods of highest quality. The growth
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