Comprehensive Analysis of Woolworth's Operation Management

This report offers a comprehensive analysis of Woolworth's operation management principles and techniques. It begins with an introduction to the topic and then identifies the efficiencies and inefficiencies within Woolworth's supply chain, suggesting potential improvements. The report emphasizes the importance of facility layout, inventory control, and supply chain management, detailing the factors that influence decision-making in these areas. Furthermore, it examines the role of forecasting in retail operations, highlighting its impact on inventory management, sales revenue, and overall operational planning. The report also addresses contemporary issues in operation and quality management practices within the context of Woolworth's business model, concluding with a summary of key findings and recommendations. The analysis covers various aspects of the retail business, including store operations, employee management, and the utilization of technology such as mPOS systems to enhance sales and market positioning.

Managing Operation
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Contents
Introduction................................................................................................................................2
Efficiencies and ineffectiveness of Woolworth and possible changes.......................................2
Importance of facility layout and inventory control..................................................................2
Supply chain and the factors that impacts this...........................................................................2
Importance of forecasting..........................................................................................................2
Issues of contemporary operation and quality management practice........................................2
Conclusion..................................................................................................................................2
Reference List............................................................................................................................3
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Introduction
In this report a study has been done regarding the operation management principle and
technique and the concepts have been applied on the actual operation of Woolworth. The key
effective and ineffective sides of the supply chain of Woolworth have been identified and
changes have been suggested. The importance of factors like facility layout has been done in
this report. The importance of inventory control has been done in this report. The importance
of supply chain has been described and the factors that play the vital role in making decisions
have been done in this report. The concept of forecasting has also been analysed in this
report.
Efficiencies and ineffectiveness of Woolworth and possible changes
The Woolworth supermarket is a retail store chain in Australia. It started its operation in the
year 1924. This organisation has 80 per cent share of the entire retail market in Australia. The
chief products that are sold by the organisation are grocery products. It operates in 995
locations across Australia and has 111,000 employees (Woolworths 2018). It also has
operations in New Zealand.
The key aspect of operation management is to take in inputs and transform them in making
effective outputs. The process of transformation involves planning; scheduling and control
which is part of operation management this play a vital role in the success of the business.
The retail operation involves the entire process from the moment the product has been
identified till the entire process of purchasing has been done and the cash memo has been
received. The retail operation of Woolworth is aimed at ensuring that the operation of the
store is done perfectly. The several activities in this regard involved managing employees,
managing supply chain, the layout of the store, cash operations, inventory management, data
management, prices and offers made by the store.
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In Woolworth most of the operation activity is conducted by internet that is used in the back
of the retail stores. The success of the business operation is dependent on the systems that are
used for operation management (Humayun 2016). The priorities of certain functions in a store
operation can be selected to be divided and the entire operation management can be viewed
from their perspective. These key positions involve retail owners, store managers and sales
associates.
Operation in terms of the business owner: the key function of the business owner is the
development of strategy. This involves several aspects like the feasibility of the current
operation as well as ensuring that the future of the business is ensured. Some of the key
changes in operation decisions that can be taken by the organisation involve the
implementation of the e-commerce website. This is a long term operational strategy. The
hardware that is going to be required for the business operation is also a decision that is taken
by the business owner. Another key aspect that has to be dealt by the business manager for
operation management of the organisation is the detection of unlawful activities that are
being performed in the store. Some of the key issues in case of large retail store organisations
involve the printing of the tickets and their cancellation (Matthei 2008). The store owner
should install software that checks for approval and maintain the records to ensure that there
are no fraudulent activities that are conducted in this regard.
Operation in terms of store manager: the store manager has to be associated with the
operation of the store more intricately than business owner. The store manager involves
several regular operational functions like the opening of the store, closing of the store and
handling the cash transactions. The size of the business operation of Woolworth is so large
that it is not possible for the organisation to manage its operation without noting the operation
of the organisation (Matthei 2008). The manager of the store should have enough autonomy
otherwise taking decision can form bottlenecks in operation of the organisation.
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Operation in terms of sales associate: in terms of the functions of sales associate it can be
said that they are least responsible for the functions of operation that are beneficial for the
organisation. They are a part of the way operation is being conducted in the organisation, the
key operational functions that can be conducted by the sales representative on their own to
ensure that there is high level of sales from the organisation are ensuring that the operational
function of the organisation that is assigned to them is done in proper time. Secondly they
should ensure that the product visibility is higher.
The existent practices of Woolworth are effective but there are scopes of improvement in it.
The Woolworth is a large sized organisation with small span of control. The organisation has
also reached a stage of maturity and in this case there are operational changes that are to be
implemented to ensure that the operation of the organisation is bettered. One of the key
operational changes that can be included by the organisation is the introduction of the mPOS
or the mobile POS (Batt 2009). The use of mobile POS has reported to increase sale. This is
an operational transformation that can change the current market positioning of the
organisation.
Importance of facility layout and inventory control
Facility layout
The facility layout is the way in which all the staffs are arranged inside a facility to ensure
that the operation process is smoothly run. There are several factors that are to be considered
in case of facility layout first is the space that is available for the organisation; secondly the
product that is aimed to be produced or sold in case of Woolworth, insurance of the safety of
the user of the facility and most important is the fast and effective production. Every centre
that is engaged in economic activity operates in a certain space and thus it is of importance
that it is thus arranged that the economic activity can be properly done.
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The facility management in Woolworth is designed to ensure that the customers are able to
gain optimal experience of shopping. Each store of Woolworth has elements like
refrigeration, centralised air condition, electrical equipments, fire safety, hydraulic,
equipments as well as recycles management. The facility management of the Woolworth
group is headed by Trent Mason he is the general manager of facility management within the
organisation. The retail FM has been outsourced for the development of the facility design of
the organisation which has been considered as one of the most innovative facility
management design.
Fig 1: Facility layout of Woolworth
Source [Beneke et al. 2012]
Inventory control
The inventory control is the method that is used to ensure that there are no problems that are
faced in the flow of production or sales of product. The key aspects of the inventory control
are the purchasing of raw material, shipping, receiving of the material, tracking the product
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and warehousing or storing. Recording turnover and reordering is also important part of the
inventory control.
The inventory control in case of retail stores like Woolworth is likely to be dependent on
factors like shelf life. There are numerous products that are present in the retail store some of
the products have high perish ability and others have low perish ability rate. The strategies
like LIFO or FIFO that is to be applied in case of inventory management in retail organisation
is highly dependent on the perish ability of the product which is termed as shelf life
(Stevenson and Hojati 2007). The smaller shelf life has to be sold faster than the longer shelf
life materials.
Supply chain and the factors that impacts this
Supply chain management is a complete cycle from the procurement of the raw material,
production process, inventory management and operational factors like logistics. It studies
the business from the very start of the production of a product till the finished product is
consumed by the customers. This involves the several factors that are interdependent with
each other and results in the effective functioning of an organisation. This involves activities
like designing, developing plans, execution of the plans and proper monitoring to match the
demand and supply within a business most effectively. It is integrated approach that takes its
vital aspects from several fields of study.
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Fig 2 Supply chain management
Source:[ Rummler and Brache 2012]
There are several factors that impact the supply chain management of an organisation. Some
of the factors that can be considered to impact the supply chain management involve
environmental uncertainty, information technology, supply chain relationship, and value
adding, supply chain management performance, business management and customer
satisfaction.
The environment uncertainty is the change in the several aspects like customer base, number
of competitors and the technology that is available. The government policy can impact the
supply chain management considerably (Tompkins et al. 2010). Overseas issues like social
uncertainties in terms of environment culture etc can also impact.
The supply chain relationship is one of the key factors that are impacted by the supply chain
management within an organisation. This involves proper sharing of information and model
of relationship between the customer and the supplier.
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The value added process factor is only applicable for manufacturing supply chain
management.
The supply chain management performance involves some of the most important aspects of
measurability like the nature inclusivity, universality, measurability etc.
Business planning involves factors like leading, organizing, proper monitoring and having the
ability to control. This is basically the method that is used to maintain the process of ensuring
management of the networking between organisations or companies. It involves factors like
sharing of innovation as well.
Most important factor that influences the supply chain management is the satisfaction of the
customer. This is the key aim of any organisation (Russell and Taylor-Iii 2008).
Importance of forecasting
There are 4 key aspects that are dealt by the demand forecasting of an organisation are the
inventory management, sales revenue, operation planning and marketing activity. The
demand forecasting is crucial in the retail organisations because it impacts the inventory
costs, increasing the cash turnover and responding quicker to market trends. There are
scientific forecasting techniques that are used for ensuring that the forecasts that are made are
done more accurately. The accuracy in the demand forecast can impact both sides of the
distribution the top line as well as the bottom line.
In the day to day operation of the Woolworth the questions that are to be dealt with involves
the number of units that are going to be required in a particular unit of time. There is a certain
set up that has to be developed within the organisation to ensure proper forecasting. There is
a certain amount of expenses that an organisation has to undergo while the forecasting facility
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has to be developed. But once this is done the profit that it is going to generate over the
period of time is innumerable.
The importance of forecasting can be judged by the fact that if the forecasting is not done
than chances are there that the demand is not going to match with the supply. In case the
demand is outweighed by supply the organisation is going to lose out on opportunity cost.
And in case the supply is more than the demand that is produced there are several
possibilities if the shelf life is short for the product there are chances that the product is going
to be wasted and in case the perish ability of the product is high than too there can arose
difficulty in making arrangement of the products. In both the cases the organisation is
encountered with losses. It can also cause dissatisfaction among the customers and also
impact the image of the company in the market.
There are certain factors that can create certain change in demand in retail sector. The
weekends are more likely to have higher demand than in the week days. There is also an
increase in demand in case of festivities (Stevenson and Hojati 2007). It is also important for
the organisation to store relevant products in times of festivities. All these functions can be
done through proper forecasting.
Issues of contemporary operation and quality management practice
Some of the key issues that are faced by the operation and quality management practices
involve
Transportation problems: the transportation problems that are faced by the operations and
quality management involve the aspect of transportation of goods that has less shelf life in
terms of quality. The second that has remained in the regard is routing.
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Green supply chain and logistics: this is another hot issue; there is increase in the level of
awareness regarding the environment. Thus there is a demand in terms of transport and
storage and other such functions that are done in the most environment friendly manner
(Shepherd and Günter 2010).
Conclusion
In conclusion it can be said that there are several aspects of operation of Woolworth as it is a
retail organisation. The key operational aspects involve the starting of the purchasing
function till the actual purchase. The key issue of this organisation is the fact that it has
reached a stage of maturity and sales boost is possibly through likely operational changes.
The facility lay out for a retail store is of immense importance and all the components of the
operation of the retail store have to be managed by the organisation. Supply chain involves
the entire process of procurement of products to products lifecycle and supply chain planning
and asset management.
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Reference List
Batt, P.J., 2009. Factors influencing the consumer’s choice of retail store. Curtin Business
School, Curtin University of Technology, Australia.
Beneke, J., Hayworth, C., Hobson, R. and Mia, Z., 2012. Examining the effect of retail
service quality dimensions on customer satisfaction and loyalty: The case of the supermarket
shopper. Acta Commercii, 12(1), pp.27-43.
Humayun, S.H., 2016. Merchandising operation of Woolworths Global Sourcing.
Matthei, P., 2008. Fleet operation. Australasian Freight Logistics, (14), p.22.
Matthei, P., 2008. Green Grocer. Diesel, 8(4), p.30.
Rummler, G.A. and Brache, A.P., 2012. Improving performance: How to manage the white
space on the organization chart. John Wiley & Sons.
Russell, R.S. and Taylor-Iii, B.W., 2008. Operations management along the supply chain.
John Wiley & Sons.
Shepherd, C. and Günter, H., 2010. Measuring supply chain performance: current research
and future directions. In Behavioral Operations in Planning and Scheduling (pp. 105-121).
Springer, Berlin, Heidelberg.
Stevenson, W.J. and Hojati, M., 2007. Operations management (Vol. 8). Boston: McGraw-
Hill/Irwin.
Tompkins, J.A., White, J.A., Bozer, Y.A. and Tanchoco, J.M.A., 2010. Facilities planning.
John Wiley & Sons.
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Woolworths (2018) {{metaController.metaData.title}}. [Online] Available at:
https://www.woolworths.com.au/ (accessed 10/ 05/ 18).
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