Woolworths Supply Chain: Service Quality Issues and Recommendations

This report provides an assessment of service quality issues within Woolworths' supply chain, focusing on challenges related to customer satisfaction, waiting times, and operational efficiency. It highlights problems such as long queues, underpaid staff, and the need for technological upgrades like online payment systems and efficient queue management. The report also discusses the impact of emerging trends like digital transformation, sustainability, and globalization on Woolworths' service delivery. Recommendations include improving communication, implementing feedback systems, and adopting advanced technologies to enhance customer experience and streamline supply chain processes, ultimately aiming to improve service quality and customer loyalty. Desklib offers a wealth of resources, including similar reports and solved assignments, to aid students in their academic pursuits.

1Discuss about the
service quality issues
and associated
companies in Quality
letter assessment

Executive summary
An increasing trend of service sector in the global economy nowadays company is
focusing on supply chain and operations management in service context. For instance, logistics
solution for quality services needs to be taken into consideration by using ERP systems as an
advanced technology for managing supply chain in service firms. This report is going to discuss
about challenged related to supply chain and Customer waiting is also argued to impact the
buying behaviour, so company can improve its performance by reducing customer waiting time,
increase service capacity by having queue management and models like queuing systems,
scanner, online payment modes etc.

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
1. Brief background about the company Woolworths.................................................................3
2. conceptualisation of the company’s supply chain of the chosen service provision................4
3. Identification of problems of the supply chain and how it can be better.................................5
4. Recommendations....................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In today’s business environment companies are facing service quality which needs to be
taken into consideration such as communication issues, credibility issues, reliability and
responsiveness and competency. The major purpose of the study is to highlight the key problems
in the measurement of service quality and why company’s management team are ignoring some
of costs of poor service quality. The present report will be based on retail company Woolworths,
provides groceries to customer and help them eat healthier and fresher food. The report will
provide information on supply chain of the service provision and also identify problems of the
supply chain just because of emerging trends in the retail industry. Further it will give
recommendations to overcome with the challenges.
1. Brief background about the company Woolworths
Woolworths is one of the most popular brand in the world, it provides grocery items to
customers. It is largest retail brand in Australia by revenue and achieved second position in the
New Zealand. In 20th century the company have experience steady growth because of it
fantabulous performance and began to diversify its business. The company has also undergone
significant consolidation, since 2012 plus, divesting its online shopping, physical stores, home
improvements and fuel retailing in order to concentrate on supermarket retail. The firm owns
supermarkets known as Woolworths supermarkets. Also offers varieties of benefits such as
customer loyalty program everyday rewards and provides discounts on products in stores. Also,
it provides major benefits in the supermarkets of New Zealand such as fresh choice and super
value (Kasanagottu and Bhattacharya, 2018). In the recent years that is 2019, Woolworths
admitted to having underpaid its staff members by millions of dollars. This controversy has
impact the business operations of the company. In the year 2021, it was further revealed that the
company underpayment of employees was more extensive. Not only this, the company also
founded guilty of breaching spam laws and failing to unsubscribe clients from, their mailing lists.
However, the company has effective deal with this situation and make a good come back as now

it is divided into 3 business divisions such as New Zealand food and portfolio that is Big W and
Australian food. Not only this, the company also provides financial services and insurance and
products such as gift cards and credit cards.
2. conceptualisation of the company’s supply chain of the chosen service provision
Service quality and process improvement plays a vital role as it can improve the customer
satisfaction. Nowadays, customer satisfaction plays a vital role in the market as it is a key to
build a loyal customer base, which can improve the customer lifetime value and help company to
achieve success. By having proper planning, the company can easily achieve customer
satisfaction which helps them to sustain profitability. Therefore, it is said that it is essential for
business entity to understand and have knowledge of service quality as a concept and effective
quality measurements is must. The company must need to know about various methods in
quality improvements by having assurance, empathy, reliability and responsiveness.
poor services of Woolworths
As Woolworths business grew day by day as it had almost 31 shops in the UK by the year
1914. But with the increasing trends in the market the company had to more focus on its
operations and focus on pricing strategy. However, the company had opened about 190 self-
service stores by the year 1970 but had faced issues such as management issues, long waiting as
customer started complaining about this (Kasanagottu and Bhattacharya, 2018). The positive
thing was that company did not lose hope and created new division in the stores by establishing
woolco department stores providing large number of products such as groceries, car services,
clothing and restaurants at reasonable prices. Due to its stated aims and objectives the company
wants to achieve customer satisfaction at higher level. After the year 1970, profits and sales of
the company started failing because of its competitors as the firm was unable to provide on time
services to customers. It competitors such as M&S was overtaking its profits and sales both. The
firm failed to chalk out suitable strategies which is important to take on its biggest competitors.
The major problems faced by the company is that customers were not satisfied with the customer
services quality. Another major problem faced by the company is lack of well-trained employees
and skilled workforce. Due to lack of availability of staff members the company was not able to
provide on time services (Wright and et.al., 2021). However, the firm tried its best practices in
order to improve its services at store by introducing new methods and systems of centralized

payments. Also, the company’ profit was increasing to some great extent but it failed to boost up
its profits and was not able to achieved desired target and goals.
As competitors of the company became more prevalent in the industry, this has created
more pressure on the business. Due to offers provided by the competitors like Argos, Next and
Walmart, Woolworths had to focus on its strategies and improve it such as lowering of prices,
providing better service, on time service without long line at billing counter etc. apart from this,
the company was forced to cutting down the dividends. The management of the firm decided to
sell 200 unprofitable shops out of about 990. Due to this firm was facing heavy decline in
revenue and sales and was not able to make good expansion.
3. Identification of problems of the supply chain and how it can be better
Due to emerging trends in the retail field that is easy access, online payment, cashless
facility, scanner availability, the firm has to make investment in such new and advanced
technology. Major challenge: The waiting time near the billing counter is huge as customer have
to wait for so long just because of this they get annoyed. Due to this company was facing issue
such as low customer base, low productivity, low performance and profitability. Consumers were
not satisfied with the services provided by the firm also they have faced problems as business
sites were not at prime location. Due to this customer was finding it difficult to its stores because
of this reason they get annoyed (Koberg and Longoni, 2019).
Supply chain management of the company should be well developed as it can attract
more customers to purchase products or services (Nunes, Causer and Ciolkosz, 2020). It is
closely aligned with cataloguing, it is the systematic process of management of acquiring the
quantity of products which is essential to operate business and also maintain an end item of
material for an initial service period. With the help of supply chain management, the company is
able to improve its overall performance which helps them to gain more satisfaction of customers.
By having supply chain management, the company is able to reduce cost and enhance
satisfaction level of customers by improving delivery time on billing counter.
As we all know that with the change in latest innovations the impact of this changing
modern trends such as internet of things and data analytics on services has influences the
business operations. So by having value chain and supply chain management the company can
create competitive advantage in the marketplace (Nunes, Causer and Ciolkosz, 2020). This social
trends and innovations has created threats and opportunities both for the company. In addition to

this, sustainability is another emerging trend which has impacted the supply chain management
because nowadays company are using sustainability to increase their competitive advantages.
Due to green logistics and supply chain the markets have to focus more on sustainability as it
will continue to be a critical challenge in the upcoming years. Also, globalization is another way
of concern for company as it has caused a sharp increase in services outsourcing, in which lower
income areas have included further in the delivery process related to service (Supply chain
challenges and tips to overcome supply chain issues in 2021, 2022). The firm needs to manage
cross border outsourcing arrangements so that it can develop the service provision. Multiple
partner selections can be done in order to work effectively and best practices in service supply
chain.
There are many types of challenges that can be faced during supply chain management such
as:
Changing attitudes of consumer: as we all know that due to changing trends in the
market and demand for products have created pressures on the company. Nowadays, after
pandemic customers have changes their buying behaviour like lowering the threshold for
delivery time and online payment modes. They want to achieve full satisfaction by raising
requirement for a positive support and high customer experience. By using inventory
management software, the company can make supply chain effective in order to fulfil the quality
service.
Digital transformation- when talking about supply chain operations, it is essential to
talk about digital transformation and IoT as it can enhance the way company approach the
traditional supply chain, which also includes online payment, scanner, QR codes, on time
delivery and artificial intelligence (Learning from technology, 2022). By using this systems, the
companies nowadays are achieving cost effective and efficient working and deal with challenges
lies in implementing them across an existing supply chain of the firm.
To improve waiting time, With the help of queuing model such as FIFO, LIFO and
priority based in order to provide them service. In the FIFO method, the company can serve on a
first in first out basis, while in LIFO they are serve in a last in fits out manner which help them to
satisfy customer on the basis of their requirements. In this way company can easily practice
capacity planning and make decision criteria on the basis of that. From the discussion it has been
noted that by using service quality design and continuous improvement the company is able to

ensure provide quality service to customers. For this they can use quality gap analysis method,
cost of quality and other tools related to it for analysis and solving problems. This can help them
to recover process of waiting time and recovery process. With the help of benchmarking method,
the company can easily ensure a service design of high quality is being done.
4. Recommendations
 As we all know that handling customers is a difficult task especially when they are
getting annoyed. it is recommended to company to focus on handling frustrated
customers by using effective methods such as practice communication system, follow
feedback system so that they can know about needs and wants of customers. By doing so,
the company management team can promote open communication in the working
environment. It is essential for them to follow up with them so that their concerns can be
known on time and proper action must be taken. Communicating with the clients will
help the company to create healthy and pleasant waiting area. If any customer is facing
any issue, then they must be given time to raise concern and help them to recover service
related issue example customer service centre.
 The company must invest more on training and development sessions for employees so
that they can develop the customer service. Highlighting the priority of customers will
help Woolworth to deal with such challenges and deal with angry customers. The basic
rule of handling customer is that offer them comfort. As we all know that one of the
major reasons customers gets frustrated about long wait time at billing counters and long
lines is that they are on their feet and stuck in the store (Craighead, Ketchen Jr and
Darby, 2020). So, it is important for company to provide them seating, hire more staffs
and arrange more billing counters. It is also recommended to pass out numbers so people

in the stores can walk around while they wait for their number to be called. Also, provide
them something effective to do in line and if possible make queues wider and fairly.
 In addition to this, the firm can use new technology and new ideas used by competitors
that is scanner, online payment, QR code etc. so they can make payment easily without
waiting so long. Plus, it is suggested to focus on acting quickly and address a concerns
of clients. With the help of yield management models, the company is able to enhance
customer satisfaction.
 Furthermore, the company can use queuing model by utilizing A/B/C notation in which
they can plan the waiting time and develop capacity planning too.
INTERVENTION PLAN
 Firstly, the company can know details about the service quality, its importance and types
of service quality dimensions such as empathy, reliability, responsiveness and assurance,
tangibility. As we all know that service quality gap model (SERVQUAL) is very
essential in intervention plan, as by using this model company can find out gap in service
quality and measure it properly. Majorly this tool is used by the product manager across
all the retail industries. The major purpose of this model is to find out the gaps between
actual services provided at various steps of service delivery and customer expectation at
that time.
 By having communication methods, on time delivery, reducing waiting time by following
customer expectation the company can fill the gaps of service quality. It is essential for
company to lead a team in such a manner that it can improve process initiative and
measure process capacity by having performance indicators. With the help of walk
through audits company can keep track on staff and analysed documents created during
the service process to know about weak points related to waiting time.
 If the waiting line is long, then buying behaviour of customers can be impacted.
Customer waiting is argued to affect customer decision making process also and can
impacted performance of the firm so after communication method, Woolworth can use
methods like reducing customer waiting time with the help of increasing service capacity
as it can help them to increase service costs.

 With the implementation of yield management, the company can maximize profitability
and increase customer satisfaction because now they are able to provide quality check in,
online payments, cashless facility (Pettit, Croxton and Fiksel, 2019).
 The key to successful business is that building trust with the staff members who work at
billing counters and frontline workers who handle people. It is essential to empower them
by using digital technologies as a means of making their working environment easier so
that they can handle annoyed clients (Novais, Maqueira and Ortiz-Bas, 2019). Digital
devices, tools and technologies such as tablets, laptops and even fastest internet is very
important to make things easier at billing counter. With every new technology comes new
skills that must be learned by staff members so it is essential for company to provide
training to help prepare them for the future of work at workplace. In this way by the use
of smart technology the company can transform customer experience at waiting line. To
conclude, the interaction between customers and frontline staffs is the best way which is
recommended to improve performance and waiting time.
CONCLUSION
From the above discussion on service quality issues, it has been identified that changing
customer habits and decision making process of the clients is one of the main reason behind
failing of business operations. It is essential for company to understand the role of both
employee’s recruitment and customer’s satisfaction at the same time by providing them support.

REFERENCES
Books and Journals
Cole, R., Stevenson, M. and Aitken, J., 2019. Blockchain technology: implications for operations
and supply chain management. Supply Chain Management: An International Journal.
Craighead, C. W., Ketchen Jr, D. J. and Darby, J. L., 2020. Pandemics and supply chain
management research: Toward a theoretical toolbox. Decision Sciences. 51(4). pp.838-
866.
Kasanagottu, S. and Bhattacharya, S., 2018. A Review of Metro, Target, & Woolworths Global
Business Strategy. International Journal of Mechanical Engineering and
Technology. 9(7).
Koberg, E. and Longoni, A., 2019. A systematic review of sustainable supply chain management
in global supply chains. Journal of cleaner production. 207. pp.1084-1098.
Novais, L., Maqueira, J. M. and Ortiz-Bas, Á., 2019. A systematic literature review of cloud
computing use in supply chain integration. Computers & Industrial Engineering. 129.
pp.296-314.
Nunes, L. J. R., Causer, T. P. and Ciolkosz, D., 2020. Biomass for energy: A review on supply
chain management models. Renewable and Sustainable Energy Reviews. 120. p.109658.
Pakurár, M. and et.al., 2019. The impact of supply chain integration and internal control on
financial performance in the Jordanian banking sector. Sustainability. 11(5). p.1248.
Pettit, T. J., Croxton, K. L. and Fiksel, J., 2019. The evolution of resilience in supply chain
management: a retrospective on ensuring supply chain resilience. Journal of Business
Logistics. 40(1). pp.56-65.
Sodhi, M. S. and Tang, C. S., 2021. Supply chain management for extreme conditions: research
opportunities. Journal of Supply Chain Management. 57(1). pp.7-16.
Wright, C. J. and et.al., 2021. While Woolworths reaps the rewards, the Northern Territory
community will be left to clean up the mess. Health Promotion Journal of Australia:
Official Journal of Australian Association of Health Promotion Professionals. 32(2).
pp.158-162.
Online
Supply chain challenges and tips to overcome supply chain issues in 2021. 2022. [Online].
Available through: < https://www.skubana.com/blog/future-of-supply-chain>

Learning from technology. 2022. [Online]. Available through: <
https://openaccess.city.ac.uk/id/eprint/16048/1/Marinova%20et%20al.%202017.pdf>