Woolworths Supply Chain Management: Strategies and Opportunities

This case study delves into Woolworths' supply chain management, highlighting its complexities and opportunities for transformation. Woolworths, a leading Australian supermarket chain, employs a direct supply chain approach, leveraging its distribution centers and direct store delivery to manage its vast operations. The study identifies challenges such as retail calendar pressures, diverse customer demands, and the increasing complexity arising from product portfolio expansion and global reach. Project Fresh, an initiative aimed at cost reduction and improved customer experience, is examined for its impact on the company's financial performance and competitive positioning. The analysis further explores IT system integration for enhanced collaboration and efficiency. Recommendations focus on optimizing logistics, price fixing strategies, and customer segmentation to strengthen Woolworths' competitive edge and ensure effective delivery of customer value. Desklib offers a wealth of similar case studies and solved assignments for students seeking to deepen their understanding of supply chain management principles.

SUPPLY CHAIN
CAPSTONE

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
1. Brief overview of organization and its supply chain management..........................................3
2. Analysis of the complexity of the supply chain system..........................................................6
3. Identification of opportunities to transform supply chain to ensure effective delivery of
customer value and strengthens company competitive position..................................................7
4. Two key recommendations for transformation of supply chain management and the ways in
which each recommendation implemented.................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

Executive Summary
Woolworths is one of the biggest retail stores in Australia. The company has grown to retail
giant with numerous stores throughout the world. Within our study of Woolworths we will be
examining the supply chain management process of this giant firm and in order to achieve this
we will utilize various study materials in order to complete our study in most appropriate
manner. We are going to say sincere thanks to the author of the book Christopher, C, Logistics &
Supply Chain Management Fifth edition which highly helped me in order to get necessary
information to finish this project.

INTRODUCTION
Supply chain management is the administration of the flow of products and services which
includes all other procedures that transforms raw material into finished goods. It can be
represented as an effort done by the suppliers in order to develop and put into operation the
supply chains that are highly well-organized and cost-effective in nature (Yazdani and et.al.,
2017). Firms value their supply chain managers because they fasten the flow of products towards
the consumers. In order to describe the concept, Woolworths have been taken as an organization
which is an Australian chain of supermarkets and grocery store owned by Woolworths Group. It
is the largest super market chain with huge amount of market share in front of other competitive
organizations (Christopher, 2016).
This report will illustrate the supply chain management of Woolworths along with the
complexities faced by the firm during supply chain and challenges that are identified during
supply chain competition. Apart from this, the study will also highlight the identification of
various opportunities in order to strengthen position of the firm and key recommendations for
supply chain transformation.
MAIN BODY
1. Brief overview of organization and its supply chain management
Woolworths is an Australian supermarket chain having various grocery stores. The
company was founded in 1924 and specializes in grocery products along with selling of DVD’s,
health care and beauty products, magazines, house hold and baby products along with other kind
of necessary supplies. The company offers employment to around 7000 employees out of whom
approximately 20% are associated with the carrying and mobility of goods and services while the
rest are highly concerned with information technology and other facets of supply chain
management (Frazzon and et.al., 2019). In order to handle the effective supply chain
management system, Woolworths is likely to adopt direct supply chain since it will diminishes
the cost and maintain their own control over the firms supply chain management system. The
company connects their vendors and different stores through their effective distribution centre. In
addition to that the establishment is efficient enough to manage Direct Store Delivery which
enables their vendors to deliver their products and services directly from vendors’ warehouse to

Woolworth’s individual stores. The graphical representation of supply chain management of
Woolworths has been represented below:
Figure 1: Woolworths Supply Chain Management System
Woolworths is majorly running their own logistics services in order to handle primary as
well as transportation services to deliver their stock from vendor to nearest to regional
distribution centre and secondary transport services to deliver stock from regional distribution
centres to individual stores. The above diagram has shown the primary and secondary
transportation system by independently controlling their logistics (Christopher, 2016). With the
help of this effective logistics process, the firm is able to manage the delivery time and improves
their safety measures. In addition to that, the firm also minimizes the delivery cost and give them
more of bargaining power in order to reduce cost of inventory.
In order to support their redesigned supply chain management system, Woolworths has applied
incorporated IT system that are based on the Electronic Data Interchange model. According to
the establishment, the technology and system are critical while achieving synergies in any of the
supply chain transformation. With the inclusion of this system, Woolworths expects the gains

with the help of cost saving methods (Tang and Liu, 2019). IT system within the firm has been
utilised in order to accomplish team work by sharing useful information, experiences and
knowledge between consumers, suppliers and company. Information technology has been
applied within the firm’s supply chain system for vendors, stores and other distribution centres.
Figure 2: Woolworths Supply Chain IT System
Woolworths creates cooperation with their different vendors to reduce the cost of supply
chain cost due to which they are able to maintain low and steady price. With the help of
everyday low prices strategy useful information for optimum stock reloaded. AutoStockR is a
computerised stock reloading system for stores with an aim to ensure that whether right goods in
the optimum amount are displayed in shelf or not. This system prevents the excessive amount of
goods within the shelf. Stock Smart is computerised inventory replacement and forecasting
system for distribution centre that are connected to different stores of AutoStockR system.
WOWlink and B2B are web based services provided by the establishment that facilitate their
vendors to access timely information about the purchase order, stock level electronic fund
transfer, etc. (Lahane, Kant and Shankar, 2020). With these practices the Woolworths and their
trading partners are able to monitor their trading activities.

2. Analysis of the complexity of the supply chain system
There are huge amount of complexities that has been faced by the Woolworths while doing their
supply chain system more difficult for the firm as well as the people of logistics management.
The retail calendar is acts as one of the hidden complexity in retail sector as there are various
seasonal turnover events along with planned and unplanned promotions. This all requires that all
of the goods will be in place of precisely the correct time for the beginning of the event. Most
importantly is the Black Friday period in which retailers wants to have the large quantities of the
right products at their place in order to support the busiest time of the year (Christopher, 2016).
And these times are the busiest times of the year that it stressed out each and every process, team
and facility in the regional organization. Another complexity is the customer as there is not any
specific way to service the customers. There are huge numbers of consumers demand. Customers
want to order item in different ways and thus requires proper amount of services from the
retailers at the time of requirement of goods and services (Bastas and Liyanage, 2019). The
consumers are the ones who want items delivered instantaneously along with easy availability of
the return or exchange of goods.
Woolworths are looking forward to enhance their revenue by expanding their products
portfolio, the introduction of complexity and risks also getting involved into their supply chains.
From various researches it has been identified that supply chain complexity is caused by a
various factors often resulting into the rise in consumers’ expectations for faster leading times,
their expanded goods and services and their tailored experiences. These factors force the brand
owners to support more unique orders from consumers across their supply chain which also
requires greater collaboration from their partners which improves their stock management
system and intensify the visibility along with control into their supply chain stages. Business
aspirations also contribute their part strongly towards the supply chain complexity. After the
introduction of internet facilitates more options for every business to expand their reach ability
and enhance their consumer base. This includes expansion of new markets at various diversified
locations. It also requires investment into more facilities and partner relationship for expansion
of services. Mergers and acquisitions are also required in order to defeat the complexity level of
supply chain management services within the market space. The supply chain management
within the organization are getting more and more complex with some other reasons as well such
as growth in suppliers’ relationship which is crucial for consumer satisfaction as well as

discussing, assessing and optimising these relationships which adds more to the complexity
level. With the expansion of customer base and product lines, it automatically lengthens the
supply chain management. In other words it has been explained that more stages are required to
complete orders. The proper management of inventory breaks down the possibility of
complexities within the supply chain system (Li and et.al., 2017). Getting real time visibility and
control across the entire internal as well as external network of partners is the major way to
prevent the firm from the complexities that are arises with the increased demand of consumers.
Non availability of data also arise the conditions of complexities within the supply chain system.
3. Identification of opportunities to transform supply chain to ensure effective delivery of
customer value and strengthens company competitive position
With the identification of certain complexities, various opportunities have been or
strategies have been prepared in the form of project Fresh which has been driven by the cost of
doing business downwards. The project have been started with an aim to implement customer
driven business in order to offer better shopping experiences to the customers, development of
effective human resources with the help of efficient training, restructuring the firm in order to
make them highly efficient, reduces cost in order to maintain competitive advantages, provide
products which offers best value to their consumers, implementation of effective practices for
supply chain management, be focused in order to identify and serve consumers information
technological requirements and maintain strategic capital management by sustainably prepares
core business activities and creates shareholders value (Christopher, 2016).
With the redesigning of supply chain management there are various benefits that have been
observed by the firm such as financial benefits for the firm which includes the involvement of
benefits from the introduction of project fresh which are highly able to provide great benefits to
the firm. While the time of project fresh, company records approximately 5.3 billion dollar
cumulative saving that are equal to 5% from sales volume (Dhumale, Thombare and Bangare,
2017). This estimation exceeds saving estimate. In addition to that, the financial performances of
the Woolworths have shown remarkable achievements during the implementation time of project
within the organization. The firm are also able to provide financial benefits to their shareholders
as their earning per share increases gradually. Furthermore, dividend has been paid at an
increasing rate as it indicates the ways in which the Woolworths have succeeded in maintaining

the strategic capital management by enhancing shareholders value. They are highly beneficial to
provide advantages to their customers as with the help of project fresh the cost saving have been
transferred to consumers by maintaining low prices. By doing this efforts company delivers
value not only for their vendors and shareholders but also to the consumers as well. With the
help of effective strategies, Woolworths is able to achieve competitive advantages within its
industry. There are few areas in which the logistics are presented which make the operations
management are highly effective and efficient such as:
 Supply chain: Appropriate supply chain management which optimises the flow in the
supply chain allows for inventory reductions and preventing a situation when the stocks
are running out of their products and services.
 Price fixing: this strategy allows the Woolworths allow specifying their price level of
products that are able to bring maximum level of profits and income.
 Multi dimensional segregation of customers: Company appropriately identifies the
groups of customers with similar kind of features and behaving in the similar way,
purchasing same kind of products according to their features, etc. All this highly
impacts on the planning effectiveness and efficiency of marketing procedure with the
help of customizable products as well as personalised interactions with each and every
individual (Dankeieva and et.al., 2021).
 Consumer faithfulness examination: Expressing the factors that might cause the loss
of consumers and defining their groups which could be potentially switch towards the
competitive firm of the Woolworths. These actions allow taking necessary steps to keep
regular consumers for the given products. The analysis also enables the firm to develop
loyalty programs in order to make steady the portfolio of consumers.
 The analysis of customers’ satisfaction: assessment towards the consumer satisfaction
and its change requirements in the form of goods and services development. Such
measure enables to plan activities in order to raise customer satisfaction with the offered
goods.
 Human resources: The combined form of knowledge facilitates the choice of
employees for specific work and task with a particular pay scale. They are highly
efficient enough to monitor the quality of goods and services by detecting quality
problems and the defects minimization ensures customer satisfaction.

4. Two key recommendations for transformation of supply chain management and the ways in
which each recommendation implemented
It has been identified from various studies that two same industry firms may have similar
kind of concepts, same products and services to offer as well as alike strategies but with the
proper and effective strategies, one company can able to outperform in best possible manner
(Mhetre, 2018). A better managed supply chain system is often makes the complete difference.
There are certain recommendations which help the firm to make their supply chain management
in most effective manner. The two recommendations are explained below:
 Creating an agile and responsive supply chain management: Supply chain
management and quickness provides important competitive advantages to the firm
Woolworths. Retailers are recommend adopting certain effective strategies in order to
minimise risks, reduce working capital of the firm, improves customers responsiveness
and building more resilient and agile supply chain within the firm. The company is able
to reduce the challenges requires an efficient supply chain that starts with customer
centric view of demand. It helps the firm to reduce the cycle times by removing intrinsic
latencies in the planning procedure; it commits to the well defined and structured process
of enabling agility within the firm and strategically manages the logistics as well as
transportation.
 Coordinated product and supply chain design: The supply chain focuses on the flow
of physical products and services from suppliers through manufacturing and distribution
all over the retail outlets of the Woolworths. Furthermore, the development chain also
focuses on the new products introduction and strategic partnering along with supply
contracts. Each functional product as well as innovative product requires different supply
chain strategies along with development chain. It enables the firm to design best practices
in order to facilitate different types of supply chain information that generally comes in
varied structures as well as formats.
Thus, the above two recommendations are highly efficient enough to handle the supply chain
management in most appropriate manner.

CONCLUSION
From the above report it has been concluded that the firm are able to effectively manage
their supply chain management with certain modifications within their procedure. They are able
to gain improved financial performance through cost saving. The customers are able to get
benefits from high quality products in appropriate quantity at cheaper prices. This leads towards
the competitive advantages. Company also introduced new project in order to manage its supply
chain management. The firm also reengineered their distribution system with complete
engagement of their suppliers and implement improved information and technology system to
optimize its supply chain management. The redesigning of the complete structure helps the firm
to get huge amount of cost savings and thus enhances the sales volume along with profit
margins. At the end of the report, there are two recommendations also had been discussed for
proper management of supply chain management within the Woolworths.

REFERENCES
Books and journals
Bastas, A. and Liyanage, K., 2019. Integrated quality and supply chain management business
diagnostics for organizational sustainability improvement. Sustainable Production and
Consumption, 17. pp.11-30.
Christopher, M., 2016. Logistics & supply chain management. Pearson Uk.
Dankeieva, O., and et.al., 2021. Application of Cognitive Modelling for Operation Improvement
of Retail Chain Management System. TEM Journal, 10(1). pp.358-367.
Dhumale, R.B., Thombare, N.D. and Bangare, P.M., 2017. Supply chain management using
internet of things. International Research Journal of Engineering and Technology
(IRJET), 4(06).
Frazzon, E.M., and et.al., 2019. Towards supply chain management 4.0. Brazilian Journal of
Operations & Production Management, 16(2). pp.180-191.
Lahane, S., Kant, R. and Shankar, R., 2020. Circular supply chain management: A state-of-art
review and future opportunities. Journal of Cleaner Production, 258. p.120859.
Li, Y., and et.al., 2017. Explaining the Influence of Workarounds on the Effective Use of a
Supply Chain Management System. In 25th European Conference on Information
Systems (ECIS 2017).
Mhetre, N., 2018. Using IoT in supply chain management.
MUNEER, S., 2020. The information system management and its infrastructure for supply chain
management as antecedents of financial performance. The Journal of Asian Finance,
Economics, and Business, 7(1). pp.229-238.
Peridawaty, P., Toendan, R. and Wenthe, I., 2021. The effects of entrepreneurial orientation and
organizational learning on marketing capability in supply chain management. Uncertain
Supply Chain Management, 9(1). pp.21-30.
Tang, Y. and Liu, Y., 2019, February. Information Management System and Supply Chain
Management (SCM). In The International Conference on Cyber Security Intelligence
and Analytics (pp. 1421-1426). Springer, Cham.
Yazdani, M., and et.al., 2017. A group decision making support system in logistics and supply
chain management. Expert systems with Applications, 88. pp.376-392.
1