¶ … purchasing and supply management issue of Woolworths Limited. Mainly, the paper will focus on how Woolworths performs their purchasing and supply system and the consequent issues in both its positive and negative aspect. In addition, the essay will also examine the relationships between cost, timeliness of information, goods and services that consequents as a result of their purchasing and supply activities.
Woolworth Ltd. follows a centralized distribution model of supply chain management which means that it has consolidated all its IT centers, emergency disaster centers and resources as well as management and operation hubs into one centralized system (Network World).
The advantages of Woolworth's adopting this model include the following:
It simplifies distribution to suppliers giving them one single pick-up.
It simplifies deliveries to stores (with again this simple one pick up of package / order)
It reduces cost of operation
It improves monitoring of transportation of supplies ascertaining, for instance, that produce arrives as fresh as it left and that quality of items remains intact.
It allows for variability of products in a wide range of stores across different locations (for example, full-line stores, food stand-alones and Engen Food Stop convenience stores).
Woolworth's level of excellence in supply chain management was attested to in 2008 when they received a Platinum Award for distinction in Logistics (LPC. Int. Ltd.) in recognition of the fact that their "daily predictable deliveries are made within 15-minute windows every day and achieve high results" (http://www.lpcinternational.co.uk/pdf/news/woolworths-platinum-award2.pdf). This was despite the fact that 2004 (for which they were given the award) was a particularly grueling year for them due to unusually aggressive store rollouts and associated volume growth (Woolworths. Creating sustainable excellence in centralized distribution). As the following essay shows, Woolworth has achieved a glorious reputation in their supply chain management system that has undoubtedly resulted in much of their spectacle success. Some disadvantages too may have occurred as result, but these are few and far between as compared to their documented benefits.
2.0 Woolworths purchasing and supply activities
In this part, we will analyze how Woolworths conducts their purchasing and supply performance and what their main goals are. In the first case, Woolworths Limited operates several business segments which include supermarket divisions, general merchandise, consumer electronics, wholesale divisions, and hotels (Woolworths, 2007). Secondly, the main focus of Woolworths' strategy revolves around driving the cost of doing business down (Woolworths, 2003); it is, in other words, America's Wal-Mart.
Woolworths, to that end, would be most likely to adopt a direct supply chain since the system minimizes cost and maintains its own control over the supply chain. Finally, the supply chain management system helps Woolworth efficiently and effectively connects vendor and stores through their distribution center. All these functions, and more, of the supply chain system promise to significantly reduce Woolworth's cost and increase their effectiveness to deliver goods and services to customers.
Woolworths Supply Chain operates via Distribution Centers, Primary Freight and the Packaging and Barcode requirements in order to ensure safe, instantaneous, and efficient service between their stores and their Trade Partners.
The Woolworth supply chain management process is indeed meticulously planned and implemented and involves various agents and tasks. It follows a centralized distribution model which covers and monitors all inbound logistics, its central distribution centers and transport operations, as well as their deliveries to stores. What Woolworth focuses on is the end-to-end optimization of the cost to supply (meaning that all aspects of the supply chain management system, from beginning to end, are clearly and intensively scrutinized).
Since Woolworth, too, is a company that experiences growth and expansion accordingly producing new trading formats, new sourcing locations and new product types, Woolworth endeavors to periodically and consistently review its supply chain and logistics operation in order to ensure its currency. (The supply chain transformation program implemented to that end is called Project Refresh). It did so, recently (in 2012) also creating a supplier hotline which gave Woolworths suppliers a route to report illegality or serious misconduct (Supply chain analysis Woolworths launches supplier hotline).
The year before, Woolworth introduced another innovation where they implemented a GS1 net service that allowed standard GDSN electronic messages to be transmitted between supply chain partners (Supply Chain Analysis 6-Sep-2011 Woolworths data synchronization helps suppliers reduce costs).
Woolworth, in fact, has always been a devotee of IT software that could be used to enhance its supply chain operations. As early as 2008, the "Australian IT" listed some of Woolworth's IT investments which included packages webMethods,...
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