Essay: Issues And Challenges Of Woolworths: An Analysis.

Woolworth's retail operations

Question:

Discuss about the Issues And Challenges Of Woolworths.

The main aim of this paper is to explain and analyze the issues and challenges of Woolworths that are being faced by the company while conducting business operations at international level. The supply chain and inventory management are biggest challenges for the firm. The paper explains that how the firm is dealing and overcoming these issues and challenges. Furthermore, here is the discussion about the supply chain management of Woolworth’s group.

Woolworth’s group is a major Australian retail company which is incorporated in 1924. It is the biggest company in Australia measured by revenue. There are approx 202,000 employees employed in the organization. The mission of the company is to deliver the best quality of products and services to the customers in the international market (Woolworths, 2018).

Mission: The main mission of the company is to achieve and gain financial security and well being by providing wide range of products and services at appropriate prices in the international market.

Vision: The main vision of the Woolworths group is to maximize profitability by rendering unique and best quality of products and services.

Strategic goals: Strategic goals play a vital role to attain long term mission and vision of the firm effectively and successfully. The goal of the company is attain long term vision and mission of the corporation.

There are various issues being faced by the corporation in today’s competitive world which may influence the long term success and growth of the firm. The company is unable to fulfill the demand of the customers due to lack of stocks and goods. The organization is failed to maintain sufficient stock in the warehouses which could influence the financial position of the firm in the global market. In addition, the company is not provided adequate wages and salary to the workers at the workplace (Edwards, McKinnon & Cullinane, 2011). Therefore, it also affects the profitability of the company. Due to globalization, the corporation is unable to maintain quality and safety of the products and services. Risk mitigation is also involved in the supply chain management issue. Along with this, changing marketing trends also influence the purchasing power of customers. Due to high demand of the retail products and services, the firm is unable to maintain adequate inventory within the organization. The success and growth of the firm depends on the sales and revenue. Due to changing in the tastes and preferences of the customers, Woolworths is unable to store the inventory within the organization. Furthermore, the firm is unable to buy raw material at lower prices it may influence the long term success of the company. Woolworths is not focusing on the quality of retail products and services. As a result, the customers buy the competitors products and services. In this way, it is the biggest and significant issue for the organization (Fernie & Sparks, 2014).

Operation management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods and services. Forecasting is one of the biggest issues in the operation management which could influence the function of Woolworths Company. Due to forecasting issues, the company is unable to determine and analyze the tastes, preferences and choices of the customers in the marketplace. In addition, planning is another factor that affects the productivity of the firm. Due to poor planning, the firm is failed to produce and design the products and services according to the choices and preferences of the customers (David, 2011). Moreover, the firm is not able to maintain to effective and proper communication due to poor and ineffective workforce. They are not giving full contribution for improving the productivity and performance of the firm. Unethical behavior and activities also influence the production of Woolworth’s group. The company faces competition in the marketplace due to globalization and climate change. It also affects the prices of the products and services. The managers and top management are not able to find and identify the tastes, preferences and requirements of the customers due to change in marketing trends. Along with this, effective and sustainable human resource management is not maintained by the company which affects the policies and strategies of the firm. Moreover, the firm is not provided sufficient room to store the goods in the warehouses. Due to poor HRM, the organization is unable to appoint skills and potential employees within the organization (Drucker, 2012).

Challenges in inventory management and supply chain

There are various information issues in Woolworths group that affect the sustainability and image of the company. Information technology is one of critical issues for the firm. The firm is unable to use unique and effective technologies while producing new and innovative products. It influences the buying behavior of the customers. Due to poor technology and software, the firm is unable to provide right and appropriate information to the customers in the international market. There is a discrepancy between what consumers want and what retailers can render is the biggest than ever, which leads to issues with inventory. Due to information issue, most of the customers buy the products online and pick them in store in order to avert shipping cost. Along with this, the company does not use sales techniques to increase and enhance the sales and revenue. The changing economic environment also influences the new technologies and software’s within the organization. Along with this, RFID technology is not used by the firm while producing the products and services. Sometimes, the employees do not provide all the information related to the product quality and features. It may influence goodwill and financial position of the firm adversely in the marketplace. Collaboration between the leaders in an organization is also changing rapidly in the competitive world. The firm is unable to protect the customers data are especially vulnerable to legal risk. Furthermore, the firm is unable to provide knowledge related to the E-Learning and E-commerce. Therefore, the customers are failed to get all the information related to the quality and features of the products (Reinartz, Dellaert, Krafft, Kumar & Varadarajan, 2011).

Woolworths Company is dependent on the manual processes to produce the products and services. These manual processes are time consuming and require more resources. In this way, it is the major challenge for the organization. These manual processes are unable to find the requirements and orders of the customers effectively. Hence, the company is not monitored on these potential scenarios and interactions. As a result, it affects the financial performance of the firm. In addition, the firm is unable to maintain coordination and cooperation among the employees due to integrated business system. Moreover, if the company integrates the technology then various challenges are faced by the organization such as rising cost issues and training issues. Technology and supply chain integration is not possible without training and development coaching. Training and development coaching must to provide knowledge to the employees related to the technology advancement. It also increases the cost of the company because the firm has to invest huge amount on training and development that could affect the outcomes and revenue of the firm. Inventory system is also affected by the integration in technology. Apart from this, the organization is unable to fulfill the demand of the customers and it also affects the order management of the corporation. All these issues are faced by Woolworth’s group while integrating the new technology and supply chain management within the organization. Integration also increases absenteeism issues in the firm because workers do not accept new technology and process.

Globalization and impact on inventory management

Various sustainability issues are faced by the firm including energy use, wastes, land contamination, waste water and water quality and hazardous material use. These are significant issues in Woolworth’s group that affect the sustainability of the company. Deforestation also affects the activities and operations of the company. Deforestation not only affects the growth of the firm but also it is a biggest threat for the earth. In addition, the firm is wasting the water and energy that could affect the sustainability of the firm (Benn, Edwards & Williams, 2014). Each and every factor of earth is contributing in global warming that influence the growth of the retail company (Brown, Harris & Russell, 2010). Due to global warming, the temperature of earth is increasing day by day which has become major challenge for Woolworth’s group. Sustainability issues direct affects the supply chain management of the company. In addition, pollution is one of the biggest sustainability issues which have a direct impact on the progress of the organization. Due to pollution, various gases and toxins released by the company in the environment as it affects the health of people adversely. Global warming can also trigger a higher demand for energy. Climate change has negative effects on retail industry because it increases temperature of the earth. It also affects the performance and efficiency of the workers adversely. Due to these issues, the company is unable to follow corporate social responsibilities within the organization (Zokaei, Lovins, Wood & Hines, 2016).

Woolworths uses effective and unique procurement and supply chain management to save the resources and capital. Procurement is a process and method by which items and stocks are bought from outside vendors. Managing the ordering, review, receipt and approval of items from suppliers are included in the procurement and supply chain management process. The procurement and supply chain management helps to beat the rivalries in the global market (Wahyuni, 2010). The firm uses tradestone’s merchandise lifecycle management platform to deal with its supply chain within the organization. It is one of the optimized value chain processes for Woolworth’s group. Under tradestone’s merchandise lifecycle management, the company uses RFID technology. RFID (radio frequency technology) renders an inclusive control over the entire flow of products and services (Sarac, Absi & Dauzère-Pérès, 2010). It is significant to track and recognize every single item while allocating the products from the warehouses and stores to retail store. By using RFID technology, the company does not require to contract for operations and activities. The firm can trace their supplier’s products in a real time. This system also helps in internal material management system by improving the distribution center operations and activities (Hugos, 2018).

The tradestone offers a platform for the business activities and operations to handle orders, B2B sales, suppliers and financing. It interconnects with enormous suppliers in the world. This management also helps to handle all the problems and issues related to the food and beverages. Therefore, the company uses tradestone platform to manage and control the procurement and supply chain management. The key strategies which are involved in merchandise life cycle management have been detailed below.

Operation management challenges

Strategic planning: In this stage, the company focuses on the planning process to attain goals and objectives. SAP solutions help streamline merchandise life cycle processes so retailers can make effective and unique merchandise decisions. 

Merchandise and assortment planning: SAP solutions are unable to define the networks, channel, plans and merchandise with including place holders for new styles. Actions and events can be distributed for sales, and maintaining margin at all level of the management.

Promotion planning: Promotion planning plays a significant role in Woolworths Company to maximize buyers in the global marketplace.  In addition, performance detail can receive easily provide to support for implementation of vendor rebates.  

Life cycle pricing: SAP (system application and product) helps the company to handle and control the trade-offs between profit, returns and price image and keep the prices that provide support a retailer’s brand strategy. Along with this, life cycle pricing helps in setting the suitable prices of the products and services in the competitive market.

In this way, it assumed that the company uses tradestone’s merchandise lifecycle management platform in the supply chain management to analyze and evaluate the demand, choices, needs and requirements of the customer’s widely. By using this platform, the firm is unable to destroy the competitors in the marketplace (Aaker & McLoughlin, 2010). In addition, Woolworths uses effective and unique business strategies to gain rivalries benefits globally. Apart from this, unique inventory management is used by the firm to provide satisfaction to the customers. In addition, the firm initiates the vendor managed inventory (VMI) for managing the products and services in the stores. It will to beat and hit the competitive in the international market. In this way, it can be said that the firm uses unique and strong supply chain management within the organization to increase the number of customers globally (Blanchard, 2010).

It is seen that enormous challenges are faced by Woolworth’s group in Australia. Now the company focuses on its operations and activities to issues related to the supply chain, inventor, integration and sustainability. The firm needs to focus on the distribution and transportation system to avert and eliminate the sustainability issues within the organization. Green supply chain management shall be used by the organization. Green supply chain management helps to reduce negative impact of energy and it also reduces the wastage of water. Effective packaging strategies shall be used by the organization to attract the products and services in the global market (Farahani, Rezapour & Kardar, 2011). Along with this, the corporation should focus on the reorder products and services to fulfill the demand of the customers. In addition, volume of the product shall be checked by the company to reduce operation and supply chain issues. In addition, the firm needs to adopt the business operating model to forecast the demand of the customers. Along with this, integration planning must be done to integrate the new technologies. Woolworth’s group should focus on the supply chain network to explore and flourish the business globally (Mangan, Lalwani & Lalwani, 2016). Employees is considered the main assets for the firm therefore, the company should measure the performance of the workers. For this purpose, performance management system shall be adopted by the organization. The organization should also motivate and encourage the workers for performing tasks and job effectively and successfully. Proper training and development session must be held by the corporation to increase potential and efficiency of the workers (Bourne & Bourne, 2012).

Information technology issues

All these improvement programs help to attain long term goals and objectives of the firm. The employees are essential key source for the firm, if they do not work effective and efficiently then it influences the success and productivity of Woolworths group. No company can attain its long term goals and objectives without an effective workforce. In this way, training and development coaching helps to improve and develop the efficiency of the workers for attaining these desired goals and objectives. In this way, employees play a critical role for bettering the results and outcomes of the firm. Supply chain management also helps to reduce the cost of the products and services (Rushton, Croucher & Baker, 2014). Effective and strong supply chain and procurement management helps to increase the sale of the organization. Rising in the sales helps in maximizing the profitability of Woolworth’s group. Inventory management ensures the sufficient level of inventory in the warehouse, as it helps to make a brand image in the minds of the customers. The corporate social responsibilities can be carried effectively by implementing the sustainability strategies within the organization. If the company provides right and adequate information to the customers then it will increase and enhance the loyalty and trust of the customers in favor of the organization. It will also increase the satisfaction level of the customers.

Conclusion

On the above discussion, it can be concluded that Woolworths is one of the biggest brands in the world. The firm is dealing in retail products and services across the world. In today’s era, various issues and challenges are faced by the organization in Australia. Supply chain and procurement management, inventory management and lean system are main issues which affect the sustainability of the organization. Apart from these issues, integration and information issues also exist in the organization that has direct impact on the productivity of the firm. To overcome these issues and challenges, the organization uses effective supply chain and inventory management. Along with this, unique and dynamic strategies are being used by the company avert and eliminate these issues in the marketplace.

References

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