The Supply chain is the connected network of the individuals, organisation resources and technologies which are involved in manufacturing and sale of the product. It starts with the procurement of raw materials to make it deliverable to end consumer. The strong control of companies over supply chain ensures efficient spending and gives competitive edge by acquiring strong standing in market and industry.
- What is the concept of Logistics and Supply chain management?
- How the Woolworth is using the supply chain Management for its meat products?
- Understanding the model of Woolworth meat supply chain and how it is helping them to achieve a competitive edge?
The Logistics is processed relating to the storing, distributing and transporting to the final destination. The term supply chain management is associated with the processes and management of business activities that transform the raw materials into finished products. Both the terms are used synonymously but logistics is just part of the supply chain management. The logistics are a small part of the supply chain which makes the flow of goods easier whereas the supply chain management refers to the efficient flow of goods right from point of origin to point of consumption. The supply chain management is related to the procurement of raw materials, conversion of raw materials and making it effectively available to the final destination by maximising the customer needs and wants. It emphasises on integrating the business supply-side activities in order to attain customer satisfaction and helping the organisation to cut the excess cost, thus achieving the competitive advantage.
(Illustration 1: Woolworth Supply Chain)
The Woolworth is an Australian retail chain of supermarket specialised in meat, groceries, packaged food etc. They acquire largely the Australian market. The company specialise in its operations largely owing to its efficient supply chain. The Woolworth meat is one such major product which drives increased revenue to company. The Woolworth maintains the effective supply chain which helps them in making the right product available at right time to customer. The company integrally work towards maximising the customer value and thus achieving the integrity in business operations.
The structure of the meat retail sector in Australia is concentrated majorly in hands of Woolworth and Coles. They incorporate such great integration by combining effectively the information system, adopting innovative operational practices and simplifying the flow pattern. The Woolworth meat industry works integrally to achieve economies of scale. The information is shared across all partners. The core guiding principle between the partners is trust and commitment. The relevance of information shared with partners increase the credibility of supply chain. The strategic alliances is made which helps in accomplishing the task more easily. The vertical alliances are made primarily by Woolworth to remain competent in meat industry. The Woolworth meat consist of four direct participants in system namely bird and animal production, meat processing, meat wholesaling/ retailing and end consumers. These are linked with the transportation, warehousing, packaging and grading, quality check. The Woolworth meat supply chain management consist integration of meat producers, meat processors and final consumer. The Woolworth owns fully integrated supply chain which includes cattle moving from farms to processing place. At these processors the meat is being extracted and being processed to make it make it organised for delivery. The Woolworth has made partnerships with the small firms that help them in processing to slaughtering. The processing and wholesaling requires the integration of larger firms but in retailing requires limited partnerships. The retailing is done through small butcher shops to large supermarkets.
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The Woolworth meat supply chain functions from upstream to downstream. In upstream the meat producers begin with the breeding and fattening functions. Then the meat slaughter is done and there are various internal operations included in the abattoirs function which includes trimming, ,weighing, chilling etc. functions. The meat is being made order ready to make it deliverable. Then the distribution stage comes. The Woolworth engages in retailing and wholesaling of meat in order to acquire the large market share. While wholesaling the considerable deadlines is met to protect the meat. Such as storing it in proper temperature and structurally labelling it. Then it is being distributed for further sale. Directstore delivery is being followed by the Woolworth meat supply chain. The Woolworth follows AUS-MEAT specialised distribution centres to distribute the meat regionally and internationally. The Woolworth uses the Standard Price Reduction and hold itself credited for selling the good quality meat. The vertical supply chain so followed with the suppliers helps in collaboratively working and distributing it. The quality information is shared with the partners by installing the Woolworth Online Reporting for Livestock Data, in year 2001. This helps in sharing the real time information with the partners. The processors can log in this system and ensure the tracking and delivery of the meat. The Woolworth decides an minimum price with its meat producers to ensure the fairness. This way it develops the trust and commitment between the partners which ensures the dedication of partners and thus, achieving the organisational goals.
(Illustration 2: Woolworth Meat Supply Chain Framework)
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They achieve grater competitiveness in market by ensuring proper utilisation of the value chain. The Woolworth sets the price of meat based on the incurred operation cost and by adding profit margin. They sets the price with producers in advance which is not being affected by the market factors. Lastly, they have used the information technology to connect whole supply chain partners in one nod. This ensures in grater efficiency as all functional; departments are integrated in supply chain. The Woolworth constant engagement in the technology results in achieving the long term sustainability. They ensure incorporation of every practice under set standards and ensure high quality.