Woolworths CaseStudy-Vunani-2012
3 likes4,871 views
Woolworths wanted to improve its supply chain sustainability and competitive advantage. It developed a strategy to vertically integrate its supply chain by taking ownership of primary transport from suppliers. Woolworths partnered with logistics companies to establish a Logistics Integration Centre to house advanced planning capabilities, provide visibility and reporting, and enable the supply chain integration strategy. Over time, Woolworths worked to increase supplier adoption, further integrate transport operations, and continue optimizing the supply chain through initiatives like scenario modeling, data improvement, and green initiatives.
![• Testimonials:
• Woolworths KZN DC Manager: “Fair Field have contacted me and [are] very
impressed with the thermometer that Imperial is using for probing product. So
much so they now are looking for the contact details of the manufacturer so
they can purchase one for themselves.”
• Key Supplier: “Thanks Johan, we are keen to make this work and would like to
finalise the operational detail as soon as possible. We would like May the 1st to
be the starting date if we can get everything in place in time.”](https://image.slidesharecdn.com/woolworthscasestudyvunani3oct12-121128060704-phpapp02/85/Woolworths-CaseStudy-Vunani-2012-20-320.jpg)
Woolworths CaseStudy-Vunani-2012
- 3. Woolworths Pty (Ltd) is a leading and respected retail chain • Over 400 retail stores, including franchise stores • Range of quality clothing, food, homeware, beauty and financial services (in partnership with Absa Bank) • Operations in South Africa, Africa and the Middle East
- 5. • Unsustainable / unreliable transportation solutions • Not cost-effective, limited collaboration between suppliers • Limited inbound / outbound integration • Limited visibility of operations and reporting capabilities
- 7. Woolworths wanted to achieve the following: • improved service levels to stores • competitive advantage • supply chain sustainability
- 9. Therefore they set the following strategy: • Vertically integrate the supply chain • Take ownership of primary transport (inbound from suppliers) • Improve tactical and operational planning and execution management
- 11. • In 2008 Woolworths, with assistance from Volition and IMPERIAL Logistics Refrigerated Services (ILRS), quantified the current logistics cost imbedded in COS • The result was a business case for Woolworths to also own the primary leg of the supply chain
- 13. During 2009 / 2010, the team modeled tactical scenarios to find ways to achieve the necessary efficiencies Integrating inbound / outbound distribution emerged as the most promising alternative It was agreed that a Logistics Integration Centre (LIC) should be established to: •House the advanced planning capabilities required to integrate the SC •Support reporting and provide granular visibility of operations •Thus be the key enabler of the strategy
- 14. Scenario Efficiency Ad-hoc Dashboards Modelling Tracking Analysis (KPIs, CO2 etc.) Values Operations 145.0 144.0 143.0 - 0.16 - - 1.75 Region Business NDC / DU Budget NDC/DU NDC / DU Sum of Volume Sum of 2011 Actual Sum of FY12 WW Sum of 2012 Actual Impact on Budget NDC Maxmead C&GM R 5.45 R 5.78 R 5.64 R 132 797 YTD Woolworths Costs (Rm) 142.0 3.09 141.0 Foods R 1.88 R 1.90 R 1.95 R -66 901 - 0.56 143.8 Maxmead Total R 2.38 R 2.40 R 2.49 R 65 895 IMPERIAL 140.0 - 0.40 142.0 139.0 Midrand C&GM R 5.99 R 7.10 R 6.43 R 390 797 139.6 138.0 Foods R 2.80 R 2.87 R 3.01 R -637 349 137.0 2012 WW Budget Adjust for volume Adjust for Add fuel Additional vehicle YTD FY12 Internal efficiency 2012 WW Actual Midrand Total R 3.04 R 3.15 R 3.25 R -246 553 Net Distribution distance surcharge shortfall baseline YTD Cost Montague C&GM R 1.89 R 2.03 R 2.05 R -41 593 (TMS, Key- Costs Foods R 1.81 R 1.98 R 1.88 R 626 933 Montague Total R 1.82 R 1.99 R 1.90 R 585 340 Grand Total R 2.63 R 2.76 R 2.79 R 404 683 Nuggets) Woolworths (Triceps, Extract, Repository Cognos, SAP) • Activity-based allocation of actual and Transform, budget costs (for FY2011 and FY2012 YTD) & Load – • Per site, Foods and C&GM, per store, per External Including Data supplier, per discipline Benchmark Scrubbing and • Inbound, outbound & trunking Calculations • Supplier cost determination Data • Enabling competitive advantage and sustainability
- 16. Routing and scheduling tools for tactical planning…. ….translated into executable plans
- 18. • Supplier adoption activity has been increasing since 2009/2010 • Development on a Logistics Integration Centre started in late 2011 with: • Dashboard reports • Data repository (provides additional granularity and analysis capabilities) • Advanced planning and reporting capabilities (start of planning office) • “Operationalisation” first half 2012: • Tracking YTD efficiencies, taking corrective action • Integration of outbound transport • Continued supplier adoption
- 20. • Testimonials: • Woolworths KZN DC Manager: “Fair Field have contacted me and [are] very impressed with the thermometer that Imperial is using for probing product. So much so they now are looking for the contact details of the manufacturer so they can purchase one for themselves.” • Key Supplier: “Thanks Johan, we are keen to make this work and would like to finalise the operational detail as soon as possible. We would like May the 1st to be the starting date if we can get everything in place in time.”
- 22. • Involve suppliers in the journey upfront • Don’t under-estimate the importance of change management • Support from Exco levels • Ownership to drive the process • Fair compensation / remuneration between supply chain partners to ensure win-win…drives correct behaviour • Support for- and understanding of longer term vision rather than short term gains
- 24. All parties remain engaged on initiatives to support supplier adoption and broader supply chain improvement: •Further integration of transport •Tactical modeling of supplier adoption impact on primary, trunking and secondary •Establishment of planning office •Equipment centre optimisation •Master data improvement •Improving DC labour planning and control •Green Supply Chain initiatives