Discuss about the issues raised in this case of Woolworths Limited relateed mainly to the use of different sets of inventory management systems and coordination processes.
Woolworths Limited is a public limited company founded on 22nd September 1924 that deals with retailing of general merchandise such as household items, office equipment and other materials that are used by consumers on a regular basis. The company has a large network of outlets within Australia which makes it accessible to people all over the country. The firm is ranked as one of the best retail outlets which are reflected in the overall sales and production of the firm. The firm also controls the online retail market with its stores offering an option for buyers who wish to purchase online (Vesty et al. 2017). Since it’s a large company the revenue from sales is the second largest after Westfarmers. The firm has over the years encountered an upward rise in the retail industry because of the rapidly growing economy that has enabled households to have enough money to spend within the country. There have been transformations in improving operations and the adoption of different processes and strategies such as the adoption of inventory management systems to help in regulating and managing of stock. There have also been transformations that have led to the embrace of information technology which yielded the acquisition of accounting software for the management of finance and monitoring the stock movement within the organization. The major issues raised in this case relate mainly to the use of different sets of inventory management systems and coordination processes (Lyons, K. 2007).
The organization boasts of a clear chain of command that allocates duties and responsibilities to different members of the community. The organization is managed by an overall chief executive officer who is in charge of operations within Australia. The CEO is assisted by departmental heads at the central office who are mainly the financial officer, the procurement officer, sales and marketing head and the human resource office in charge of internal operations (Ismail & King 2014). The chain further breaks down to the respective store managers who control operations in their respective centers and report to the overall head. The branch manager is assisted by subordinates who help in the running of activities within the center. The organization relies on a decentralized management approach that has enabled the empowerment of different managers who help in coordinating activities within the region (Federici 2009).
The first goal of the organization is customers comes first across all their brands. The firm prioritizes the customer by building a customer and employee culture and team. Providing value in their products such as drinks to be able to provide convenience to customers, Generating sustainable sales momentum in food. Delivering shareholders value by empowering the firm’s portfolios to implement strategies. Lastly, by being a lean retailer the systems and processes used provide excellence service to the customer. The firm advocates building a team that listens to their suppliers, team members and further customers and thus a continuous improvement of shopping experiences to the customers.
The current structure subjects the organization to a myriad of challenges arising from the daily operations of the company. Firstly, the process limits decision making which makes it slow to decide on issues. The organization encounters a slow decision-making process because of bureaucratic process that delays the process due to the need for approval and validation (Smit et al. 2017). Secondly, errors occur on a regular basis because of the system. The decentralization approach allows for different units to operate at an individual level so as to allow for the organization to flourish and progress. Lastly, the overall performance of the organization is derailed by failure arising from one unit (Arli et al. 2013).
The idea system of acquisition for the organization is likely to be custom software. The process involves the provision of specifications by the company on how the firm wants its software to appear and the problems that it seeks to remedy. Custom software is applicable in this case because of the unique format of the organization and its giant size which may have extra needs to be fulfilled in the development of an ideal accounting software.
Systems flowcharts are used to show a process in which several individuals in a departments and other functional areas are involved in the organizations day to day activities. It’s also important to note that it’s sometimes very difficult to keep track of the different responsibilities of different people. The flowchart is divided in columns to be able to do an analysis of the number of times a process is ‘handed over’ to different types of people and departments. It also shows the relationship between departments and a business process.
This flow chart above explains the systems flowchart for clients who buy via the website, mobile app, virtual stores any other delivery option.
Above is a flow chart of when a customer gets into Woolworths retail store goes around looking for the items that thy want. After picking everything they need the customer heads to the counter where they will pay and their items packaged. Further the firm have made recent improvements like making big packing bags, more half sized trolleys, updated store directories in the aisles of the store and clearer information about fresh foods, all these for customer satisfaction
The control problems the system used by the organization is likely to incur include system downtime that may arise from a large number of users accessing the system at the same time. The organization’s decentralization approach may also be a problem in developing and running a software that cuts across the different departments. Accounting errors such as double entry are likely to be generated which may cost the organization a huge sum of money. Bandwidth challenges may also emerge because of the systems complexity and the large database that the system will be managing. The integration is likely to affect the systems overall performance (Burch & Goss 2009).
The development and adoption of accounting software and packages require a clear-cut plan that focuses on different aspects of the overall business. Based on the idea fronted the development should seek to mitigate the possible challenges that may emerge such as system breakdown and errors in financial calculations. As a means to arrive at the ideal solution a stable database should be set up and also the organization should avail all the necessary information required for the research and development.
Woolworth limited boasts of a large market size in Australia that are mainly household consumers of retail products. The firm also does liquor retailing alongside other household items which makes it a key player in the industry. The market size, in this case, comprises of middle-aged consumers who are the main users of the company’s products. The market size for household consumers can be estimated to be around 5 million people from within the country who buy the organizations products on a daily basis (Rompho 2011). The market of the organization also extends all the way to neighboring New Zealand.
As much as Woolworth enjoys the position of the market leader it faces stiff competition from retailers such as Coles who deals with a range of items used by households. Coles enjoys a competitive advantage because of its focus on the utilization of the internet as a niche for its survival. The company has a fully functional automated system that allows members to place orders, therefore, making the organization to sustain itself economically. The market leaders also enjoy a large market share which makes it difficult to compete fairly in the market (Dixit & Prakash 2011).
The system encounters several gaps such as errors arising from the side of the company and the customer as well. The system has major issues in accommodating a large number of orders at once which in most cases affects its productivity. The system also has a major gap in harmonizing records in the inbound logistics section and the outbound logistics section. The main reason is that the system fails to take into account the materials that are leaving the organization which makes it a challenge in balancing books of account and recording of financial records (Pritchard 2000). The ideal recommendation to remedy the issues should include the use of an integrated system that incorporates inventory management to help in tracking materials that are entering and living the system. The sluggish system response can also be addressed through reprogramming the software to provide more routing points for the use of materials and issues that arise from the process. The developer should also consider adopting the use of a large server that can accommodate many users at the same time. The user interface should also be adjusted to accommodate a large number of customers at the same time.
List of References
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in
supplychain collaboration. Journal of Economics, Business & Accountancy Ventura, 16(1).
Burch, D. and Goss, J., 2009. Global Sourcing and Retail Chains: Shifting Relationships of Production in Australian Agri?foods. Rural
Sociology, 64(2), pp.334-350.
Dixit, A.K. and Prakash, O., 2011. A study of issues affecting ERP implementation in SMEs. Researchers World, 2(2), p.77.
Federici, T., 2009. Factors influencing ERP outcomes in SMEs: a post-introduction assessment. Journal of Enterprise Information
Management, 22(1/2), pp.81-98.
Ismail, N.A. and King, M., 2014. Factors influencing the alignment of accounting information systems in small and medium sized
Malaysian manufacturing firms. Journal of Information Systems and Small Business, 1(1-2), pp.1-20.
Lyons, K., 2007. Supermarkets as organic retailers: Impacts for the Australian organic sector. Supermarkets and agri-food supply
chains: transformations in the production and consumption of foods, pp.154-172.
Pritchard, W.N., 2000. Beyond the modern supermarket: geographical approaches to the analysis of contemporary Australian retail
restructuring. Geographical Research, 38(2), pp.204-218.
Rompho, N., 2011. Why the balanced scorecard fails in SMEs: A case study. International Journal of Business and
Management, 6(11), p.39.
Smit, R., Kingston, P., Wainwright, D.H. and Tooker, R., 2017. A tunnel study to validate motor vehicle emission prediction software
in Australia. Atmospheric Environment, 151, pp.188-199.
Vesty, G., Sridharan, V., Northcott, D. and Dellaportas, S., 2017. (In Press) Burnout among university accounting educators in
Australia and New Zealand: Determinants and implications. Accounting and Finance, pp.1-23.
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