The BMZ Academy @ 061 262
THE BMZ ACADEMY
@061 262 1185/068 053 821
BMZ ACADEMY 061 262 1185/068 053 8213
, The BMZ Academy @ 061 262
Table of Contents
INTRODUCTION ........................................................................................................ 3
QUESTION 1: Argue whether Woolworths should use many suppliers or not. Justify
your argument. ........................................................................................................... 3
QUESTION 2: [4 marks] As a supply chain specialist, explain to Woolworths the
importance of demand management and how it could implement it to curb shortages
in the future. ............................................................................................................... 5
QUESTION 3: [4 marks] Discuss how the role played by technology in the Woolworths
case impacted supply chain management positively or negatively. ........................... 9
QUESTION 4 [4 marks] Discuss what omnichannel is and how it has affected
Woolworths' inventory management system. ........................................................... 12
QUESTION 5: Describe the sustainable issues highlighted in the case study AND
discuss how the linkage between lean systems and environmental sustainability could
be addressed by Woolworths in the future. .............................................................. 16
CONCLUSION ......................................................................................................... 17
REFERENCES ......................................................................................................... 18
BMZ ACADEMY 061 262 1185/068 053 8213
, BMZ ACADEMY
INTRODUCTION
This assignment examines the supply chain challenges encountered by Woolworths,
as outlined in the provided case study. The questions explore key areas such as
supplier strategy, demand management, the impact of technology, omnichannel
inventory systems, and sustainability practices. The responses are grounded in
theoretical frameworks, supplemented by insights from academic sources.
QUESTION 1: Argue whether Woolworths should use many suppliers or not.
Justify your argument.
According to Keller (2004), determining the optimal number of suppliers for each
purchased item is a complex decision. While many sources advocate for single
sourcing of core materials and supplies to foster strong buyer-supplier partnerships,
this approach carries significant risks. Theoretically, firms should aim to use a single
or limited number of suppliers to build close, collaborative relationships with top-
performing suppliers. However, over-reliance on a single supplier increases the risk of
disruptions, such as plant shutdowns or the delivery of substandard products, if the
supplier underperforms.
The case study highlights that Woolworths is experiencing shortages due to "supplier
issues and heavy rains," indicating potential vulnerabilities in its supply chain. This
situation underscores the risks of relying on a limited number of suppliers. When one
or more suppliers encounter problems, the entire supply chain can be disrupted, as
evidenced by Woolworths' current challenges.
To mitigate these risks, Woolworths should consider diversifying its supplier base.
Relying on a single supplier makes the company vulnerable to issues such as
production delays, quality inconsistencies, or external factors like adverse weather
conditions, as seen in the case study. By engaging multiple suppliers, Woolworths can
ensure a more stable and reliable supply of products, even if one supplier faces
difficulties.
In light of this, it can be argued that Woolworths should adopt a multi-supplier strategy
to reduce risks associated with supplier-specific disruptions. Having multiple suppliers
BMZ ACADEMY 061 262 1185/068 053 8213Page 3 of 20
THE BMZ ACADEMY
@061 262 1185/068 053 821
BMZ ACADEMY 061 262 1185/068 053 8213
, The BMZ Academy @ 061 262
Table of Contents
INTRODUCTION ........................................................................................................ 3
QUESTION 1: Argue whether Woolworths should use many suppliers or not. Justify
your argument. ........................................................................................................... 3
QUESTION 2: [4 marks] As a supply chain specialist, explain to Woolworths the
importance of demand management and how it could implement it to curb shortages
in the future. ............................................................................................................... 5
QUESTION 3: [4 marks] Discuss how the role played by technology in the Woolworths
case impacted supply chain management positively or negatively. ........................... 9
QUESTION 4 [4 marks] Discuss what omnichannel is and how it has affected
Woolworths' inventory management system. ........................................................... 12
QUESTION 5: Describe the sustainable issues highlighted in the case study AND
discuss how the linkage between lean systems and environmental sustainability could
be addressed by Woolworths in the future. .............................................................. 16
CONCLUSION ......................................................................................................... 17
REFERENCES ......................................................................................................... 18
BMZ ACADEMY 061 262 1185/068 053 8213
, BMZ ACADEMY
INTRODUCTION
This assignment examines the supply chain challenges encountered by Woolworths,
as outlined in the provided case study. The questions explore key areas such as
supplier strategy, demand management, the impact of technology, omnichannel
inventory systems, and sustainability practices. The responses are grounded in
theoretical frameworks, supplemented by insights from academic sources.
QUESTION 1: Argue whether Woolworths should use many suppliers or not.
Justify your argument.
According to Keller (2004), determining the optimal number of suppliers for each
purchased item is a complex decision. While many sources advocate for single
sourcing of core materials and supplies to foster strong buyer-supplier partnerships,
this approach carries significant risks. Theoretically, firms should aim to use a single
or limited number of suppliers to build close, collaborative relationships with top-
performing suppliers. However, over-reliance on a single supplier increases the risk of
disruptions, such as plant shutdowns or the delivery of substandard products, if the
supplier underperforms.
The case study highlights that Woolworths is experiencing shortages due to "supplier
issues and heavy rains," indicating potential vulnerabilities in its supply chain. This
situation underscores the risks of relying on a limited number of suppliers. When one
or more suppliers encounter problems, the entire supply chain can be disrupted, as
evidenced by Woolworths' current challenges.
To mitigate these risks, Woolworths should consider diversifying its supplier base.
Relying on a single supplier makes the company vulnerable to issues such as
production delays, quality inconsistencies, or external factors like adverse weather
conditions, as seen in the case study. By engaging multiple suppliers, Woolworths can
ensure a more stable and reliable supply of products, even if one supplier faces
difficulties.
In light of this, it can be argued that Woolworths should adopt a multi-supplier strategy
to reduce risks associated with supplier-specific disruptions. Having multiple suppliers
BMZ ACADEMY 061 262 1185/068 053 8213Page 3 of 20
