Woolworths Supply Chain - Case Study Example

Woolworths Supply Chain Name Course Name and Code Instructor’s Name Date Table of contents Table of contents 1 How rfid might be applied to the supply chain of Woolworths 2 Introduction 2 Woolworth’s company background 3 Methodology 3 Advantages of RFID technologies 3 Importance of accuracy of Woolworths in fruit supply chain 5 Characteristics of RFID tags 6 Disadvantages of RFID 7 Future improvement of Woolworths 8 Conclusion 8 References 9 How rfid might be applied to the supply chain of Woolworths Introduction SCM (Supply Chain Management) is the process by which information and materials are managed and controlled from acquirement of raw materials to delivery. SCM is the key to many organizations future success as well as market survival. RFID is a technology that has been embraced by different organizations in supply chain management. RFID has higher advantages than bar code technology. However, it is expensive hence many organizations are not able to embrace it currently. This paper will discuss how RFID might be applied to the supply chain of Woolworths. Woolworth’s company background Woolworths limited is one of the largest supermarkets in Australia which involves supply of fresh produce. Woolworths maintains more than 700 supermarkets and uses a wide range of technology in its supply chain. However, some of these technologies are very expensive hence challenging the company. Technology vendors used by Woolworths include telecommunication companies, integration specialists and RFID tag suppliers. The aim of these vendors was to inform Woolworths on the importance of adopting RFID while Woolworths will determine which vendor is offering its services at a cheap price. This is as a result of Woolworths having invested a lot in tagging (Goldman and Crawford, 2003). Methodology To ensure RFID worked effectively in Woolworths, a research needs to be carried out by the project managers since it’s a new technology. Information must be collected from the existing sources as well as organization which have successful adopted RFID. Project managers will use qualitative content analysis as a method of data collection. Information from relevant sources such as vendor websites, journals and academic papers will be used. The information will be gathered, sorted and categorized depending on disadvantages and advantages. Likewise, interviews will be carried out which will involve employees in companies which have embraced the technology (Hickey, 2003). Advantages of RFID technologies RFID has various advantages to organizations which embrace it. They include the following: a. Automatic non-line of sight scanning RFID does not require line of sight to read its tags. Items do not require scanning which is a necessity in barcodes. This technology can be embraced by Woolworths in sale of fruits where they won’t require categorization. This will assist Woolworths in supply chain since RFID will be able to scan multiple products simultaneously. In addition, tasks such as scanning and checking incoming inventory which are labor intensive will be automated making work easier. Likewise, Woolworths will be able to check stock levels hence less out of stock incidences as well as lowering inventory costs (Kinsella, 2003).. b. RFID will help to reduce labor in Woolworths Installation of RFID helps in automating supply chain in companies. If Woolworths embrace RFID technology, its supply chain will be automated hence reduce labor in the company. Labor cost accounts for 45-75% of the company distribution costs. Use of RFID technology will reduce check in time for up to 90% hence ensuring the quality of the fruits is maintained. Likewise, order picking will be increased hence yielding more savings for the company. This demonstrates that the company will have high turnover due to reduced costs. Additionally, drivers will not have to stay at the weighbridge since it will be automated. c. RFID enhances visibility RFID technology provides detailed and accurate information on all items which allow usage of this information hence efficiency. RFID visibility helps in reducing supply chain losses, reduces products wastage, and improves safety as well as lowering inventory levels. RFID improves visibility in supply chain which assists in reducing inventory levels as well as handling costs. Use of RFID in Woolworths, inventory visibility will be improved hence faster customer response demands. Likewise, it will improve the market trends for Woolworth’s fruits since the right products will be placed at the right place and at the right time. Retailers of Woolworths will be able to track their stock due to RFID tag receivers. d. RFID assists in tracking assets and returnable items RFID technology assists in identifying items which require regular checkup. Use of RFID technology in Woolworths will help in tracking its assets since the tags are undetectable. Likewise, it will assist in tracking the movements of the assets hence improving their utilization in the company. RFID keeps container history hence helps in identify when the goods were packed. This will help Woolworths to reduce wastage of fruits which go bad easily (Hall, 2004). Importance of accuracy of Woolworths in fruit supply chain Accuracy is an important consideration in supply chain in any organization. There are different areas where accuracy needs to be considered to enhance business in Woolworths. These areas include item level tracking and traceable warranties and product recalls. 1. Item level tracking Item level tracking is one of the tedious processes in supply chain. Achievement of item tracking in supply chain assist in product re-ordering as well as physical inventories in taking shorter time. Item level tracking aids in theft detection of products in supply chain. RFID has scanners which are placed in shelves to monitor stock. This will enhance accuracy in fruits products in Woolworths. Item level tracking allow management system to store and identify expiry dates of products in the shelves. This will reduce wastage in Woolworths (Lawrence, 2004). 2. Traceable warranties and product recalls RFID improves accuracy since products are easily identified in supply chain. This allows manufacturers to obtain access to information required to issue targeted products. This allows suppliers to constantly maintain strong brand. Products that require replacement are identified and replaced before expiry date. Fruits are highly perishable. Tracing of the products is required to ensure customers do not consume expired products. Use of RFID in Woolworths fruits supply chain will ensure customers get the right products (Fowler, 2003). Characteristics of RFID tags RFID tags have different characteristics that make them reliable in supply chain. 1. Quality regulation and control Tags are able to monitor the tampering evidence, bacteria levels as well as temperature of the products in supply chain. This ensures the good quality of the products which lowers the chances of customers receiving poor quality products. Use of RFID tags helps in monitoring of products without individual inspection of the product. 2. Factory, warehouse and yard management RFID technology has improved factory, warehouse and yard management. RFID tags are placed in yards, warehouse and the factory which detects automatically the products before they are distributed. This maximizes utilization of resources and assets in the company (Byrne, 2004). 3. RFID tags improves inventory management RFID tags helps in lowering handling and distribution costs which provides accurate information of the products. Likewise, it helps in forecasting distribution. 4. RFID helps in improving security It is impossible to forge RFID tags hence making it reliable. RFID tags prevent theft in supply chain, distribution centers as well as retail stores. Use of RFID tags in Woolworths will prevent theft in the supply chain hence improve the profit margin. Disadvantages of RFID Despite RFID technology being efficient and reliable in companies it has several disadvantages which require to be considered. 1. RFID technology is expensive RFID technology is expensive which makes it expensive to be deployed in SCM. Tagging all the products in the company is a challenge to the organization. This makes companies to use RFID tags in only sensitive cases. 2. Equipment and software upgrade is expensive To install RFID technology, software’s related and equipment require upgrading to fit its needs. This makes the companies to invest a lot in implementing the software. Likewise, it has made it difficult for other companies to adopt the technology. 3. RFID do not offer privacy to customers RFID technology is reliable in offering security to the products. However, it does not guarantee privacy to the customer details. This becomes a challenge to the technology since consumers can boycott the products if they realize privacy concern issue. RFID technology does not have a way of turning off the tags once the goods have been purchased. Future improvement of Woolworths Use of RFID technology will improve Woolworth’s companies if adopted in supply chain of fruits. Use of this technology will improve the responsiveness of the customer as well as expand market demands. In addition, there will be efficiency in warehouse through voice recognition. Likewise, supply and demand will increase due to more emerging markets (Spiegel, 2004). Conclusion SCM (Supply Chain Management) is the process by which information and materials are managed and controlled from acquirement of raw materials to delivery. RFID is a technology that has been embraced by different organizations in supply chain management. RFID has various advantages to organizations which embrace it which includes automatic non-line of sight scanning, reduce labor in Woolworths, enhances visibility and assists in tracking assets and returnable items. RFID tags have different characteristics that make them reliable in supply chain which include Quality regulation and control, Factory, warehouse and yard management, improve inventory management and helps in improving security. RFID has several disadvantages which include RFID technology is expensive, Equipment and software upgrade is expensive and RFID do not offer privacy to customers References Byrne, P., (2004). “Supply Chain RFID: Lesson Learned From a Leader”, Logistics Management, Highland Ranch, v.43, Issue (5), p.31-33. Fowler, D., (2003). “RFID Takes Stock of Supply Chain”, Network World, Framingham, v.20, Issue (23). Goldman, A. and Crawford, K., (2003). “Five Myths Exposed”, Tech Centre, USA. Hall, M., (2004) “Forget Wal-Mart”, Computerworld, Framingham, v.38, Issue (51). Hickey, K., (2003). “RFID Grew in 2002”, Traffic World, Newark, p.20-21. Kinsella, B., (2003). “The Wal-Mart Factor”, Industrial Engineer, Norcross, v.11, Issue (11), p.32-36. Lawrence, D., (2004). “Tracking RFID Progress”, American Printer, Chicago, v.232, Issue (4), p.16-17. Spiegel, R., (2004). “RFID Report”, Supply Chain Review Management Review, New York, v.8, Issue (4), p.62-63. Read More