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Strategic Procurement Plan

Business introduction and operation, service, or project

Woolworths Group Limited, a supermarket chain is an Australian public company. It derives its revenue from supermarket food and general merchandise sale (Van Kampen & Kirkham, 2020).  It employs around 210000 people and operates 1076 stores in both Australia and New Zealand. It has 115000 employees in stores, centers of distribution, and support offices for providing customers quality service, value, range, and convenience. The company deals in the grocery and retail business. The business model that Woolworths follow is the Lean Retail Model (Kasanagottu & Bhattacharya, 2018).

 

 

Executive Summary

This report is elaborating about the procurement strategy of Woolsworth Company of Australia. it includes all the aspects of procurement strategy. Procurement objectives help in making the business profitable. Although it is a long process but if company does it effectively and with planning it can be easy. Procurement can be done by setting objectives and assessing the risk in advanced. Procurement targets should be achievable.

Procurement Objectives

Procurement

objective

Description Priority Ranking Discussion
Innovative approach The innovative approach will aid in maximizing opportunities.

 

High High Innovation is the key to survival. sticking to the same old pattern wouldn’t give you anything. Customers will switch on to other brands if there would be nothing new in your given product.
A timely check over the market To survive in the market it is important to maintain regular contact with the market.  High   For existing in the market, it is important to have an eye over the market and the competitors.
Supplying and delivering items on time. Timely supply and delivery are a must for suppliers so that there would be no deficit of the product in the market. Whenever the customer needs the product will get it. Medium   It is very important to be punctual and deliver items on time as it would hold the supplier and aid in maintaining good relations with them.
Innovation       – outcomes Innovation and its outcome would be considered for further improvement in the business practices. Medium   Considering innovative outcomes would help in making future decisions.
Managing risks A company should know how to deal with the prevailing risks and mitigate them for the smooth running of the business. High   The ranking given is high because the management of risk will reduce the upcoming hurdles in executing and implementing the set project. For successful project implementation, it is important to manage the risks.
An idea of the estimated cost A proper budget and proper estimation of cost should be done. High   This is ranked high because it is important to manage the finances and work according to the given budget.
Certainty of time

 

There should be a specified time limit of the given target or project in which it would be completed.

 

 High    

Management of time and deadlines should be considered. As, there should be a given timeframe by which the task is being completed  (Thai,2017).

 

 

Procurement Targets

Procurement Function Description – how it can be achieved/how many/quality Due date if applicable
Sourcing The sourcing of data and raw materials from the market.
Negotiating terms Provide a set quotation accordingly.
Purchasing items Purchasing required items by considering all the required factors.
Receiving and inspecting goods While receiving the product a proper inspection should be done to check if the product received is defective or not.
Keep records of all the steps in the process It is important to maintain a record of all the processes and functions of procurement for mitigating any kind of risk and loopholes (Shin, et al.,2020).

Analyze key issue

Key Issue Description Technical solution
Managing expectations of the customer Customers are the king of the market. The ultimate target audience should be satisfied. Therefore, it is important to meet their needs and demands. Having regular market research and asking for customer feedback. Improving the quality of products and working on the feedback given by the customers. Asking suppliers about consumer behavior.
Mitigating risk Mitigation of risk can be defined as how risk would be tackled and the plans to avoid them. Making plans and identifying risks. A contingency plan could be made.
Maintain sustainability Sustainability means optimum utilization of resources while keeping future generations in mind. Customers are now aware of environmental issues. Maintaining sustainability is the demand of the present time
Maintain quality It is important to maintain the quality of the product for getting the trust and faith of the customer in the brand. Getting regular feedback from customers and suppliers for quality checks. Considering and implementing the required process if needed.
Manage suppliers Managing suppliers and a regular check on them to maintain good communication. By maintaining a proper communication with them.

 

Policy context

Government procurement is the process by which the government acquires the goods and services it needs by purchasing from commercial businesses. Since agencies of the government use taxpayer money, there are several regulations on how to use it properly and responsibly.

The process of acquiring goods and services through buying from commercial businesses by the government is called government procurement. There is plenty number of rules, regulation, and policies for the same. They are-

DFAT Procurement Policy

This policy has 2 acts-

The Public Governance, Performance and Accountability Act 2013 (PGPA Act)

The Commonwealth Procurement Rules (CPRs)

Aid Adviser Remuneration Framework

Untied aid

Australia Indonesia Partnership for Reconstruction and Development (AIPRD)

Debrief policy

Complaints Handling Policy

Market Analysis, supplier analysis, spend analysis

Part 4A: Market Analysis

Woolworth is a retail chain or a supermarket in Australia. Woolworths deals in various retail products like stationery, meat, vegetables, packed food, fruits, pet food, DVDs, magazines, etc. it also serves online naming Woolworths online which provides home deliveries. For doing its market analysis it is important to consider the economic, social, technological, and legal factors in mind. They can be explained as-

Economic Factors:

The economic factors have a huge impact on the company whenever the economy hits ups and downs so does the company. Otherwise, the company is doing well in the market.

Social Factors:

The influence of society plays a major role in the overall performance of the business. Keeping up with the expectation is the most important aspect of all the time for surviving in the market. Woolworth always maintains the social factors and works for the same. It often launches attractive and attention-grabbing schemes for customers to make them happy. So that company and customer both will be benefitted.

Technological Factors:

Technological factors positively affect the company. Woolworth always keeps up with the latest technology by considering all the required points in mind like incentives needed in technology, advancement in technology, research, and development, innovations in technology, market-specific technologies, etc. this company always get benefitted by using the latest technology.

Legal Factors:

It is very important to follow the necessary legal requirements while establishing a successful business in the market. Woolworth has always been aware of this factor and considers all the required legal and political factors in mind. The major legal requirements that are currently met by Woolworth group are-

Health and Safety Laws

Consumer Protection Laws

Anti-trust Laws

Copyright and Patent Laws

By maintaining legal requirements, it would be easy for a business to process smoothly without any barriers.

Environmental Factors:

Woolworth believes in considering the environment and saving it from getting affected. Customers are now preferring eco-friendly products. Woolworth, keeping all the environmental factors in mind works accordingly. Sustainability and producing environmentally friendly products is the new demand of the market (Brander, 2018).

Part 4B: Supplier Analysis

Category Supplier 1 Supplier 2 Supplier 3
Food Quality of goods:

Good

Price:

Average

 

Delivery:

On-time

 

Quality of goods:

Good

Price:

Average

Delivery:

 

Early delivery

Quality of goods:

Good

Price:

Average

Delivery:

Delayed delivery

 

Clothing Quality of goods:

Good

Price:

High

Delivery:

Late delivery

 

Quality of goods:

Good

Price:

High

Delivery:

One time

 

Quality of goods:

Good

Price:

Mediocre

Delivery:

Early

 

Household items Quality of goods:

Mediocre

Price:

 

Delivery:

On-time

 

Quality of goods:

Low

Price:

 

Delivery:

Late

 

Quality of goods:

High

Price:

 

Delivery:

On-time

 

Cosmetics Quality of goods:

Mediocre

Price:

 

Delivery:

Early delivery

 

Quality of goods:

High

Price:

 

Delivery:

Late

 

Quality of goods:

Low

Price:

 

Delivery:

Late

 

 

Part 4C: Spend Analysis:

Opportunity analysis

the main focus of the company is on experience. Woolworths defined the opportunity analysis of its company to focus on the experience. Every retail chain offers the same thing specifically in value segments. Creating a difference in the mind of customers and being able to make their experience as best as it could be would be the best-described opportunity. By providing self-checkouts, AI assistance for shopping, personalized services, and loyalty schemes. Making an image of the company in the mind of customers by enhancing their experience with the brand will aid in retaining them. This makes a big difference from the supermarket and extra charges can also be included for providing extra services.

Project Service Delivery requirement

The factors that impact the procurement process are-

Analysis of market

Spend analysis

Needs analysis

Risk analysis

All of these facts are to be considered while making a procurement plan. If all of these factors are being established successfully then it can be said that the procurement process is achieved.

The critical factors which are responsible for project success are clearly conveyed to the respective shareholders.

It is important to address the foundational technologies, establish an end-to-end ownership process, and use external support wisely, maturing the key sourcing and areas of the procurement process which includes strategic sourcing, management of supplier relationship, and procure-to-pay.

The value for money can be measured by comparing it at the granular level which is the delivery cost of output (Spillan & Ling,2015).

Risk analysis

 

Identified Risk Responsible Likelihood Impact Mitigation Strategy
Operational risk Management High High Making separate management for managing operations and working on the area of improvement.
Competitors External environment and the management for not keeping up with the market. Medium High Keeping an eye on the market and working according to the needs and demands of the market.
Losing customers Suppliers and management Medium High By retaining customers through improved quality, providing a better experience of services, and increasing brand loyalty, and faith.
Sustainability Management High High Working on sustainability and implementing it in the working of the organization as it is high time to consider this factor. The government is also considering this factor (Majerník, et al.,2017).
Emerging technologies IT department High Medium To keep up with the advanced and new technologies and use the same.
Data breach Employees Medium High Maintaining strict confidentiality in the organization.

Agency capability and management arrangements

Woolworth follows three main principles-

Offering – Woolworth by putting customers as their first priority, and offering them what they want.

Growth- Woolworth believes in growth over time by using innovative techniques for meeting the expectations of the customers.

Efficiency- by proper management and organization of the lean retail model, this company believes in working efficiently.

The capability and the management of the company are basically customer-centered. The company uses an autocratic management style. It has a very strong brand identity and goodwill.

The company believes in providing the best experience to the customer for retaining them and working on the changing needs of the customers.

Procurement option evaluation process and outcomes

Evaluation criteria Importance      of

criteria

Ranking of Evaluation

 

 Retaining Flexibility in operations

 

 

It is important to be flexible in the overall workings as it will allow the business in responding promptly and effectively to changing environment and which in turn aids in enhancing the overall performance of the business.

 

 

Medium
Managing risks by reducing costs.

 

 

Mitigating and managing risk is a highly considerable factor as it enables the ultimate success of the prevailing project. By assessing risk, it would become easy for the business to manage the workings and achieve the set targets. It would help in getting good profits.

 

High
 

Considering the timeframes.

 

Any business needs to consider the deadlines and deliver the products on time. One should be punctual in their workings.  

High

Regular check over the market.

 

 

For better survival in the market, it is important to know what is the current market situation. For that, it is highly required to have an eye over the market. Medium
Money value to implement the project.

 

There should be enough finance to make sure that the project would be completed. The budget should be followed strictly and a contingency plan should be made in case of any mishappening. High

 

Using innovative techniques for each factor.

 

innovation aids in enabling a company to add more value to the respective business and ultimately aids in increasing revenue. It helps in keeping the business ahead of the competitors in the market.  
Certainty of budget in comparison to the previous budget.

 

For a better understanding of finance, how to use it, and where to use it, a company must have a set budget plan. For further improvements, the budget should be compared with the previous budget for making further improvements. Medium
Maintaining flexibility in the implementation process.

 

 

Flexibility in working makes employees feel more valued which aids in building trust, faith, and loyalty for the company. They will get motivated and would work more effectively and efficiently which will help in increasing revenue. Medium
Managing stakeholders.

 

For gaining mutual understanding regarding the goals and expectations of all the parties included, it is important to manage the stakeholders. Maintaining good communication with them would help. It would ultimately help in getting a successful outcome  (de Araújo, et al.,2017). High

STAKEHOLDER ENGAGEMENT PLAN

Stakeholder Identification (Name/Title/Position) Stakeholder Classification

(Internal/External)

Assessment Information

 

 

Potential strategies for engagement – gaining support and reducing objections Risks Communication Strategy Timing of Engagement
Budget owners Internal The budget owners figure outs the budget estimate by which there would be an assessment of projected funds of the company needed for the completion of a given project. By consulting the finance team

Keeping last year’s budget in mind

Making contingency

Plans.

Make a budget keeping all the related issues in mind.

There could be a mishappening due to which the budget can be impacted.

Incurring unwanted expenses exceeding the revere.

The issues and the risks can be resolved by making a contingency plan and by stickiest to the set budget plan.

Setting targets.

Justification for the budget made.

Implementation of the action plan.

Comparing feedback from actual outcomes.

The budget can be made quarterly.

It can be made in a period of 6 months.

It depends upon the company policies  (Silvius & Schipper,2019).

Suppliers External The purpose of this assessment is to shortlist the best suppliers among all. Assessing and approving potential suppliers by doing qualitative and quantitative assessments is called supplier evaluation. Maintaining good communication with suppliers.

Regular check on them.

Asking for feedback.

The behavior of suppliers with customers.

Unaware suppliers.

Lack of knowledge regarding the product.

Setting Clear Expectations to report and communicate things to

Knowing about Parts of the company and telling them about theirs.

Establishing Clear Measurement Required.

Giving respect to their ideas and their time.

 

Regular checking up on them, especially while launching a new product.
Finance team Internal  These policies often lack formal detail and institutionalization, and may not include best practices.

It reflects how the finance team manages their department by maintaining adequate policies in most of the key areas.

Conducting regular meetings.

Asking for feedback.

Providing them with set targets to work accordingly.

Lacking formal details.

Lack of institutionalization.

Not including best practices required.

A strong finance team should be made and a set target should be given for mitigating any future risk.

Prioritizing active listening and giving them chance to put their point of view.

Considering their point of view.

Knowing your audience.

Whenever required communicate non-verbally.

Generally, finances are made annually but they can be made for a specific purpose  (Smith, 2017).

 

References

Brander, C. (2018). Market Analysis for New Potatoes Varieties.

de Araújo, M. C. B., Alencar, L. H., & de Miranda Mota, C. M. (2017). Project procurement management: A structured literature review. International Journal of Project Management, 35(3), 353-377.

Kasanagottu, S., & Bhattacharya, S. (2018). A Review of Metro, Target, & Woolworths Global Business Strategy. International Journal of Mechanical Engineering and Technology, 9(7).

Majerník, M., Daneshjo, N., Chovancová, J., & Sanciová, G. (2017). Modelling the process of green public procurement. TEM Journal, 6(2), 272.

Shin, K., Yeo, Y., & Lee, J. D. (2020). Revitalizing the concept of public procurement for innovation (PPI) from a systemic perspective: objectives, policy types, and impact mechanisms. Systemic Practice and Action Research, 33(2), 187-211.

Silvius, G., & Schipper, R. (2019). Planning project stakeholder engagement from a sustainable development perspective. Administrative Sciences, 9(2), 46.

Smith, P. A. (2017). Stakeholder engagement framework. Information & Security, 38, 35-45.

Spillan, J. E., & Ling, H. G. (2015). Woolworths: An Adizes corporate lifecycle perspective. In Business History Conference. Business and Economic History On-Line: Papers Presented at the BHC Annual Meeting (Vol. 13, p. 1). Business History Conference.

Thai, K. V. (2017). Global public procurement theories and practices: An introduction. In Global Public Procurement Theories and Practices (pp. 1-14). Springer, Cham.

Van Kampen, T., & Kirkham, R. (2020). Assessment of the Supermarkets and Grocery Stores Sector in Australia: A Case Study of Woolworths and Coles using DEA and VAIC™. Journal of New Business Ideas & Trends, 18(1), 1-11.