The report discusses about enterprise implementation system in the economy, aligned to the activities of all kinds of firms. The report majorly focuses on the usage of enterprise system by large firms. Woolsworth which is recognised as the leading retailer of Australia faced numerous problems due to insufficient IT software. The inclusion of updated facilities and softy wares to centralise the data base of information used by the company was the first step towards recovering from its losses incurred in 2015. Therefore, the Customer relationship management, supply chain management and enterprise resource planning was improved with the implementation of enterprise system in Woolsworth company’s branches and retail locations.
Table of Contents
In the economy of globalized industries where the size and power of forms varies on a large scale. In order to strive amidst the competitive rivalry the concept of enterprise systems was adopted by all kinds of firm’s mostly large ones. Enterprise systems in nothing but a centralised database to reduce manual labour to monitor and evaluate operational activities (Appelbaum et al., 2017 p33). It helps in the storing of all kinds of useful business data in usable format for further usage. It also helps in the standardisation of business activities, reduces costs, improves supply chain management and increases the effectiveness of IT infrastructure to provide up to the marks consumer services. In this report, the nature of enterprise systems would be discussed in context to Woolsworth Group Limited. Following this would be the identification of risk with the inclusion of supply chain management efficiency. An assessment of the success rate of applying the solutions derived from Enterprise Systems would be provided as well. Woolsworth group is recognised as the largest retailer in Australian subsector of food and groceries. The firm was established in 1924 and has 995 stores within Australian border (Woolworthsgroup.com.au, 2020). It employs 201,000 members to serve its customer base of 29 million across the entire globe. They are well known for delivering affordable value and good quality of their products and services (Woolworthsgroup.com.au, 2020).
For any large firm or enterprise describe the nature of the Enterprise Systems that the organization adopted to improve or maintain operational efficiency, improve customer/supplier intimacy, improve decision making, create new products, services and business models (i.e. to innovate) and to gain a competitive advantage
The biggest barrier to conduct successful business in the economy is the challenge to manage the logistics activities efficiently. Large firms shall make sure that their all departments are synchronised for better and faster solutions to issues arising. The creation of a broader link establishes connection in between departments which results in integrating and applying business models within a framework provided by information software. This framework is identified as the nature of the Enterprise System, it provides support to the construction of an effective team, quick response to consumer feedbacks, and analysis of market trends (Panetto et al., 2016 p55). Great example of this concept is supply chain management, CRM - Customer relationship management and ERP - enterprise resource planning.
The Woolsworth Group Ltd retail company of Australia wavers to provide quality and valuable goods and services to its customers. In spite of being a successful large enterprise in the economy, it suffered from Major IT disruption in the year of 2015. It adapted a strategy where its diverse group of retail operations embark on a purpose led mission to deliver better experiences with effective teamwork. Their three pillars to conduct business is to focus on building a solid foundation, be consumer centric and putting their team members in a beneficial position, always. The company faced a massive amount of loss in revenue due to improper ERP software’s that disturbed the operational activities massively. In 2016, mid-year around august it claimed that the problem was fixed in the area of technology basics by implementing a 6 year plan of SAP - Systems, Application and Products in Data processing for the management of supply chain and product life cycle management (Itnews.com.au, 2020).
Woolsworth ended the year with a loss of 1.2 billion Australian dollars in fixing its ERP systems and this made them aware of the importance in investing to build solid, integrated IT infrastructure (Computerworld.com, 2020). The company used the same database system to manage payroll from last 20 years which caused this inefficiency in its HRM - Human resource management. The strategy of implementing the new ERP system - SAP with the cost of 200 billion Australian dollars gave a shock to its organisational structure and culture.
The transition of updating the ERP system was not reported to be successful, there were few flitches to be focussed at. The balance sheet including profit and loss statements were not available and will take 18 months for its generation. 766 million dollars was reported as related losses in annual reports (Inspirage.com, 2020). Due to the insufficient payroll system before, the company realised that its employees were underpaid and was caught in the lawsuit of ‘wage theft’ in Australia this year (Reuters.com, 2020). The CEO Brad Banducci, publically addressed this matter and apologised for the inconvenience caused. Therefore, this is why the company made its engagement with SAP to boost and influence robust human capital management. Woolsworth planned to apply this strategy with touch points of - Objectives to drive Performance, appreciation of talent and achievements, provision of learning programme and reward management (Reuters.com, 2020).
The biggest retailer company of Australia claimed that it’s improved IT support and Enterprise systems will be installed in each of its stores, to support its team members and help them to serve their customers better. It planned to upgrade the RF (Radio Frequency) guns or scanners and printers along with responsive support desks to manage transactions (Zdnet.com, 2020). The initiation to improve the dependency factor on IT infrastructure has led the company to improve on many grounds specially on becoming a retailer with end to end process and intelligent systems. Improvement has been noticed in the recent years for Woolsworth Company as it updated its Enterprise System.
Changes in CRM was noticed as the company broadened its measures to extract VOC (Voice of Customers) Net Promoter Score (NPS) (Woolworthsgroup.com.au, 2020). This ensured to capture all the positive and negative responses of consumer which helped the company to address the comments and be good and consistent in their operational activities. In 2019, this score improved by 3 points from the previous year score of 51 (Woolworthsgroup.com.au, 2020). It has also incorporated the usage of few metrics like VOT to measure the engagement and advocacy of team members which made the company a good place to work in its social presence. Another metric of TRIFR (Total Recordable Injury Frequency Rate) to ensure workplace safety of employees was introduced that resulted in 5% decline from 2018 (Woolworthsgroup.com.au, 2020). VOS known as voice of supplier is another metric that indicated a mixed response which got better in the end of the year. This was due to the inability to provide ordered goods to suppliers by BIG W - a subsidiary of Woolsworth Company in mid-2015 (Woolworthsgroup.com.au, 2020).
In the end of 2016, the company appointed a new Chief Information Officer, John Hunt to address the IT issues of the company (Itnews.com.au, 2020). He joined effectively from February, 2016. With his embracement in the new job role, the company was able to focus on its technological grounds as the SAP implementation programme suffered from strong hits of backfire in its operations. This enabled Woolsworth to execute their key principle of executing Lean Retail Model (Woolworthsgroup.com.au, 2020).
It also implemented a new technological change by experimenting in store innovation lab with the help of ThoughtWorks - which is global software consultancy (Thoughtworks.com, 2020). This allowed them to experiment new product and service ideas and its impact on consumers mind, followed by recording their real time responses as useful data. This method, reduced costs of innovation and developed a new working model for the company.
Therefore, it can be said that the introduction of new Enterprise system, affected the operating activities of Woolsworth on a large scale. The company noticed immense growth in its major activities and the logistics part improved as well. Woolsworth invested 200 million dollars in redesigning the IT infrastructure, which eventually paid off for the company as it is now on a different strategic direction towards achieving its mission and objectives.
Identify all risks including the dependencies on the firm’s supply chain that could affect or disrupt operations on the supply chain.
Woolsworth Group is a big company, therefore it is expected that it will have a complex chain of suppliers to manage its sales and income. It supply chain network is wide spread across Australia and international borders. The company as mentioned before is a large firm and this is why it is exposed to various kinds of risks. Thee risks can be categorised in to four parts - strategic, Finance, Operational and Compliance (Woolworthsgroup.com.au, 2020). The trading environment of retail will be in competition constantly and technology disruption along with threat of new entry would be consistent. Woolsworth tries to overcome this by implementing their Customer 1st culture and allowing itself to invest in the installation of new technologies in its physical outlets.
Any business needs financial support to run the operational activities. Therefore, the availability of enough funding and capital, liquidity and asset management is considered equally essential for grabbing the opportunities of growth. Woolsworth tries to mitigate this by implementing policies to maintain treasury which will allow to manage the solutions to answer financial risks if any (Woolworthsgroup.com.au, 2020).
Woolsworth has been a subject to risk in the criteria of operational activities since long. Therefore, it can be exposed to situations where the product quality fails to meets the demands of its consumers. The product safety standards are degraded, information technology systems are disrupted due to which data breach can occur resulting into chaos. The company tried to overcome the IT issue, by investing 200 billion dollar in it, which helped to manage the human capital of the company attentively. A business Resilience Framework is developed by the business to manage its operational errors and activities. It also has introduced a Compliance Framework and put it in action to facilitate external and internal protocols (Woolworthsgroup.com.au, 2020).
The company also responses to climate change risk which might affect customers, suppliers and operations widely. Woolsworth has committed to reduce its emission by 60 % in 2030 to mitigate the climate change risk (Woolworthsgroup.com.au, 2020). Other risks include the factors of employee dissatisfaction, disruption in supply chain and non-healthy relationship with important stakeholders. The Responsible Sourcing Program which commence in July 2018 states the approach adopted by Woolsworth while engaging with its suppliers. This program highlights the workers’ rights by providing those grievances mechanisms and tools for developing their onsite- level processing of sales activities. It sources directly from 400 suppliers, 96% of its fresh fruit (Woolworthsgroup.com.au, 2020). Hence, it indulges in training and briefing the supplier’s team so that clear establishment of roles and job duties is understood by them.
The company of Woolsworth manages its risks with three lines of accountability model. 1st line - Business shall own and manage risks, 2nd line - Oversight functions to set frameworks and general standards, 3rd - Independent Assurance frameworks set is provided and effectiveness shall be monitored (Woolworthsgroup.com.au, 2020). This has led to the approach of fair treatment when the situation of engaging with suppliers arises. The compliance adhered to Food and Grocery Code of Conduct is established and communicated clearly with their supplier chain. The VOS surveys and Supplier Speak Up program provides appliances to their suppliers to connect freely without any hesitation or fear (Woolworthsgroup.com.au, 2020). This policy covers the need of suppliers and the workers who are involved in the management of supply chain.
Woolsworth also introduced a new strategies system names SCoRe to improve the supplier delivery standards. The company achieved 1,800 suppliers using their system along with 1,500 issues solved regarding Pallet Wrapping. Four Thousand labelling issues were also resolved which improved in maintaining of transparency by the company (Woolworthsgroup.com.au, 2020).
Provide an assessment of how successful the adoption of the enterprise Systems was to reduce friction on the supply chain, i.e. to maintain operational efficiency, and a discussion of any success metrics that were used.
Woolsworth Company was using its old database and software system from past 20 years to manage its operational activities. When the company noticed lot of issues arising in the management of employees, customers, suppliers and in overall production, it realised that it has to reconstruct its IT infrastructure. It invested 200 billion dollars in SAP implementation program which was also not successfully installed and implemented. After that, gradually it was noticed that many metrics, frameworks and systems were incorporated to manage and monitor different aspects of the company. For example, VOS (Voice of Suppliers), VOT (Voice of Team), Supplier Speak Up programme, in store lab experiment with ThoughtsWork, Responsible Sourcing Program, and calculation of Net Promoter Score, the SCoRe system, TRIFR and lean retail model (Woolworthsgroup.com.au, 2020). These were all the tactic that was implemented by the company to increase the efficiency in overall activities of production and sales.
The newly adopted program that specifically will focus on supply chain management is TradeStore’s Merchandise Lifecycle Management platform. This platform will connect around 6000 suppliers. According to the company’s reports, it believes that TradeStone would be able to support more than 20,000 workers involved in supply chain (PYMNTS.com, 2015). Woolsworth is implementing these tactics to develop on product development system followed across its all branches and partners. The company has initiated an approach where a single platform can manage all divisions and product categories. For example, products including food, beverages, alcohol, in general stock, fashion, petrol, and home wares. Woolsworth Company also invested 1 billion dollars to a newly launched program named Mercury II which will effectively cut down transportations costs and encourage the use of technology (PYMNTS.com, 2015).
The incorporation and up gradation of enterprise systems has led the company to achieve brilliant results and they also have changed their organisational culture. This can be noticed from their changed approach towards partnership. The company revolves around 3 major objectives to build strong partnerships and supplier relationships - trust, freedom and long term relationships (Woolworthsgroup.com.au, 2020).
It can be concluded that enterprise system are beneficial for large firms in the economy. Woolsworth is the largest retail industry that provides products ranging from food, liquor, groceries, fashion apparel, petrol and home décor. The company faced a major turmoil in mid-2015, due to its outdated enterprise systems. The incorporation and up gradation of ERP, CRM and supply chain management which are the major components of Enterprise System helped the company to enjoy noticeable growth in its culture and structure. The significance of Enterprise system is immense. It helps the firms to secure consumer data which is later useful for the activity of product development. The enterprise system also allows the company to innovate and inculpate new business models. As a result of which it incorporated lean business model in its way of working. The updated software system of the company allowed it to connect with its suppliers which is very important for the management of logistics in a business. Suppliers are the one, who will initiate the sales activity for the company. Building strong relationships with them has helped the company to procure quality products, food and fruits. In the end it can be said that enterprise implementation system was beneficial for WoolsWorth Company of Australia.
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