Sustainable Supply Chain Management Principles Essay

1424 Words Sep 2nd, 2016 6 Pages
From working personally with the Woolworths company I was able to see how and why inventory was transferred from suppliers to stores. The Woolworths company uses a very simple inventory management system. As a supermarket, having the adequate number of stock in stores at all times is pivotal in keeping customers satisfied after every shop at a Woolworths store. In order to achieve this goal, Woolworths supermarkets use an electronic inventory management system that sends alerts to the specific warehouse when stock is low or is expected to run out. This is used through vertical integration which is “the strategy of where a company expands its business operations into different steps on the same production path” (Investopedia). The way the system works is that every time an item gets scanned through the checkouts the system will check and see how the stock is faring. Woolworths staff also have in stores a wireless RF gun which they can use to check stock levels, whilst also having the ability to mark down specific products that may not be selling or that may need to be cleared by the end of the trading hours (POS PLAZA 2013). Through this method of inventory management, Woolworths stores are able to cut costs by knowing exactly what and how much of a product that they need to order every day. This will increase a store’s inventory turnover ratio which “measures the rate at which inventory is used over a measurement period”…

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