Woolworths’ $1 billion supply chain overhaul

Date : 30 September 2014

Woolworths is preparing to roll out a $1 billion overhaul of its supply chain aiming to cut the cost of transport operations across Australia, according to press reports.

Identifying growth opportunities

Woolworths is to roll out its supply chain overhaul, Mercury II, with the aim of reducing costs. The new program will deliver productivity gains similar to those of Mercury I – Woolworths’ transformation project that was implemented 10 years ago. The retailer is looking to identify growth opportunities for all divisions - online and in-store, by using information from Quantium an analytics company that Woolworths has a 50% stake in, and information about shopping habits gleaned from credit cards and loyalty cards.

First dark store

The Australian retailer recently opened its first online-only store in Sydney. The facility is a move away from Woolworths’ strategy of picking online orders at the customer’s closest store. Woolworths’ general manager of multichannel retail, Kate Langford, said: “The advantage for our online shopper is the range in store is designed according to their needs – that means we get orders to customers faster. We have more flexibility to be able to pick and deliver customers’ orders throughout the day – in a busy store environment we are somewhat limited to when we can pick our online orders.”