Wawa Research Paper
The top of the hierarchy was still under development but included sales/production, forecasting and replenishment system. In the middle was an under development strategic sourcing program. At the bottom was the operational master data set: articles files for warehousing, ordering, pricing and scanning up to 45000 SSW. This technology was used to keep records of inventory, orders being processed for suppliers and keep records of the past months orders, which could be used as information to make many Important decisions.
An important part of the new IT architecture was the Introduction of Dif (Demand Influencing factors). This system would forecast the changes (holidays, promotions and weather) and factor these changes Into the recommended order that It generates for the stores. Way also started selling gas as convenience stores when it comes to gasoline procurement. In the past they had seven or eight carriers that monitored the gas supply in their assigned stores through technology and they communicated once a day and these carriers did everything for Way.
The technology strategy required Way to unite WBI, NCSC and the Fresh Channel integrated under one banner to create a competitive advantage and be cost- effective. The IT strategy was effective for Way. The Dif that would automatically take demand influencing factors into account and forecast and replenish the system. This system saved a lot of time, energy, and effort for the store managers as rather than having to remember the fact that something is on promotion next week or that the demand has changed due weather/holidays this system takes all the factors into consideration and generates a recommended order.
This gives the store manager more time to focus on many different things. In my belief their gas supply strategy was very effective. Way had an advantage when it came to gas distribution as they never owned a gasoline truck and never hired a gasoline driver or invested money in logistics. They were virtual when it came to gas distribution. The store managers never had to worry that the fuel would run out; they Just had to focus on selling it. I think this system increased Haw’s profit margins for selling fuel, as they did not have a lot of capital investment.
Their strategies in technology helped the firm become more customer focused, which was their mission to simplify daily lives of people. Way technology strategies helped in reducing a lot of workload for the workers in the store so they could concentrate on customers. Way was in the process of developing a new systematic supply chain as their egoistic had reached capacity and their vendors had been inconsistent in supplying the stores. Way wanted to own the software but not the hardware. They wanted a consolidated facility, owned and operated by a third party.
If they wanted to build their own distribution centre, it would have cost them at least the equivalent of 10 to 11 new stores. Way choose Mclean Company of Texas, as they were by far there largest convenience store distributor in the country. They were in a strategic “100 – 100 partnership”. NCSC was a 220,000 square-feet building and had 5 different imperative zones. The NCSC used to dispatch trucks between 1 am and 4:mama and every store had consistent deliveries with a 2-hour EAT. This allowed the management to plan for enough labor so they could shelf the products upon arrival.
In the convenience story industry many of Haw’s competitors did not realize that delivery timings were affecting their customers. It has happened to me a number of times when I go to a 7-11 and if they are getting a delivery their parking lot will be full and the store will be over crowded and understaffed as most the workers are emphasizing on shelving he items instead of paying attention to customers. NCSC handled 1800 SKU and it turned over products in ten days. Although Way owned the inventory, Mclean use to do everything for Way.
They used to give orders to the vendors, manage inventory and inform Way how much they owe to the vendors. NCSC was able to such that all the Way stores could be reached in a day. Way did not want to waste capital on building their own facility as their competitors suffered by doing so. NCSC had only 6 Way employees and their Job was to maintain relations between Haw’s marketing department and Mclean merchandising department. This also is a very important lesson for their competitors, as they also should maintain good relations with their distributors because one party cannot succeed at the expense of others.
Bluebells stated that the relationship is like a marriage. Most employees of Way and Mclean consider this a strategic partnership and their partnership was a testimony for other players in the industry. NCSC was impressive in the technological aspect also. It promised to be an impressive array of third party logistics, cross docking, virtual management and mutual adjustment within and amongst organizations. Operations in NCSC and Fuel supply were meticulously choreographed, tightly coupled and highly efficient..
Outsourcing this process, like the NCSC and Fuel channel, to experienced companies would allow Way to develop an efficient distribution network at a significantly less cost, and concentrate the majority of their resources on the customers. Haw’s SCM going forward was quite impressive as well. They were going to implement the fresh channel. Fresh channel would be a central kitchen where food items could be prepared which were previously made in stores. This was done in order to maintain uniformity and increase the flexibility. Way has one of the most impressive and effective distribution channels in the industry.
Going forward I think the company should continue its traditions of giving the customer more importance. Way should find another company like Mclean or offer Mclean a contract for another location so they could expand on their stores and be NCSC was expected to last until 2012 but it is already full at the moment, which gives the organization very little room for growth. The Fuel Channel is one of Haw’s best supply channel so I think they could add more gas stations to their stores as I have seen many Haw’s thou gas stations.
This would help the company expand their market and geographical radius. I think Way should also have websites or mobile phone applications, which tell the customers about the number of people in the store or the approximate waiting time. They should also let customers order their food from their kitchen freshly made in the store online. I consider Way to be green to an extent as they have reduced their number of truck deliveries and Fuel channels do not even use one truck. Way is virtual in gas distribution. Way could start using recycled labels on their private products.
