Woolworths outranks Wesfarmers in supply chain comparison

Retail giant Woolworths has beaten rival Wesfarmers to be named one of the top 15 supply chain companies in Asia Pacific by analyst firm Gartner.

Woolworths was the only Australian firm to make the annual top 15 list for this region.

Although Wesfarmers — which owns Woolworths' rival Coles — was a contender, it failed to garner enough votes from a 'peer panel' consisting of 173 executives from supply chain organisations worldwide.

The peer panel vote is a component of the final ranking given by Gartner to supply chain firms. Another component is financial performance.

About 24 percent of this year's peer panel was made up of Asia Pacific-based executives.

Woolworths ranked an impressive sixth out of the top 15 supply chains in the region. Against its global rivals, it ranked 57th.

"Companies leading the top supply chains in Asia Pacific have demonstrated capabilities in demand management, operational excellence and innovation," Gartner research director Debashis Tarafdar said.

"They are using best practices including demand sensing and shaping, segmentation and collaboration, to help manage demand volatility and deliver predictable results.

"To measure supply chain performance, they select the right metrics that are aligned to the company's overall business objectives.

"They also build resiliency into supply network design, and implement risk management strategies across trading partner networks."

Although exact reasons for Woolworths' win were not disclosed by Gartner, the retailer has been through a rebuild of its supply chain and logistics via Project Mercury.

It is also in the latter stages of Project Galaxy, a five-year IT transformation which has SAP as its centrepiece.

Both the Mercury and Galaxy projects sit under a broader program of work called 'Refresh, which has contained sizable IT investments.

The program was a key contributor to Woolworths rank, according to primary analyst author of the Asia Pacific top 15, Vikas Sarangdhar.

"Woolworths continued to invest in its supply chain and new stores during the first half of 2012," he wrote.

"A key aspect of the retailer's supply chain strategy includes rationalising its network by significantly reducing the number of distribution centres.

"The company has also embarked on a major corporate program to improve business efficiency and reduce operating costs."

The Asia Pacific results were announced at a Gartner supply chain executive conference being held in Sydney.

The worldwide top 25 results were revealed back in May, with Apple topping the list, followed by Amazon.