Woolworths has introduced ‘guided buying’ using SAP Ariba to 1100 stores over the past three months, assisting them to procure billions of dollars of ‘non-trade’ goods and services each year.
The Ariba guided buying deployment was first revealed three months back by Bloom Consulting, a technology partner to the project.
Branded internally as ‘iBuy’, the initial go-live saw it deployed to 330 stores, with a further phase of work expanding its reach to another 950 stores.
Woolworths declined to comment to iTnews at the time and did not respond to further requests for comment.
However, at SAP’s procurement reimagined conference, Woolworths’ general manager of group procurement Phillip McDonald finally confirmed details of the project.
McDonald said Woolworths’ annual spend on “non-trade goods and services” totalled around $6 billion, of which over $3 billion is in active contracts.
Non-trade goods and services cover spend categories such as marketing services, marketing print, businss services, consultancy and construction, according to Woolworths’ vendor portal.
This spend will now be directed through iBuy - and therefore SAP Ariba.
“We recently deployed Ariba guided buying to 1100 of our supermarket stores across Australia,” McDonald said.
He said that ordering channel compliance is already sitting “in the mid 90 percent”.
“That means that 90 percent of the orders are going through the channel that we prefer, which is Ariba in this case,” he said, adding that the goal was to “move to 100 percent across most … states”.
McDonald said that iBuy was designed to be easy to use, with “a one-page user guide” meeting the training needs of about 95 percent of users.
He also said that uptake had been “phenomenal” considering the project was rolled out as the supermarket’s procurement teams worked through pressing issues such as keeping shelves stocked during the pandemic.
He added that Woolworths suppliers benefitted by transacting with the company through the Ariba network.
“That's a more simplified process for them as well,” McDonald said.
The guided buying deployment is one piece of a much larger multi-year procurement transformation at Woolworths that has been underway already for a number of years, with other modules of SAP Ariba used in that technology core.
McDonald said there is more work to be done around non-trade procurement and supplier management.
“A big focus for us in the next 12 months is definitely around supplier management and our ‘simpler for stores’ program that we are enhancing, and that’s really enabled by the deployment of SLP [Ariba supplier lifecycle & performance) and [Ariba supplier] risk modules,” he said.
“Once we get that program embedded and we leverage the platform the technology gives us, we'll be in a much better place for our supplier management activities across Woolworths for non-trade.”
McDonald said that Woolworths’ IT and business enablement teams had been “instrumental” in the retailer’s successes to date with Ariba, as had SAP and systems integration partners.
“At Woolworths, one of [our] values is ‘better together’, and we have found that this is very relevant to our technology journey,” he said.
“You've got to invest in your deployment and put the incremental resources in place to enable your success, even after the deployment.
“The skill set needed doesn't naturally reside in the procurement function always, and so there should be specialists that you use to deploy your solutions across the organisation.”
McDonald said the project had also taught Woolworths’ procurement organisation to put more trust in the advice of these external parties and advisers.
“Procurement people are sometimes skeptical, believe it or not, and we do look at people that are providing us information as a 'what's in it for you',” he said.
“The reality is we've just got to put a level of trust and engagement in to say ‘what's in it for you is that you want me to be successful, so I need to listen to that advice and act on it in order to make this play out the best way it possibly can’.
“Now you might get there without taking on that advice, but you sure can make that journey a lot faster and a lot smoother if you listen.”