Wawa’s technology strategy involved several things. First, and most important, is that Wawa continued to change with the times and used some of the best technology available at the time. When they saw that home delivered milk was coming to an end they changed their operations. They saw that trends during the 60’s were changing the way people shopped. Many households were becoming 2 income families and this meant there was less time for errands.
People wanted things quickly and conveniently. There was also a growth of supermarkets which would certainly be taking away their milk home delivery business. Wawa looked at the future, the trends, and made changes before it was too late. Another strategy was “branding”. They were like “Cheers”. They committed to long term relationships with employees and customers. They gave their employees stock in the company and tuition reimbursement leading to a 22% turnover rate, which is unheard of in the retail sector!
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There was not a big hierarchy. Employees were on a first name basis with everyone, customers knew the employees, and managers did not have to go through huge reporting structures to get information so information was retrieved quickly. They attributed this to their strong Quaker roots and the relationships they had with the community. Others strategies used were to have trucks unload and stock shelves in the early morning so they did not get in the way of customers in the store or in the parking lot.
They did not keep a large selection of items on the shelf, for instance, if you needed peanut butter, there was one brand of peanut butter in the store and it came in one size. They hired an outside contractor to warehouse there stock, deliver it to their stores and restock the shelves. This was a “central management of assortment” They thought that having one person deliver everything was easier than several trucks arriving from all different vendors constantly. They used information technology to forecast and replenish.
They turned products over every 10 days and 70% of their merchandise came from this company, named the New Jersey Distribution Center (NJDC). They had a virtual fuel system. They never had to own a truck, hire a driver, or worry about running out. The carriers monitor the stores through technology. They had a high volume strategy for the gas so they constructed a terminal of their own to bring in international shipments. 2. How effective was this strategy? The strategy of the NJDC was very effective. They left the ordering, storage, and delivery to this company.
It was delivered in the early morning hours so as not to disturb customers and it all came on one truck at one time. This was very convenient for the store managers, the customers, and the staff. It did take some time to work out some of the logistics but when it was completely up and running it became a win-win combination! The fuel strategy was just as magnificent. They never had to worry about ordering, delivery, etc. They were able to buy in large volumes and get the best pricing. They would give feedback/”report cards” that were taken seriously because they never ran out of gasoline!
How would you advise Wawa about it supply chain management (SCM) going forward? What concepts and /or frameworks from the course inform your perspective? Going forward they should continue to think “outside of the box”. They need to stay innovative, as many of the companies are that we have been reading about and discussing in class. The CEO has the right attitude – he states that he is in charge of change management. Keep changing with the times for success. Continue to use the latest IT that is available for SCM. 4. What implications does Wawa’s SCM strategy have for the c-store industry?
Wawa has become a role model for the others to follow. Implications for c-stores that do not follow this computerized, convenient, customer satisfied model could loose customers quickly, and would probably lose them to Wawa or Wawa-like establishments. Wawa’s strategy has changed the c-store industry, the industry needs to stay on top of the latest information technology and find ways to use it to keep their operations on the cutting edge. 5. What implications do Internet, mobile computing devices, and “green” concerns have for Wawa’s overall technology strategy.
All of these items have a huge impact on Wawa’s overall technology strategy. Wawa should take advantage of the Internet as it continues to advance in order to streamline operations and save money. New programs are developed constantly. New ideas should be evaluated on a continuing basis. Wawa should have IT personnel who are constantly be looking at the future and brainstorming on how new IT functions can help them. Mobile computing devices are booming now and there seems to be an “app” for everything.
Wawa needs to join the bandwagon and use these “apps” to their advantage, for advertising purposes and for customer convenience. What if they had an “app” for customers how are on the road to find the closest Wawa while traveling and then to preorder and prepay for everything they are going to purchase when they arrive, and to have someone bring it out to the car! Many companies are starting programs like this and the ones that are ahead of the game are the ones that will succeed. I personally already use this application for my grocery shopping and love it!
I now only shop at the stores that use this technology. As far as green concerns, this is very, very important. Wawa needs to show its customers that it is green and is doing things to help the environment. This is very important to customers these days. On the flip side, if is contaminating the environment, it could be fatal! Look at the implications that BP has to deal with now! Not only is it going to cost a fortune to clean up the environment but they have destroyed their reputation, people do not want anything to do with them, and I would not be surprised if it brought down the entire company very quickly.