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Associated Wholesale Grocers: Logistics’ Leviathan Essay

1211 words - 5 pages

Associated Wholesale Grocers: Logistics’ Leviathan

Associated Wholesale Grocers (AWG) came into being more than eight decades ago when several independent retailers decided that the power of a cooperative far outweighed the influence of any one individual retail grocer. AWG provides distributor services to independent grocers in over 30 states with nine distribution centers throughout the South and Southeast regions of the country. In addition to their wholesale foods department, AWG offers a myriad of services from new store design, construction, marketing, product placement and “world class” logistical consultation (cite 11). AWG faces many of the same logistical challenges that other ...view middle of the document...

S. The concerted effort to warehouse and distribute various products is similar to what the Defense Logistics Agency (DLA) at Tinker accomplishes albeit on a different scale. Possible changes to AWG’s business model could include staffing the selectors and loaders to support a continuous 24/7 operation in an effort to mitigate delays caused by unplanned events (weather). Around-the-clock operations would require additional full-time employees (increasing overhead vs. on-calls), but historically will lessen a companies’ turnover rate and often results in higher productivity and company morale. One obstacle discussed during the AWG tour our logistics class participated in was market share in relation to the “large chain stores.” An aggressive campaign geared to initiate new Co-op members has historically proved successful when competing with industry leaders such as Walmart. The combined purchasing power of the Co-op coupled with the “family oriented” business philosophy enhance AWG’s image when compared to the “cooperate greed” akin to big chain conglomerates.
AWG’s SWOT analysis can provide insight into future business opportunities and expose external threats so they can be dealt with on a proactive rather than reactive timeline. AWG exhibits several strengths including accomplishing inventory turns of its Oklahoma City distribution center every three days which ensure fresh products to the consumer. The cooperative structured business model provides additional purchasing power when compared to a sole retailer. In addition to retail distribution services, AWG has diversified its core business to include marketing, logistics, new construction and consulting which enhances its overall stability and market share. AWG employs a computerized tracking and pull system for wholesale distributing that minimizes stocking errors and increases productivity all the while increasing quality.
One possible weakness to note in AWG’s business is that of the workforce composition. Ten percent of warehouse employees are considered “part time” or “on-call”. On-call employees provide an aspect of flexibility, but at the same time present a weakness due to their potential for higher than normal attrition rates. Another notable weakness that could possibly cause a logistics dilemma would be the use of contract type laborers to unload the incoming restock trailers. Traditionally, “Lumpers” in the United States are foreign nationals operating under work visas that charge varying amounts dependent on size and scope of the job. Given that the “Lumpers” are paid by the job their services and fees add a certain amount of unwanted variability into the logistics machine.
According to sales manager Robert Cartmell, AWG currently captures 48% of the regional market sales when...

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