Wawa: Supply Change Management
(13 pages of text)
By mid-2007, Wawa, headquartered outside Philadelphia, had grown into a chain of 564 convenience stores (200 of which sold gasoline) within a 250-mile radius. A privately owned firm, Wawa employed over 16,000 people and had $4.67 billion of sales in 2006, an increase of 19.6 per cent over the prior year. It was widely admired as a highly effective and humane organization with a loyal and expanding body of customers.
This case addresses Wawa’s supply chain management (SCM) in the context of strategic direction, organizational design, and future growth opportunities. Over an eight-year period, Wawa had transformed its supply chain from a disjointed array of parts into a coherent, high-functioning system. Issues before the company now included (1) the relation between SCM and competitiveness; (2) the nature of the typical store and store manager; and (3) possible expansion beyond Wawa’s current area of operations. Another question concerned Wawa’s stores. Historically, these had featured a friendly ambience where “everybody knows your name,” but the company was moving towards larger, more standardized units with fewer offerings, with the goal of minimizing customer throughput time. What would this shift mean for the role of the store manager, and for the overall customer experience? Finally, to what extent was Wawa “landlocked” in its concentrated, middle-Atlantic market? Could — and should — the company attempt to export its distinctive value proposition, culture, and methods to other geographic areas?
This case, which demands high-level, generalist thinking, is an excellent example of systems theory and the consequent difficulty of reducing its lessons to a specific discipline. Wawa illustrates profoundly the intersection of strategy, technology, and organization. The case can contribute equally to both undergraduate and (executive) MBA courses in strategic management, organizational design, and change management. Wawa shows how the concept of organization has evolved from the notion of a focal, even monolithic structure to include both extended network and shared mindset. Wawa also demonstrates how supply chain management has evolved into a complex, three-part choice — make vs. buy vs. partner — and the nuances required to manage this process. The objectives include helping students:
Grasp the complexity of strategic, organizational, and supply chain management.
Appreciate the difficulty of simultaneously reinforcing continuity and pursuing change.
- Confront the issue of geographical expansion by replicating existing systems elsewhere.
United States, Large, 2007
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