Project Statement
Discuss about the Supply Chain Management Within Coles Supermarkets.
The supermarket and grocery stores in Australia is considered highly competitive as well as concentrated. The renowned retail stores in Australia include ALDI, Coles and Woolworths. With the establishment of ALDI in 2001, the retail industry in Australia has taken a new shape. It has started growing and developing with a new product line, which gained momentum alongside the products of Coles and Woolworths. The trend of retail industry started affecting the shopping behavior of the individuals. Strong competition from the new retail companies had a significant impact on the traditional companies of Coles and Woolworths (Bailey 2017).
This project will focus on the logistics and supply chain management within Coles Supermarkets in the Australian Supermarket Industry. The content of the particular project will center on the sustainable supply chains, planning, management and analysis of logistics functions. The issues with Coles supply chain are associated with its high price for the regular groceries and their high rate of stock- outs. Customer data has highlighted that the complaint about stock- out is a long-term issue in Coles supermarket (Brandenburg et al. 2014).
The literature for this topic will be totally dependent on the different principles and elements of Supply Chain Management, corporate social responsibility and sustainability theory. Previous case studies will be used as a secondary source of information to gather evidences for the topic. As the theme of this topic will centre on the supply chain management and logistics of Coles therefore relevant theories have been selected.
Bekaroo, Bokhoree and Pattinson (2016) mention that supply chain management at Coles and sustainability are closely related. The supermarket chain’s product line consists of baby products, Coles mobile, gift cards, liquor and meat. The supermarket also sells gluten free products which cater to the needs of the health conscious and aged consumers. An analysis of the product line of Coles clearly shows that the supermarket chain is heavily dependent on a large number of suppliers both from within Australia and abroad to make these products available to customers. Sallis et al. (2015) further point out in this regard that the supply chain management of Coles plays a significant role in rendering it sustainability, both environment wise and financially. First, the supply chain management of Coles enables it to acquire superior quality products like dairy products at economic rates. Secondly, this helps the Australian super market chain keep its operational costs low which in turn enable it to keep the prices of its products low. Moreover, due to a vast supply chain spanning across the several countries, the supermarket chain is able to import premium goods from other countries. Thus, it is able to cater to both middle class consumers and upper class consumers. This earns the supermarket chain immense revenue, thus rendering it financial sustainability. Nimtrakoon (2015) in this respect points out that high revenue generation boosts the capital generation required to propel its operations. This is because the management of the supermarket allocates a ratio of its revenue towards paying high returns to investors. Blankespoor and Zhu (2018) in this respect reiterates that economic supply chains enable the supermarket to maintain low acquisition of materials, thus maintaining high profit percentage. Thus, from the above discussion it can be said that supply chain management plays significant role in achieving financial sustainability, both in terms of generating revenue and capital.
Literature Review
As per Mota et al. (2015), chain management takes the center stage in attaining environmental sustainability. The country of Australia has very strict environmental laws which aim to protect the biodiversity and heritage of the country. The laws encompass all industries and business Organizations. The laws require the business Organizations including supermarkets like Coles to comply with them and have provisions of initiating legal actions against defaulters (environment.gov.au 2018). Silvestre (2015) mention that supply chains plays a very important role in compliance with the environmental laws. This is because the suppliers provide the supermarket with environmental friendly products like organic products which help it to attain environmental sustainability in terms of product offering. Thus, the chain management plays a very significant role in assisting Coles comply with the Australian environmental laws and reducing legal expenditure it would have otherwise incurred due to non-compliance with environmental laws. Thus, environmental sustainability leads to financial sustainability. Christopher (2016) points out another significant aid without which sustainability and supply chain management would not feasible-logistics.
Sallis et al. (2015) already points out that efficient supply chain management is dependent heavily on logistics as pointed out Christopher (2016).The logistics chain consist of wide network of warehouses and transport consisting of air, water and road transport which ensure that the suppliers can deliver their goods to Coles at convenient. This enables these suppliers to keep the rates of those products low which in turn enables Coles to maintain the value of products low. de Jong et al.(2016) strengthens the discussion by pointing out that logistics chain today follow HUB AND SPOKE MODEL which consist of transportation of goods from one point to the other in order to enable faster transport. The suppliers use important transport junctions like principle air ports and ports to accumulate large volume of freight which is then transported to the target market. Roni, et al.(2017) in this regard point out this hub and spoke model enable logistics companies to transport bulk items which reduces the cost per item. The suppliers using these logistics network have to incur lower expenditure which enables them to charge less from the companies like Coles acquiring their products. Thus, logistics form the base of an efficient supply chain management and sustainability at Coles.
Quarshie, Salmi and Leuschner(2016) mention that CSR and supply chain management of supermarket chais like Coles are related very closely. The product range of Coles would reveal that it sells high quality local products like Australian wine besides selling branded products. The supermarket chain acquires products from local producers and enables them generate revenue. Epstein(2018) points out in this respect that the supermarket chain as a responsible corporate citizen brings about economic development among the local population. The local producers are able to produce higher quality products to the supermarket and thus the latter is able to procure them at lower prices. This allows the Coles to keep its cost of acquisition if raw materials low and enjoy high percentage of profits. Further it can be pointed out that the supermarket chain provide markets to local producers of Australia like local wine producers to sell these products. Witkowski and Kiba-Janiak(2014) mention this means that the supermarket can acquire those locally produced products by incurring lower logistics costs. Thus, corporate social responsibility can enable the Coles to achieve higher degree of efficiency both in terms of supply chain and logistics chains management. Frantál et al.(2015) mentions that corporate social responsibility enables the Coles to create a strong social image in Australia which helps it to compete with its competitors like Woolworths. Thus, it can be inferred that benefit CSR is not limited to efficient management of supply chain and logistics chain. It has emerged as a formidable tool to sustain the market competition from other big supermarket chains.
Purpose of the Research
The purpose of the following research is to find out about the supply chain and logistics issues in the Coles supermarket and the appropriate use of relevant principles and theories with regard to those issues. The research is aimed at the high price of the grocery stores and the large amount of stock-outs in the market. The customer data has highlighted ample amount of complaints from the customers therefore, it is intended to look for a remedy to this issue. This research will serve the purpose of project planning and management at the Coles supermarket with respect to the Australian supermarket industry (Christopher 2016).
Research methods are the processes and procedures, which are followed while collecting data and gathering information. There are different types of research methods and those are dependent on the topic and subject of the study. For this particular research, case study approach will be used and secondary data will be collected to serve the purpose of this research. The data, which will be collected from the secondary sources, will be analyzed using qualitative methods. No numerical data will be used in the findings and analysis of data (Coles, Xhelili and Kessler 2016). Rather, information and qualitative data will be emphasized while carrying out the process of data analysis.
The effectiveness and strength of the supply chain and logistics industry in Australia plays a crucial role in enhancing the productivity and economy of the country. This project is based on the supply chain and logistics functions of Coles supermarket and the issues faced by the organization in terms of high price and large stock- outs. In the Australian retail industry, cost- effective supply chain and logistics functions permit the exporters to grab the international markets easily by helping the Australians manufacturers to remain cost- competitive in the import market. It is helpful in enabling different organizations in Australia to face competition in the industry by decreasing the cost and offering more choice to the customers (Fahimnia, Sarkis and Davarzani 2015).
According to the supply chain report 2017, Coles had brought together the stakeholders from all over the logistics and supply chain industry in Australia. By stressing more on the logistics and supply chain issues at Coles it can be mentioned that, the significance of appropriateness in the supply chain measures the reason and effects of inaccuracy. It is considered as an approach to deliver benefits to the customer with few learning from the practical experience. Accuracy is regarded as a key factor at Coles by pointing at the proper amount of inventory existing to offer best value to the customer. FMCG market is facing stiff competition due to the unavoidable challenges faced because of environmental impacts (Kononiuk 2018).
In such a complex surrounding, it is important to set the basic training standards properly which is underlying the process and affects the outcome largely. Without setting up the basics properly, there is a possibility that the process might vary in the supply chain. There is a scope that other parts of the business might be hampered as an after effect of this process, which might hamper the process of delivering best customer value (Mehmood, Katib and Albeshri 2017). Taking proper measures are very important as the organization might miss on the situation, which can take toll on their reputation. Coles has used the approach of integrating training standards with technology to set up a proper and accurate inventory. The primary measures are managed by categorizing on priority basis to find out about the reasons behind the measures. This process is conducted with the suitable stakeholders to seek for sustainable solutions as a part of supply chain management that can be utilized to provide customers with better value. Although there are lots of barriers and challenges in the process of logistics and supply chain, it sometimes becomes out of control by the organization to manage. However, the process of dealing with the inventory is totally under the organizational control. Thus is because, a correct inventory helps in the process of effective decision making, provides a flexible work environment and attains the ability to react better in face of the challenges. Inventory also affects the outcome of other supply chains and the logistics functions (Monczka et al. 2015).
For this particular project on Coles’ supply chain and logistics, the principles of sustainability, CSR and supply chain management is focused on. Sustainability is referred to as a kind of economy and culture that can be long- lasting and retained on a international level. Therefore, Coles management has taken the responsibility to deal with their social and environmental effects in a serious manner. They think it to be a significant decision of the customers as well as the team members and the suppliers (Pagell and Shevchenko 2014). They make it a point to constantly look out for new opportunities and make a positive impact on the society by recycling waste, increasing resource efficiency and being responsible towards ethical sourcing. On the other hand, the supply chain facilities at Coles allow the organization to think deeply about the supply chain by responding fast to the change in sales. It helps in getting used to the change in inventory and services are delivered in a quick manner. Coles has managed to create a quick supply chain by making sure that their distribution centers incorporate the processes and automation of logistics successfully. As Coles required a salutation for securing their future processes, therefore they made sure to be cost- effective for overcoming the challenges. This process helped in total reduction of direct labor by palletizing crates. The pallets of the distribution centre are usually filled with cartons and other such objects from the suppliers (Webster, Bargon and Carter 2015). That is how, Coles is able to keep a control on their costs as well as the security of supply with the help of automation due to the increase in reaction and decrease in lead- time. Coles was benefitted by having a proper control over their inventory and at the same time, enhanced the shelf life of the product.
Schwartz(2017) defines corporate social responsibility as the business approach which emphasises that business Organizations must work towards acting as responsible corporate citizens aiming to bring about betterment of the society and the other stakeholders as well. Binz et al. (2017) in this respects that business Organizations like Coles are corporate citizens which uses resources like capital and human resources from the economy and pay taxes to the government. Thus, they are on regular basis engaging in transactions with several stakeholders like customers and the suppliers. For example, the suppliers provide the Coles Supermarket with authentic high quality local products like Australian wine and beef. Feenstra(2018) takes this importance of local suppliers to the next level by mentioning that local products enable supermarkets give authenticity to their product lines, thus gaining differentiation from their competitors. Thus, the business Organizations are also responsible to bring about the socio-economic development. These Organizations in fact benefit by the development of the local producers. The local producers due to increased income are able to offer better products to the supermarkets owing to their increased resources. Thus supermarket chains can enable their supply chains to gain higher degree financial sustainability and encourage them towards using environment friendly methods of producing raw materials. This way the supermarket can attain higher degree of sustainability and reduce its carbon footprints. Thus, corporate social responsibility can enable business Organization to strengthen their image and reduce their environmental impacts. This important role which CSR plays has made business Organizations adopt CSR as a part their core strategy which is supervised by the apex management.
The following chapter of the project will highlight the different methods that are used in the conduction of the following study. Methodology is one of the most important chapters of the project as because it provides the details of the different kinds of the model that are used in the following chapter. The methodology provides an appropriate framework that can help to complete the report within the calculated time limit. The following report has included the outline of the different methods, the research philosophy, strategy and approach to the study. The data collection processes and the sampling techniques has also been provided in the following chapter.
The report has used the case study based approach. The post positivism research philosophy has also been used in the research that would be helpful in determining the different types of the methods that will be most suitable. The deductive approach on the other hand is an additional benefit for the formulation of the report. The study has used mainly the qualitative data analysis method to analyze the results from the collected data.
The following report has used the positivism research philosophy to conduct and complete the findings on the study of the sup-ply chain of Coles supermarket. The main use of using the positivism research philosophy is the use of different kinds of factual knowledge to test the formulated research hypothesis and questions. Moreover the use of the particular philosophy also enables the formulator of the particular study to analyze the data more scientifically.
The report has used the deductive case study approach over the use of inductive approach to find out the results of the research. The use of the deductive research also allows the formulator of the report to test the formulated hypothesis or the issues that bothers the supply chain or the logistical management chain of the different kinds of organization. The use of deductive approach also goes well with the collection of secondary articles and researches that are used to formulate the study in a proper and effective manner. The secondary resources are generally referred to as the data collected from sources like earlier works, magazines and reports or literary articles that were published earlier. The most important reason of using the deductive source of approach is usually the saving of time and resources to conduct such a study. The collection of data and other sources from that of the earlier literary articles has helped the formulator of this particular study to save ample amount of time which in turn have helped to provide the readers with a much diversified understanding of the topic and has also increased the scope of the research.
The following case study has used the descriptive design to conduct the study. The descriptive design goes in a perfect harmony with that of the deductive approach and also provides the formulator of the study to make a proper clarification about the existing problems of the research topic. The study in this case has considered the problems that lie with the supply chain management of Coles Supermarkets. The use of the descriptive method also helps to get a clear and transparent idea about the different kinds of the future occurrences and also helps to formulate a solid plan based on the present occurrences.
The following study is generally based on the case study method where the formulator has selected a particular case study that is based on the supply chain strategies of Coles supermarket in Australia. All the data has been collected from the case study and has then been analyzed to find out the actual results. The following method helped the formulator to analyze the impact of the supply chain management on the success of Coles Supermarket.
The following report will be mainly based on the secondary data that will be analyzed from their sources. The sampling size will usually involve the number of sources that have been considered for the collection of the data related to the following project.
I found that the supermarket of Australia has been following the supply chain management principles based on three major frameworks. The supply chain management is totally dependent on the use of these frameworks efficiently and in a proper manner. I was also able to get a thorough knowledge of the different types of other elements related to the following topic. However the most important finding was that of the use of the latest technological features in business.
Market competition is one of the major issues that tend to cripple the mentioned supermarket and disrupts it operational sustainability. The external market environmental analysis of the company showed that the company faces a lot of threats from the operational other competitors in the market. Therefore the company has to maintain a supply chain strategy to ensure a smooth operational functioning (Bailey 2017). The presence of a proper supply chain management is essential for the success of the business in the market. Supply chain management depends on some key elements namely;
- The Product Flow- The product plow is correspondent to the flow of goods to the customer from the supplier of these goods. It involves the flow of goods from the different types of manufacturers to the end users of the same products.
- The Information Flow-The flow of information refers to the flow of transmitting the different orders and the update of the different kind of the delivery status.
- The finance flow-The finance flow refers to the payment schedules, credit terms and the different kinds of title ownership arrangements.
The conduction of the following report has helped to find out the needs for the supply chain management. The analysis of the literature review has provided the readers with the main details about the actual need for supply chain management of the organization. According to, Bailey (2017) there has been a rapid increase in the globalization of the supply chain management. Each and every organization irrespective of their size and nature of business are in need of a proper and effective supply chain management that helps to maintain a healthy supply base. The products that are produced by the companies are generally marketed and promoted by Coles in their stores. Coles stores are not only confined to small localized areas but have expanded their bases to even small towns and even in some rural areas of Australia (Brandenburg et al. 2014). These have promoted the goods of the organization in a much better and broad way and have resulted in the formation of the different supply chains. Therefore globalization has increased the extent to which the products can be marketed or distributed. The companies have been trying to market their products all over the areas where it has its presence and thus its supply chain has been growing bigger and bigger in the coming years. The more bigger the supply chain grows, the more bigger that it gets complex in nature. The supply chain thus is now controlled by an advanced version of software that is required for the use of the organization. According to the management of the mentioned Supermarket of Australia earlier in the past the marketing, planning, distribution and other kinds of retailing activities needs to be done in a proper manner and independent manner (Bailey 2017). The management of the company focuses on the impact on the inventory levels and the different kinds of the distribution capabilities. The orders of the organization are thus taken very carefully and placed accordingly.
As mentioned earlier the growth of the supply chain management will see the growth in the delivery time. This increase in the time will be a cause of anxiety as the company in such a a case has to compromise on the quality or quantity of the products to make sure they meet the deadline of the supply. The speeding up of the supply chain thus exaggerates the risk of compromise (Brandenburg et al. 2014). The speeding up of the supply chain will thus fail to deliver the necessary results for the organization. Therefore a change and restructuring is essential for the success of the supply chain management. The supply chain according to the following report is the flow of information and material from supplier to the customers. The scope of supply chain management is;
- Reducing the total costs of the supply chain and the costs
- Increase in the capacity, utilization and profit of the business
- Speeding up the process of the supply chain and the flexibility to the customers
The management of Coles Supermarket generally follow the principles to avid any forms of problems that may cause a crisis situation. In short the management ensures every steps to secure the supply line of the goods and products within the organization. The report has addressed the three main strategic frameworks adapted by the management of the organization to ensure the best possible use of the supply chain sources.
- CSR sustainability-Each and every large company have a social responsibility. Apart from earning profit the management of the companies have to make sure to address such kinds of responsibilities to address the different social and cultural issues both within the workplace as well as outside the workplace (Brandenburg et al. 2014). The management of Coles Supermarket has initiated as well as participated into a number of different CSR initiatives that has been helpful for the organization to make the most of the business.
- Sustainable Supply chain management- The thorough analysis carried out in the literary part of the following project found out that the management of the company utilizes sustainable supply chain management in a proper way so that the organization can utilize it to the full extent. Some of the key importance of Sustainable Supply Chain Management are as follows;
- A sustainable supply chain management strategy is useful for improving the relationships with the suppliers of the company. This in turn helps in the enhancement of the bond with the suppliers.
- The sustainable supply chain management also helps to improve the quality of the different kinds of goods and products that are available in the supermarket stores.
- The sustainable supply chain strategy helps to attract and retain the employees of the organization can outsource different extra tasks and prioritize the stay of the most able and qualified employees.
- The sustainable supply chain management of the organization provides a high level of security to the investors and the creditors. Such a supply chain ensures the creditors about a proper return from any kind of long term or short term investment in the market.
The management of Cole’s supermarkets practices sustainable supply chain marketing just for the above mentioned benefits. The marketing teams of the company are always engaged in finding out new and much better ways to carry out sustainable supply chain management. The following report has highlighted the process by which the company creates the sustainable chain management. As observed by Christopher (2016) the employees at Coles have developed a sustainability plan to ensure that they stay focused and concentrate on providing better services to the customers of the organization.
- Logistics-Logistics management is one of the main tasks of the organization when it comes to sustainable supply chain management. The management of Coles Supermarket runs one of the best supermarkets of Australia just because of the advanced chain of logistics. The results of the following analysis show that the mentioned supermarket industry is customizing the different kinds of operational strategies of the organization. The management of the company uses the efficient consumer response method to increase the supply chain efficiency of Coles Supermarket and drive the new set of logistics trends within the industry. The trends include the likes of the expanded service requirements, mass customization, customer loyalty and private labeling, delivery options and increased challenges in different kinds of competitive markets. Apart from this third and fourth party based logistical systems, electronic supply chain management and reverse logistics are increasingly become normal for different large business organizations. Coles have recently implemented the use of the electronic point of sales data collection (Brandenburg et al. 2014).
The findings implied that the advancements in the transportation and the storage technologies includes different kinds of breakthrough technologies to improve the supermarket operation to the level of leading automobile manufacturers, the increased present challenges and the different opportunities of the supermarket industry in the island continent of Australia. Though Coles face a lot of different internal as well as external challenges from the different kinds of sources, the company ensures the maintenance of the best logistics solution to provide effective and efficient services to the customers of Coles (Christopher 2016).
Conclusion and Recommendations
The following report has been formulated in a proper and efficient manner to get a better understanding of the supply chain and logistics system of Coles. The following report has highlighted the different kinds of the elements that are considered during the supply chain operations of the business. The report has also identified three different frameworks that are used by the management of Cole’s supermarket in Australia to smoothly conduct the supply chain operations of the business. A thorough analysis of the report will thus provide a clear picture of supply chain management in Coles and will also serve as one of the secondary sources for future researches.
The findings and analysis of the report has provided an insight into the supply chain strategies that are generally followed by Coles supermarket. Some of the main recommendations of the organization are as follows;
- Adoption of a demand driven planning and business operating model- The proper predication and contingency planning tools will ensure a complete view and an effective response to risks such as suppliers who discontinues with the business, political upheaval and different kinds of natural calamities that may affect the smooth operations of the organization (Brandenburg et al. 2014). The management of Coles has to make specific arrangements to adjust the pricing, shape the demand and move the additional products more quickly than ever, drive the revenue growth and more as such. The main task of the organization must concentrate on finding different leverage opportunities and mitigate different kinds of challenging events to ensure the success and sustainability of Coles in local as well as international markets.
- Ensuring a reliable and productive Supply-The absence of a reliable supply chain for Coles often presents different kinds of problems. The absence of a reliable supply to customer facing stakeholders to meet the agreed upon service levels tends the manufacturers of the different products to hold the inventory buffers to ensure meeting the satisfaction levels of the customer. The following costs of the business may even involve the buying of different kinds of products that includes the likes of wrong and inferior products. The limitations of such flawed process can be met by the use of latest technological software by the management of the organization.
- Use of the Right practices and the best tools-The demands on supply chain managers to respond in a rapid and efficient manner to different kinds of organizational developments and organizational changes are required to increase the profitability of the organization. The effective strategies and solutions that exist in the business set up and support each other on different kinds of strategies. Therefore the use of the proper strategies is utmost essential for the success of the business in the market. Apart from this the management of Coles must also concentrate on the use of the proper tools that will help Coles to supply the best possible products in the correct time to the customers. The tools that will be used will be tested tools and used by most of the large supermarkets of the world.
- Using Advanced Software to track and manage inventory in real time-As mentioned earlier the use of modern and latest technological tools is key to the success of maintaining a proper supply chain (Christopher 2016). The maintenance of a proper supply chain is important for the use of the organizational tools and they can use it in different occasions to maintain the different levels of the supply chain. The implementation of the different kinds of the software also helps the organization to monitor and regulate the whole of the supply process and achieve the desired results.
- Making sure that the marketing and supply chain teams are in proper synchronization-The management of Coles must make sure to execute a proper promotion strategy to deliver the best results for the organization. Most of the companies including that of Coles overlook the alignment of the supply chain and the marketing teams which is by far the most efficient and crucial way to ensure the maintenance of a smooth supply chain. The presence of a marketing alert the supply chain goes ahead in the right path of a proper promotional policy.
- Manage each of the product individually but understand how products behave in groups- There are different kinds of perishable categories, products often substitute so readily for one another that the customers can switch over from one brand to the other brand without any second choice (Christopher 2016). The company must begin the process of optimization by identifying the must haves in each of the different large and small sub categories to support the different processes of the organization.
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