Supply Chain Collaboration in Coles Supermarket

Analysis of current state (AS IS) of collaboration in Coles Supermarket 1 2.1 Supply chain collaboration 1 2.2 Analysis of Coles Supermarket's supply chain collaboration 3 3. Executive Summary Supply Chain Collaboration is a procedure which involves collaboration of several organisations, where they work effectively to ensure high profitability and better supply chain management. Analysis of current state (AS IS) of collaboration in Coles Supermarket 2.1 Supply chain collaboration Illustration Supply chain collaboration refers to a cooperative strategy where two and more companies, or business units work together

PROJECT

Table of Contents
1. Executive Summary.....................................................................................................................1
2. Analysis of current state (AS IS) of collaboration in Coles Supermarket...................................1
2.1 Supply chain collaboration....................................................................................................1
2.2 Analysis of Coles Supermarket's supply chain collaboration...............................................3
3. Improvement Strategy..................................................................................................................4
4. Conclusion...................................................................................................................................7
5. References....................................................................................................................................7
6. Appendices...................................................................................................................................8
.........................................................................................................................................................8

1. Executive Summary
Supply Chain Collaboration is a procedure which involves collaboration of several
organisations, where they work effectively to ensure high profitability and better supply chain
management. To analyse the same, Coles Supermarket has been used which is one of the biggest
supermarkets operating in hundreds of locations in Australia.
The report required to analyse current state of collaboration of Coles Supermarket. This
was effectively analysed and to ensure benefits in its supply chain, supply chain collaboration
model have been utilised for the company.
Another purpose of this report was to effectively analyse supply chain collaboration of
Coles Supermarket. Thus, it was realised that the firm has not been in good terms with its
suppliers and require to modify and alter its procedures and operations in relation to develop
healthier relationships in the future.
The report also required to suggest an improvement strategy for the Supermarket. To
attain this purpose, it has been suggested that the company must establish new supply partners
and must collaborate with the companies like CEVA. Furthermore, Supply Chain Operations
Reference Model (SCOR) could be used by the company in relation to ensure effectiveness in its
supply chain and help the firm in collaborating better with its suppliers in future.
2. Analysis of current state (AS IS) of collaboration in Coles Supermarket
2.1 Supply chain collaboration
Supply chain collaboration refers to a cooperative strategy where two and more
companies, or business units work together in order to create mutual profitability. By developing
collaboration with suppliers and distributors, a company can achieve various advantages. It
includes lover inventory level, transportation and warehousing costs, increasing visibility and
accessibility of business into customer demand and more (Quarshie, Salmi and Leuschner,
2016). The key factor for company in achievement of its success can be seen by ability to work
in collaboration with external business parters. In this regard, supply chain collaboration consider
as an approach by which a company can enable to control its worldwide supply chains. In
context with Coles, it is considered as a giant of supermarket in Australian marketplace that
offers retail and consumer services. Through implementation of collaborative practices that are
associated with quality improvement and enhancement in supply chain, add Coles in timely
1

fulfilment the demand of customers (Zhang and Cao, 2018). It mainly includes the sharing of
information, gain or risks as well as establishment of common goals. With respect to demand
chain management, Coles' supply chain structure when aligned according to needs of customer
then it lead to give better performance. Henceforth, it becomes essential for this company to have
tight the integration of suppliers, distributors and customers for making a supply chain successful
Therefore, by executing collaborative practices and work together with suppliers, Coles can gain
higher advantages as shown in following figure:-
In order to work together with suppliers and trading partners, supply chain of Coles need
to follow an effective model for collaboration (Laari, Töyli and Ojala, 2017). This would
2
Illustration 1: Supply Chain Collaboration
Illustration 1: A model for Supply Chain Collaboration

improve the factors which are mostly affecting its performance in retail market (as shown in
Appendix). It includes-
2.2 Analysis of Coles Supermarket's supply chain collaboration
Strengths Issues How does it affect Coles
Demand of getting innovative
products on least rate
Products are not supplying on
time as per demand of
customers that move them
away from business
It affects majorly on product
life cycle and increase waste
due to over production
Online sales Coles offer customer services
both through online and
physical processes
Difficult to mix two
warehouses where one is
dedicated to online customers
and other one for local
consumers
Capacity, Cost and Revenue Supply chain disruption may
be costly that cut share price of
products over 20%
Coles have to built resilience
in its supply chain
Buyer power It majorly affects profitability
and revenue of a company
Coles has a dominant position
in Australian marketplace due
to less number of competitors
Competition Sales performance may be
dropped due to presence of
high competition
Coles is considered as deal in
oligopolistic market where
only few large companies tend
for dominating the market
Buyer-supplier relationship Conflicts, unfair treatment in
terms of payment, fail to
develop transparency and
more, effect buyer-suppliers
relationship
As per Australian Competition
and Consumer Commission,
Coles is accused to deal
unfairly with suppliers and
exploit its partners.
3

Information sharing It refers to exchange of
information with supply chain
partners to meet demand of
customers on time
As Coles fails to maintain
relationship with suppliers in
desired manner so it results in
dropping its sales as well.
Good reputation in retail
industry
Child labour, unfair wages and
more
Coles is considered as giant in
retail market of Australia so it
has sustained the high position
in the same area
Global supply chain Coles offers a wide range of
grocery products through
internet and subsequent home
delivery to more than 85% of
Australians
It doesn't achieve efficiency in
transport.
Supply chain of Coles Supermarket is affected by numerous factors that affect its
collaboration with trading partners more effectively (see appendix 1). Coles as operate business
in supermarket sector and offers a wide range of groceries through online and offline procedure.
Therefore, to manage inventories as per online customers and local one within a same
warehouses creates various difficulties. It increases cost of inventory management and exceed
the wastages as well when not supplying the products on time (Ayers and Odegaard, 2017). A
supply chain can only become successful when flow of information, resources as well as
materials maintained. As it has faced various problems due to a scandal where it is accused to
deal in unfair manner with the suppliers and attempt to exploit partners and unfair payment terms
(The Greatest Supermarket Supply Chain Scandals, 2015). Therefore, it is essential for Coles to
make effective relationship with its suppliers, which has affected due to some unfair practices.
This would help in reducing cost and achieve a competitive advantage. Coles also needs to make
improvement in sharing of information for reducing waste, becoming leaner and achievement of
effective lean synchronisation.
4

3. Improvement Strategy
It is of vital importance for Coles Supermarket to effectively work upon and formulate
several improvement strategies in order to overcome its situations as well as ensure a competent
and effective supply chain collaboration (Laari, Töyli and Ojala, 2017). Furthermore, these
strategies would also help the firm in coping up with its current state and ensuring long term
success in its operations.
Following is the improvement strategy for the company to deal with each of its issue
appropriately. There are several issues related to its ineffective supply chain collaboration as
highlighted in the previous task like inappropriate online sales, loss in its capacity, cost and
revenue, along with ineffective competitive advantage in the market. Thus, the company is
required to develop the most effective strategy which allows the firm in gaining appropriate
collaboration from other warehouses which help the firm in carrying out its supply chain
operations with utmost consistency (Ayers and Odegaard, 2017). To achieve this, Coles
Supermarket could form new ties with effective warehouses which would help the firm in
numerous ways. For instance, Coles Supermarket serves in more than 800 locations in the overall
country and hence, it is utmost necessary that this ties are effectively establish with numerous
warehouses such as CEVA. Collaborating with these suppliers would help the company in
effectively reducing its transportation cost as there would be no international suppliers involved.
Moreover, this would also help the company in better inventory management as with utmost
expertise and effective manpower within supplier companies, it gets effective and essential
management which is favourable at firm's end.
Moreover, there is a model which could be applied by the company in relation to ensure
better supply chain collaboration. This model are discussed in detail below:
Supply Chain Operations Reference Model (SCOR):
This model is a management tool which helps companies in addressing, improving as
well as communicating supply chain management decisions effectively within the organisation
(Chen and et. al., 2017). Furthermore, it also assists an organisation in managing the customer
demand through better supply chain management. There are several steps within this model
which could be used by Coles Supermarket:
 Plan: The first and foremost step for the supermarket is to plan and manage the demand
and supply. This step requires the firm to balance resources within certain requirements
5

and identify communication channels along this supply chain (Sancha, Gimene and
Sierra, 2016). Furthermore, the plan also effectively determine several business rules and
guidelines which could help the firm in measuring the safety of supply chain.
 Source: The ext step effectively determines all the sourcing infrastructure requirements
as well as material acquisitions. In this step, the firm requires to manage the inventory
effectively, setting up the supply network, formulating several supplier agreements and
measure their performance. Thus, the supermarket, in this step could analyse all the
aspects related to its new supplier collaborations like CEVA. Make: This step requires the firm to manufacture and produce their commodities.
However, to effectively improve this aspect, the firm could use make-to-order and make-
to-stock methods which would help the firm to carry out these procedures effectively
(Liao, Hu and Ding, 2017). Deliver: This step requires Coles Supermarket to ensure effective order management,
warehousing as well as transportation options. Moreover, it also includes aspects such as
receiving numerous orders from consumers and developing invoices. Additionally,
inventories, transportations, assets and product life cycle stages are expected to be
managed by the company.
6
Illustration 1: Supply Chain Operations Reference Model (SCOR)

 Return: Supermarket must effectively handle return of containers, their packaging or any
sort of defective products. This aspect must be managed appropriately to improve supply
chain collaborations.
All these aspects are necessary for Coles Supermarket in adequately managing and
improving their supply chain management, which would help the company in effectively
enhance the overall operations of the firm in relation to supply and logistics and would be
improving its business relations with its new suppliers like CEVA as part of its improved
strategies (Ross, 2016).
4. Conclusion
Through this assignment it has been concluded that role of retailers is considered as very
crucial in developing a successful supply chain. Due to changing demand of customers and
presence of high competitors, it becomes difficult for companies to gain loyalty of potential
consumers. Therefore, to leverage the demand of customers and develop a long term strategic
relations with them, it is crucial for retailers including Coles Supermarket to implement supply
chain collaboration policies. For this purpose, its management need to concern on those factors
also that affected its collaboration with trading partners or suppliers. It includes issues in
production lines, unfair trade practices, unethical policies, shortage of information and
collaboration etc. Coles also require to maintain constant flow of information suppliers and
business part. This would help in reducing wastages and achievement of lean synchronisation.
Along with this, by implementing ethical practices and developing transparency in business, it
can improve relationships and generate trust with suppliers.
5. References
Books and Journals
Ayers, J. B. and Odegaard, M. A., 2017. Retail supply chain management. CRC Press.
Chen, L. and et. al., 2017. Supply chain collaboration for sustainability: A literature review and
future research agenda. International Journal of Production Economics. 194. pp.73-87.
Laari, S., Töyli, J. and Ojala, L., 2017. Supply chain perspective on competitive strategies and
green supply chain management strategies. Journal of cleaner production. 141.
pp.1303-1315.
Liao, S. H., Hu, D. C. and Ding, L. W., 2017. Assessing the influence of supply chain
collaboration value innovation, supply chain capability and competitive advantage in
Taiwan's networking communication industry. International Journal of Production
Economics. 191. pp.143-153.
7

Quarshie, A. M., Salmi, A. and Leuschner, R., 2016. Sustainability and corporate social
responsibility in supply chains: The state of research in supply chain management and
business ethics journals. Journal of Purchasing and Supply Management. 22(2). pp.82-
97.
Ross, D. F., 2016. Introduction to e-supply chain management: engaging technology to build
market-winning business partnerships. CRC Press.
Sancha, C., Gimenez, C. and Sierra, V., 2016. Achieving a socially responsible supply chain
through assessment and collaboration. Journal of Cleaner Production. 112. pp.1934-
1947.
Zhang, Q. and Cao, M., 2018. Exploring antecedents of supply chain collaboration: Effects of
culture and interorganizational system appropriation. International journal of
Production economics. 195. pp.146-157.
Online
The Greatest Supermarket Supply Chain Scandals. 2015. [Online] Available
Through:<https://procurementandsupply.com/2015/02/the-great-supermarket-supply-
chain-scandals/>.
6. Appendices
Main Factors affecting collaboration in the supply chain
Factor Definition
Commitment It is defined as willingness of supply and trading associated to build a
relationship with companies for anticipating their problems
Stakeholders In retail market, suppliers, trade partners, manufactures, distributors
and customers are considered as main stakeholders of a company
Level of collaboration It includes decision making processes where all stakeholders are
invited to give their suggestion for achievement of business success
Business strategy It refers to plan to make long term collaboration with suppliers to
gain their support in running business successfully.
8