Project Integration and Procurement Management: Coles Australia Report

This report provides a comprehensive analysis of project integration and procurement management, specifically focusing on Coles Australia. It begins with an overview of the Australian retail trade market, examining consumer behavior, market trends, and the influence of key players like Coles. The report then outlines potential sustainable procurement practices for Coles, emphasizing the importance of recyclable packaging, local sourcing, and ethical supply chain management. It further explores the impact of new technologies, such as machine learning and IoT, on procurement processes. A detailed project integration management plan is presented, including procurement definitions, contract types (fixed price), risk management strategies, cost determination methods, and standardized documentation. The report also covers constraints, contract approval processes, vendor management techniques, and performance metrics. The document aims to provide a framework for Coles to enhance its procurement practices, promote sustainability, and adapt to the evolving retail landscape.

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Project Integration & Procurement Management
Coles Australia
9/7/2019

Project Integration & Procurement Management
Table of Contents
Retail Trade Market in Australia...........................................................................................................2
Possible Sustainable Procurement Practices for Coles...........................................................................2
New Technologies & Impact on Procurement.......................................................................................3
Project Integration Management Plan....................................................................................................3
Introduction.......................................................................................................................................3
Approach & Methodology.................................................................................................................3
Procurement Definition.....................................................................................................................3
Types of Contracts.............................................................................................................................4
Risks & Management of Risks..........................................................................................................4
Cost Determination............................................................................................................................5
Standardized Procurement Documentation........................................................................................5
Constraints.........................................................................................................................................6
Contract Approval Process................................................................................................................6
Decision Criteria................................................................................................................................6
Vendor Management.........................................................................................................................6
Performance Metrics for Procurement Activities...............................................................................7
References.............................................................................................................................................8
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Project Integration & Procurement Management
Retail Trade Market in Australia
The retail sales of Australia were recorded to be 3.7% in the year 2018. The country is one of
the most urbanized societies all across the globe and there are over 24 Million people that
reside in the urban cities, such as Sydney, Melbourne, Perth, etc. The country recorded the
second highest average wealth per adult and the retail sector has shown a positive incline in
spite of the slower growth in wages and increase in the household debt (Mordorintelligence,
2019).
The future trends in the retail trade market of Australia depend upon the factors, such as
consumer spending and involvement of the foreign firms. The major players in the Australian
retail trade market include ALDI Group, Woolworths Group Pty Ltd, JB Hi-Fi Limited, Big
W, Metcash Ltd, and Wesfarmers Ltd (Cummins, 2019).
Possible Sustainable Procurement Practices for Coles
Coles Australia is an organization that is in existence since past 100 years. There are more
than 115,000 employees that are engaged with the organization. There are over 2,500 retail
outlets of the organization and the supplier network comprises of more than 5,000 suppliers.
Coles Australia is an organization that has always maintained its corporate social
responsibility and has made sure that it contributes towards the society and the environment
through its business operations and practices (Coles, 2019).
The company made a donation of over $65 Million to the community in the year 2017. The
company also donated 7.2 Million Kilograms of food to the community. There are certain
sustainable procurement practices that the organization can adopt to enhance the overall
sustainability.
Coles has made a commitment to make the brand packaging recyclable by the end of 2020.
This shall also reflect in the procurement of the packaging material. The procurement of
single-use plastic material shall be immediately stopped and the shift towards the recyclable
and organic packaging shall be made. The same shall reflect in the packaging of the food and
beverages. The fresh produce and vegetables shall also be procured from the local suppliers
that follow organic modes of farming.
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Project Integration & Procurement Management
New Technologies & Impact on Procurement
There are some of the new technologies that are having an impact on the overall procurement
mechanisms. The smart technologies, such as machine learning and artificial intelligence are
now regulating the procurements and the supply chain processes. For example, the need for a
particular product is estimated on the basis of the historical data and the supply chain
requirements are determined accordingly. The Internet of Things (IoT) is a technology that
has enabled stronger integration of the different business areas, such as logistics,
procurements, supply chains, customer relationship management, and etc. to make the
procurement and supply chain decisions accordingly (Singh & Benyoucef, 2016).
Coles Australia is an organization that has always made sure that it adopts the latest
technology in all the services and mechanisms that it carries out. In the future, such
technological changes will be witnessed in the case of Coles Australia as well.
Project Integration Management Plan
Introduction
The project integration management plan focuses on the procurement management in the
organization to make sure that the sustainable procurement practices are included in the
organization. The plan covers the methodology that will be followed along with the details of
the contracts, project management areas, and constraints (Knutsson & Thomasson, 2016).
Approach & Methodology
The procurement approach that will be followed shall include sustainability of the
procurement procedures and the entire business operations as the primary goals. The
Procurement Manager along with the Project Manager shall make sure that they manage the
entire process. The procurement team along with the logistics and supply chain resources will
be assigned to ensure that the procurements are effectively handled. The phased approach
will be used rather than carrying out the process in one attempt (Mansi & Pandey, 2016).
Procurement Definition
The procurements refer to the process of acquiring the required services, tools, materials, and
equipment for the project from the third-party vendors in order to achieve the goals and
objectives.
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Project Integration & Procurement Management
Types of Contracts
The fixed price contracts will be used for all the procurements that will be carried out. These
fixed price contracts will be prepared for all the small, medium, and large-scale suppliers.
The terms of services along with the cost details, delivery schedule, compliance
requirements, and sustainability goals will be included in the contracts (Rahman & Islam,
2017).
Risks & Management of Risks
There may be a few risks that may occur during the procurement process. The list of these
risks is provided below.
 Communication gaps with the vendors
 Conflicts during the contract development and management approach
 Legal non-compliance and regulatory non-compliance issues
 Lack of support from the senior management
 Mismatch in the expected and final product
 Overrun of the schedule/budget
 Operational errors
There will be a defined process that will be followed for the management of these risks that
have been identified.
The risk register is developed to map the risks with their likelihood and impact along with a
response strategy that shall be applied (Murray, 2016).
Risk Likelihood Impact Priority Response
Communication
gaps with the
vendors
Moderate Moderate 4 Sharing
Conflicts during
the contract
development
and
management
approach
Low High 3 Avoidance
Legal non- Low High 5 Avoidance
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Project Integration & Procurement Management
compliance and
regulatory non-
compliance
issues
Lack of support
from the senior
management
Low Moderate 7 Avoidance
Mismatch in the
expected and
final product
Moderate High 1 Avoidance
Overrun of the
schedule/budget
Moderate High 2 Avoidance and
Mitigation
Operational
errors
High Moderate 6 Avoidance
Cost Determination
The determination of the costs will be done on the basis of the Request for Proposals and the
statement of work that will be submitted. The market analysis will be done to understand the
costs. The vendors will provide the responses along with the detailed costs and cost-benefit
analysis.
Standardized Procurement Documentation
There will be a few documents that will be prepared and shared during the procurement
execution and management processes.
 Request for Proposal (RFP): It will include the information on the requirements and
backgrounds along with the price details, terms, conditions, selection criteria, and
norms.
 Non-disclosure agreement for the protection of the data and information sets will be
shared.
 Contract (Fixed Price)
 Performance evaluation criteria
 Performance evaluation and management plan
 Change Request
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Project Integration & Procurement Management
Constraints
There will be four major constraints that will be present.
The first will be the cost constraints and it will be necessary to stick with the costs that
estimated for the entire process. The second constraint will be in terms of the schedule. The
overrun of the schedule will not be tolerated any condition and shall be avoided. The third
will be technology. There will be technologies that will be used in the procurement processes
and the overall project management. The associated norms and security constraints will be
required to be followed (Bienhaus & Haddud, 2018). The resources involved in the process
will also be constraints as the distribution of the project processes and activities shall be done
in accordance with the resource skills.
Contract Approval Process
The contract will be prepared with the vendor(s) in the presence of the Procurement Manager,
Project Manager, and the procurement team representatives. The internal approval will be
done by the two managers which will then be sent to the legal department of the organization.
The legal expert will overlook these contracts and on approval, it will be sent to the Board
and CEO. The final approval will come from the CEO (Lemar, 2018).
Decision Criteria
The procurement contracts will be prepared and approved on the basis of the adequacy of the
following:
 Overall cost
 Stated monetary benefits
 Schedule and timeline
 Terms and conditions
 Management and monitoring involved
 Performance in the past
Vendor Management
The management of the vendors will be necessary during the procurement and integration
process. There will be weekly meetings that will be conducted by the Procurement and
Project Managers with the respective vendors to obtain the status. The issues, if any, will also
be resolved in such meetings. There will also be weekly reports shared by the vendors with
the managers that will comprise of the overall weekly summary, issues, and achievements.
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Project Integration & Procurement Management
There may be certain changes that may be required to be done by the vendors. Such changes
will be shared in the form of formal change requests.
Performance Metrics for Procurement Activities
The performance metrics for procurement activities will be used for the vendors as illustrated
in the table below.
Vendor
ID
Overall
Rating
Cost to
Deliver
Total Time Compliance Status –
Quality
Conflicts &
Issues
1
2
3
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Project Integration & Procurement Management
References
Bienhaus, F., & Haddud, A. (2018). Procurement 4.0: factors influencing the digitisation of
procurement and supply chains. Business Process Management Journal, 24(4), 965-
984. doi: 10.1108/bpmj-06-2017-0139
Coles. (2019). Coles Supermarkets. Retrieved 7 September 2019, from
https://www.coles.com.au/
Cummins, C. (2019). Luxury retail defies weak consumer spending. Retrieved 7 September
2019, from https://www.smh.com.au/business/companies/luxury-retail-defies-weak-
consumer-spending-20190903-p52njr.html
Knutsson, H., & Thomasson, A. (2016). Innovation in the Public Procurement Process: A
study of the creation of innovation-friendly public procurement. Public Management
Review, 16(2), 242-255. doi: 10.1080/14719037.2013.806574
Lemar, M. (2018). Providing Transparency & Streamline the Procurement Process through
the e-Procurement Management System. Joho Chishiki Gakkaishi, 28(2), 208-213.
doi: 10.2964/jsik_2018_021
Mansi, M., & Pandey, R. (2016). Impact of demographic characteristics of procurement
professionals on sustainable procurement practices: Evidence from Australia. Journal
Of Purchasing And Supply Management, 22(1), 31-40. doi:
10.1016/j.pursup.2015.06.001
Mordorintelligence. (2019). Australia retail sector - Growth, Trends and Forecast (2019 -
2024). Retrieved 7 September 2019, from
https://www.mordorintelligence.com/industry-reports/retail-industry-in-australia
Murray, J. (2016). Debate: The need for procurement risk management. Public Money &
Management, 33(4), 285-287. doi: 10.1080/09540962.2013.799834
Rahman, M., & Islam, M. (2017). Scope and approaches of integrating sustainability issues in
public procurement process for sustainable development of Bangladesh. International
Journal Of Procurement Management, 10(2), 163. doi: 10.1504/ijpm.2017.10002179
Singh, R., & Benyoucef, L. (2016). A consensus based group decision making methodology
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for strategic selection problems of supply chain coordination. Engineering
Applications Of Artificial Intelligence, 26(1), 122-134. doi:
10.1016/j.engappai.2012.03.013
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