ECU MAN5410: Project Integration and Procurement Report for Coles

This report provides a detailed analysis of project management and procurement strategies in the context of Coles, a major Australian retailer. It begins with an executive summary highlighting the importance of procurement management in enhancing productivity and achieving competitive advantage. The report then delves into the Australian retail trade market, examining market dynamics, customer behavior, and the impact of various stakeholders. It evaluates potential sustainable procurement practices for Coles, focusing on environmental initiatives such as waste reduction and recyclable packaging. The report also explores the impact of technology on procurement, considering both end customers and the supply chain, and it presents a project integration management plan emphasizing procurement aspects. The plan includes procurement management approaches, definitions, contract types, risk assessments, and risk management strategies. This comprehensive analysis aims to provide insights into how Coles can optimize its procurement processes and achieve its sustainability goals within the dynamic retail landscape.

Running head: PROJECT MANAGEMENT
Project Management
Name of the student
Name of the university
Author note

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Executive Summary
Intense competitive business environment is acting as the driving force behind the firms to
improve their increase their degree of productivity. Strong economic performance of the
competitors is also driving the firms to accelerate their financial performance which is the key of
attaining competitive advantage. There lies the significance of procurement management which
paves the ways for the firms to strengthen their strategic function and thus put significant effort
on improving the rate of profitability. Present paper will put forth the discussion of Procurement
management procedure in the context of Coles. Coles is the first full service supermarket retailer,
operating their business in more than 700 supermarkets. This paper incorporates in-depth
analysis of the retail trade market of Australia. The possible procurement practices of Coles will
also be evaluated. This paper has shaded light on the impact of technology on the procurement
practices. A project integration management plan for Coles has also been presented in the paper.
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Table of Contents
Background of the company:...........................................................................................................4
Analyzing the retail trade market of Australia:...............................................................................4
Evaluating the possible sustainable procurement practices for Coles:............................................5
Impact of technology on procurement, both for end customers and for producers in the supply
chain:................................................................................................................................................6
Impact on Supply chain:..............................................................................................................7
Impact on customers:...................................................................................................................7
Project integration management plan that emphasizes the procurement aspects:...........................8
References:....................................................................................................................................13
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Background of the company:
Coles Group Limited is one of the famous and second largest retailers of Australia,
operating more than 2000 retail outlets across the country. The company is operating their
business for more than 100 years and is highly committed towards making the lives of
Australians easier by offering them with high quality of products and services. As per the recent
report, currently the company is providing value and services to more than 20 millions of
customers (Colesgroup.com.au. (2019).
Analyzing the retail trade market of Australia:
The retail market of Australia is booming in a rapid manner. The retail industry of
Australia is considered as the second largest employer of the country immediately after the
healthcare. It is imperative to note in this context that retail sales can have a significant
contribution on Australian economy (Unit, 2015). This is the third largest household
consumption which contributes to the GDP over 50%. However, as per the report published by
National Australia Bank (NAB) Business Confidence Survey, the economy of Australia is
lowering in a rapid manner. In the context of personal and household goods and the car retailing,
the retail industry of Australia is relatively weak (Business Insider Australia. 2019). The attitude
of the customers is an important factor of determining the internal operation of the retail
organizations. It is worthy to mention in this context that the nature of the industry is also an
imperative factor of determining the condition of the retail organizations (Grayson & Hodges
2017).
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The Australian retail industry comprises of e-retailers, general stores, super markets and
departmental stores. In-spite of the increasing environmental concern by the Australian
government, the improper ways of running business by the leading retailers is largely affecting
the environment and thus hampering its sustainability. As opined by Crane, Matten & Spence
(2019) the wastages such as non-biodegradable and toxic materials are not properly which are
the key of rapid environmental degradation. Thus, in order to protect the environment, Australian
government gas imposed certain rules and regulations which the retail organizations must follow
for the sake of protect the environment from the negative aspect of the business. Schrempf-
Stirling, Palazzo & Phillips (2016) observed that the inclusion of creased stress on the
environment by the government is playing a major role in increasing the degree of awareness
among the customers regarding the need of protecting the environment. Thus, it is imperative for
the companies to eliminate the usage of plastic as it is the key of protecting the environment. In
addition, the companies must also ensure the fact that they are following all the regulations,
established by the regulatory bodies.
Evaluating the possible sustainable procurement practices for Coles:
As opined by Lins, Servaes & Tamayo (2017) sustainable procurement is one of the
major ways of maintaining corporate social responsibility without disrupting any kind of
activities in the business. This is defined as the comprehensive set of activities in terms of
improving the process of exchanging the goods or services along with general mode of
operation. From the case study, it is evident that, being the second largest retailer of Australia,
Coles is highly committed towards putting significant effort on sustainability by developing
effective set of activities such as gaining corporate governance by engaging the stakeholders,
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strengthening their public image in the consumers’ community and above all contributing to the
need of environment.
Hopkins (2016) showed that protecting the landfills from the wastage materials is one of
the major commitments of Coles. It has been reported that the wastage materials by the retail
industry are directly affecting the environment. Thus, Coles aims to strengthen their organization
structure which can allow them to reduce more than 90% wastage material. Reducing the amount
of food waste is another vital aim of Coles towards protecting the environment. Cutting down the
amount of waste by 50% is the main intension of Coles. The company aims to use the renewable
energy resources in the way of making the food products. This is the way, through which Coles
can be able to put significant contribution on protecting the environment from the negative
aspect of business (Coles.com.au. 2019). Donating the unsold food is another vital aim of Coles
towards protecting the environment. It is the aim of the company to donate the unsold food to the
NGOs in order to help the underprivileged communities. Recyclable packaging is the major steps
of Coles towards protecting the environment. Wang et al., (2016) observed that the company is
aiming to use that kind of materials in packaging their products which are recyclable. This can
help them to have reduction of plastic accumulation.
Impact of technology on procurement, both for end customers and for
producers in the supply chain:
Prompt advancement of technology is acting as the driving force behind the firms to
strengthen their business process and promote growth in the business. With the assistance of
technology, the companies irrespective of any industry are becoming able to attain significant
innovation which is the key of attaining long term success from business (Panda, Modak &
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Cárdenas-Barrón, 2017). Effective usage of technology is playing a pivotal role for the
companies to maintain healthy relationship with the stakeholders and consumer community. The
impact of technology on the supply chain and customers are discussed below:
Impact on Supply chain:
Technology is largely influencing the supply chain of Coles. Increasing the operational
efficiency of supply chain is the largest impact of technology. Technology is helping to have
maintaining transparency in the supply chain and thereby helping the companies to maintaining
coordination in between the supply chains (Saeidi et al., 2015). With the assistance of
technology, transit can also be improved which is very much needed to improve the efficiency of
apply chan. The problems related to lack of manual labor can also be solved through modern
technology. As per the perception of Utgård (2018) This will pave the way for the retailers like
Coles to follow the activities of supply chain like assortment, assembling, dispatching in a timely
and cost effective manner.
Impact on customers:
Technology will also help the companies like Coles to generate awareness among the
customers regarding the environmental sustainability. Technology is helping the companies to
carry out a range of sustainable activities consistently which will help in protecting the consumer
community in future (Devin & Richards, 2018). At the same time, technology is also helping the
companies to gain effectiveness in terms of using recyclable plastic, creation of recyclable
material and generating biogas.
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Project integration management plan that emphasizes the procurement
aspects:
In order to have the sustainable procurement strategies, it is imperative for the retail
giants like Coles to make a comprehensive plan (Devin & Richards, 2018). The plan can pave
the way for Coles to change their traditional strategies in a systematic manner. The plan, which
Coles can follow, is presented below:
Introduction:
The procurement plan is basically the framework of completing procurement in a timely
and cost effective manner. Working with the suppliers in terms of reducing the food wastage is
one of the key aims of Coles. As food wastage is the increasing concern, it is imperative for
Coles to reduce the wastage within a certain dead line. Thus, it is imperative for Coles to follow
an effective plan for the sake of resolving the wastage material by 2020.
Procurement Management Approach:
 Carrying out a Food Waste Campaign in the community in which Coles is operating their
business. This is the way of generating awareness among the customers about food waste
issue.
 Upgrading the inventory system with the latest technology in order to amplify the store
layout in order to deliver customized shelving sequence which can go directly
with that of the distribution warehouse to the retail floor. Making
considerable investment in the latest technology will also help the
companies to reduce the amount of food wastage by producing the
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food in accordance with the requirement by employing effective food wastage
practice (Chkanikova & Mont, 2015).
 Strong partnership with the farmers in the supply chain is another vital
way, which Coles should follow for reducing the rate of food wastage.
Awareness must be increased among the farmers stop growing more
food than needed. The suppliers must be encouraged to collaborate
with farmers. Through this way, the agricultural food production can be
reduced.
 Coles can also be mores systematic in terms of sharing the data to
that of the farmers. Productivity-enhancing knowledge and techniques
must also be provided to the farmers to improve the firm production
quality.
Procurement Definition
The procurement items which will be procured are to be presented in a systematic manner as it is
the key factor of proper completion of the project. The items which will be procured are
presented below:
Item Justification Timeline
Aligning the suppliers and
organization in one frame
This is the way of achieving the well-run
agreement with that of the suppliers which is very
much needed in order to improve the production
procedure. In addition, this will also help in
keeping the suppliers informed.
Need by 15th
September
2019.
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Segmenting the suppliers As Coles is a largest retailer, it is imperative for
them to segment the suppliers on the basis of
products. This is the way of locating multiple
suppliers in one system.
Need by
November
2019.
Uploading contracts and
other supplier information
This is the way of attaining robust process of
managing the contracts of the suppliers which is
the key of building healthy relationship with them.
Type of Contract to be used:
The procurement contracts, which are to be used in dealing with the suppliers, are as
follows:
 Fixed-Price Contract
 Firm Fixed-Price Contract (FFP)
 Fixed-Price Incentive Fee Contract (FPIF)
 Fixed-Price with Economic Price Adjustment Contracts (FP-EPA)
 Cost Reimbursable Contract
 Cost Plus Fixed Fee Contract (CPFF)
 Cost Plus Incentive Fee Contract (CPIF)
 Cost Plus Percentage of Cost (CPPC)
 Time and Materials Contract
Procurement Risks:
The impending risks of managing the procured items are as follows:
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 Lack of improper schedule and cost expectation of the vendors
 Lack of manufacturing capability of the suppliers
 Financial failure or cash flow problems of the suppliers
 Increased cost of raw material
 Failure of technology
 Increased environmental problem
Procurement Risk Management:
As risk is the impending factor in managing procurement, it is imperative for Coles to
implement the techniques (Chkanikova & Mont, O2015). The suggested procurement risk
management techniques are as follows:
 Identifying and assessing the risk
 Implementing effective risk management strategy
 Transferring the risk of vendor party
 Exploring the likelihood of risk
Procurement Constraints:
The constraints of procurement are as follows:
 Time
 Financial resources
 Limited project team
 Lack of engagement by the stakeholders
 Procurement Risk Management
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 Customer imposed completion dates
Contract Approval Process:
The processes of contract approval are as follows:
 Reviewing the contract
 Reviewing the approvers
 Checking the validity
 Analyzing the situation
Vendor Management:
The process which Coles should follow to manage the venders are presented below:
 Sharing necessary information with them
 Balancing the commitment and competition
 Allowing the key vendors in the decision making process
 Providing proper value to them
 Making comprehensive agreement with the vendors
Performance Metrics for Procurement Activities:
The ways of measuring the procurement activities include:
 Measuring the cost of the products
 Assessing the quality of delivered product
 Evaluating whether the product has been delivered within the dead line
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 Assessing the quality of product documentation
References:
Business Insider Australia. (2019). The dire signals on the health of Australia's vast retail sector
are growing. [online] Available at: https://www.businessinsider.com.au/australia-
economy-retail-sales-unemployment-business-confidence-2019-1 [Accessed 2 Sep.
2019].
Chkanikova, O., & Mont, O. (2015). Corporate supply chain responsibility: drivers and barriers
for sustainable food retailing. Corporate Social Responsibility and Environmental
Management, 22(2), 65-82.
Coles.com.au. (2019). Our commitments. [online] Available at:
https://www.coles.com.au/corporate-responsibility/sustainability/commitments [Accessed
2 Sep. 2019].
Colesgroup.com.au. (2019). About us | Coles Group. [online] Available at:
https://www.colesgroup.com.au/about-us/?page=about-us [Accessed 2 Sep. 2019].
Crane, A., Matten, D., & Spence, L. (Eds.). (2019). Corporate social responsibility: Readings
and cases in a global context. Routledge.
Devin, B., & Richards, C. (2018). Food waste, power, and corporate social responsibility in the
Australian food supply chain. Journal of Business Ethics, 150(1), 199-210.
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Grayson, D., & Hodges, A. (2017). Corporate social opportunity!: Seven steps to make
corporate social responsibility work for your business. Routledge.
Hopkins, M. (2016). The planetary bargain: corporate social responsibility comes of age.
Springer.
Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The
value of corporate social responsibility during the financial crisis. The Journal of
Finance, 72(4), 1785-1824.
Panda, S., Modak, N. M., & Cárdenas-Barrón, L. E. (2017). Coordinating a socially responsible
closed-loop supply chain with product recycling. International Journal of Production
Economics, 188, 11-21.
Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate
social responsibility contribute to firm financial performance? The mediating role of
competitive advantage, reputation, and customer satisfaction. Journal of business
research, 68(2), 341-350.
Schramm-Klein, H., Zentes, J., Steinmann, S., Swoboda, B., & Morschett, D. (2016). Retailer
corporate social responsibility is relevant to consumer behavior. Business &
Society, 55(4), 550-575.
Schrempf-Stirling, J., Palazzo, G., & Phillips, R. A. (2016). Historic corporate social
responsibility. Academy of Management Review, 41(4), 700-719.
Unit, B. (2015). Corporate social responsibility. CRC Press.
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Utgård, J. (2018). Retail chains’ corporate social responsibility communication. Journal of
business Ethics, 147(2), 385-400.
Wang, H., Tong, L., Takeuchi, R., & George, G. (2016). Corporate social responsibility: An
overview and new research directions: Thematic issue on corporate social responsibility.
Routhledge.
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