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MMM267 Business Logistics - Deakin University

Supply Chain Management in Cole Supermarket Assignment

Research the literature on logistics/supply chain management, use a wide range of theories and concepts to inform and underpin your critical analysis of the practical information obtained about the organisation, and offer recommendations for future improvements.

1 Introduction
The report is about the supply chain strategies and their applications in the Coles supermarket inAustralia. Coles has been operating as a supermarket since 1914 in Australia and has become the industry leader. It has expanded its business over the years and now it has more than 100 stores in Australia. It has 21 centres of distribution that are providing pallets, cartoons and consumer units to stores and end users in Australia. Coles has a network of supply chains and it uses various components to continue its operations in a smooth way.

1. Building on Task 4 of Progress Report, discuss two logistics/supply chain strategies of your chosen company. These strategies could be either employed by your chosen company and/or arerelevant to the industry of your chosen organisation.

2 Supply Chain Management Strategies in Coles

The supply chain is the sequential relation of the suppliers of raw material and distributors of finished goods and services. Coles is doing a good job in the industry of supermarkets. Coles is striving hard to maintain good relations with its supply chain partners. Coles focuses on omitting the complexities relating to supply chain management and want to deliver the high-value products and services in the market.

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2.1 The long-term investment strategy
Coles is using the strategy of long-term investment and to pursue this strategy it has done partnership agreement with Witron. It is using the latest technology for updating the system of the supply chain. Witron will use its investment to modernize the supply chain system in Coles supermarket. This partnership with Coles will help in increasing the level of production in the long run. Coles is using the long term investment strategy to modernize its supply chain. Long term investment enables the company to increase its revenues with minimum wastage, improve its orderliness. Risk of a shortage of stocks is minimized and Stock will be available at Coles stores. Business to Business e-commerce helps Coles in expanding its business across the globe electronically. It helps it in identifying the product needs and making purchase orders and their acknowledgements.B2B system has electronic compliant cells which receive complaints about the product delivery, order taking and various matters. The strategy of long-term investment will also help in decreasing the cost of the supply chain. It will also increase the competitiveness of Coles in the market. Its competitors in the industry of hyper stores and superstores are Istributors and Woolworths group.Istributors is its major rival in the market as it also operates as a supermarket. Woolworths group operates in speciality stores.Almost 10,000 employees are working at different subsidiaries of the Coles store,long term investment strategy also helps in providing a safe and healthy environment to its employees.

The company is also trying to manage its total investment which is required for the development of novel distribution centres. The company has planned to do it by establishing a capital allocation procedure as well as return hurdles. Under this new strategy, two new ambient distribution centres will be opened in the regions of Queensland plus New South Wales. It has been estimated that for the total development of these two new stores the company will have to invest around $950 million in the time period of 6 years.

2.2 Process Automation
The opening of new distribution centres is the part of the automation strategy which Cole is using for improving the overall quality of products and enhance customer satisfaction. Major infrastructure is being taken place in the company which will help it in reducing the waiting time for the consumers. the shelf-life of the products will also improve due to the new procedures of the facility.

The company has moved towards automation because it required a salutation which could increase the process efficiency while at the same time ensuring the security of the supply as well as managing the cost. The cost-reducing objective has easily met by change such as due to automation the labour for palletizing crates has been reduced by 100%. Moreover, the company has successfully reduced the truck loading labour by 50% while cross dock cost has been reduced by 75%. This is mainly because lesslabour is required for the accomplishment of the tasks.

It could be said that due to the implementation of new systems the company can easily and directly control the security and cost of the procedures. Automation has increased overall responsiveness and lead-time has reduced. Pallet crates can directly push to the distribution centres way quicker or they can also be placed in the centres a day earlier. Through this method, Cole has better inventory management and also the shelf life of the products have been improved.

2. What problems do you see with your chosen company's or industry's current strategy?

3 Problems in the Supply Chain Management

There are following some of the key issues which the company can face due to implementing automation at the workplace:

3.1 Regulatory requirements
As the popularity of automated supply chain is increasing the government is crafting a new set of rules and regulations which can increase the problems for Cole. This is mainly because most of the countries around the world are facing the issue of e-waste management. thus, the countries are beforehand making such rules and regulations due to which the things get managed on time and effectively. Re-cycling and e-waste management demand depends on the region and country(Kenneth & Traver, 2013).

Rules and regulations regarding data privacy are also strict. This is mainly because the sensitive data of customers are present on the site and hackers can hack and then use it for their own benefits such as they can use it for kidnapping, ransomware and other such things. Moreover, the data of the company is also present on the site and if the hackers obtain it from the online site and then use it for either demanding money or damaging the overall reputation of the company.

These regulations can make the whole procedure quite complex for compliance as well as development challenges for the company. it increases the ultimate cost for the management because extra measures need to be taken. Moreover, if the privacy threat for the consumers is too high then they can file the case against the supermarket.

The threat of malware is also high because if the software solution has a low security then easily viruses can attack the system and prove to be a potential threat for it.

3.2 Relentless Cost Pressure:
Reducing the overall cost pressure is necessary for the companies which have automated supply chain rather than those who are dependent on manual handling of the things. Cost reduction also becomes necessary for various competitive as well as product-related reasons. Moreover, over the time new generation products mostly have radical price reductions which have the potential to destroy the status quo economic profile on the basis of which the supply chain operations were working.

As the trend is increasing more and more companies are entering the automation due to which Cole needs to innovate new dynamics in the business for maintaining the hold in the market and stay competitive.

3.3 Labor Shortage:

Labour shortage is the key issue which the company can face in the near future. although currently it has reduced the employees and saved huge amount but due to automation, the demand of drivers will increase because the people are using online methods to order the things and to deliver them at their doorstep expert and experienced drivers will be needed in the large number. Too much dependence on the online systems can be bad for the company because if the system is not working properly then it can face huge loss(forbes.com, 2019). Moreover, late deliveries can have a significant negative impact on the consumers because it is common customer behaviour that they want the ordered item in the set time period.

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4 Analysis

4.1 Privacy Threats & Legal Requirements

To reduce the risk of any involvement in their data they can use different technologies and keep their system from hacking, they can take measures to ensure that their costumer's data is safe. They can just reduce their data and use the relevant data only to avoid clusters of data on site. saving only specific information of company and user will reduce the risk of any data loss or misuse of data. Converged storage is another tool which they can use to make their system effective and reduce the errors in their system, which may influence data accuracy(Sadiq, et al., 2016). This system is cost effective as well. another recommendation is that company should sanitize their data appropriately, that can help or remove the privacy issues. It is recommended that they should filter their data before uploading it on the site, other than that data sources should be linked with reference so that any data element can be related to issue could be traced on time. Data can be saved in different areas to reduce the risk of loss of all the data at one time, for that they can hire an expert who could manage all the related information and record that which portion is saved at a specific location. The company should use firewalls to ensure the data safety, it will inform them on time in case of any involvement in the system.

4.2 Employee Management
Employee management is also necessary for the supermarket because in the near future it can face the issue of employee shortage. Although driverless trucks and robot trend is increasing in the manufacturing and service firms of Australia but the trend is not very much common and it requires huge capital thus till then the company can use human resource for the whole management. more drivers can be hired by the company for delivering the products on time to the relevant consumers. moreover, to save the cost it can use a better approach such as the company can do a partnership with an organization which deliver the products to the consumers. for instance, Australian Post is the government-owned organization which deliver the e-commerce and other parcels from one region to the other. They have a large team who ensure that consumers get their desired products at their doorsteps in a short period of time(Raymond, et al., 2017).

Cole supermarket can collaborate with it for delivering the products to the consumers on time instead of hiring the new drivers and establishing its own network. The same money can be used for enhancing the online presence introducing robots in the stores and expanding the network in other regions. Overall this approach will be cost and effort saving for the company.

5 Conclusion
It can be concluded that supply chain management is a necessary part of the business. effective SCM can save a huge amount of company and can also improve the efficiency of the work. Currently, the Cole supermarket is focusing on automation of the entire supply chain which is a good thing because the cost will be saved and the shelf life of products will enhance. However, in automation the privacy threats are high and the company can also face various legal issues. thus, the suggestions have been provided to deal with the situation.

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