Table of Contents
1.Retail trade market in Australia.
2.Sustainable procurement practices for Coles.
Impact on procurement for customers and producers in the supply chain.
The retail market of Australia is massive and has the potential to grow rapidly. The country's GDP is almost dependent on the retail industry and its business. According to the report of Productivity Commission, (2020), it has been noticed that there are approximately more than 1.4 million retail business operating effectively within Australia (Productivity Commission, 2020). Besides, as per the reports, retail businesses in Australia accounts for more than 4 per cent of overall GDP and more than 10 per cent of employment of Australian citizens (Productivity Commission, 2020). The retail industry displays massive diversity concerning the nature of the business, size of business, format, and competition within sectors and the natures of sold goods to consumers (Productivity Commission, 2020). It has been identified that both long term trends and current trading situations are challenging to retailers in order to ensure efficiency (Productivity Commission, 2020). In terms of online retailing, Australia represents 6% of overall retail sales which is made up of 4% from domestic sales, and 2% from the overseas market which costs around $4.2 billion (Productivity Commission, 2020). On the other hand, the retails of Australia operate under many guidelines regimes which restrict their competitiveness and the capability to innovate and adopt changes effectively (Productivity Commission, 2020). Household and business customers purchase products both offline and online. It includes approaching physical stores concerning retail business and make a buying decision based on needs and preference. Besides, with emerging technology, consumers are mostly attracted to online purchase which has comparatively declined the rate of going to physical stores individually or in a group (PwC Retail & Consumer Market Insights, 2017). People and consumers are doing shopping mostly online. This indicates that with the merging technological advancements and ease of use, household and business consumers will change their purchase method by being online as it saves time and money effectively (PwC Retail & Consumer Market Insights, 2017). According to the report of PwC Retail & Consumer Market Insights, (2017), around 88% of the shoppers had a positive experience at the time of purchasing online as it helped them make buying decisions efficiently while exploring a wide range of choices and options. As per the case study of Coles group, the company has extended their IT overhaul to supply chain and procurement with SAP as business requirements are changing with the rapid emergence of e-commerce business and demand for online buying by customers within Australia. According to the data and statistics provided by Web Alive, (2019), reveals that Australia is the 10th largest market in terms of e-commerce worldwide by revenue generation. It is expected that the market size will grow about more than AUD 35 billion by the year 2021(Web Alive, 2019). This indicates that consumers and business are eventually engaged in the e-commerce world to make buying and selling decisions consecutively and the trend will grow in the upcoming years effectively. Marketing communication about service quality and products with state of art technological facilitation will influence buyers’ actions in the future (Productivity Commission, 2020).
Coles being the largest supermarket within entire Australia has massive consumer service chain network across Australia. It is the leading retailer nationwide with over 2500 retail stores across the country (Coles Group, 2020). The company has strong strength of employees that consists of around 112,298 overall employees working for Coles (Coles Group, 2020). The company is headquartered in Melbourne, Australia with active retail locations of 807 outlets across Australian province (Coles Group, 2020). There is been a rapid surge of purchasing products and services through online for example e-commerce sites, Amazon. As per the understanding of the case study of Coles, it has been identified that there are several developmental approaches adopted by the company to ensure organizational effectiveness. Numerous studies have demonstrated that procurement of sustainable practices by an organization can transform markets, save funds, time, improves financial viability, enhance competitive advantages, safeguard natural resources, and fosters employment within the region it operates a business (Chkanikova, 2016). However, the company needs to adopt sustainable procurement practices as well to make sure it sustains within the highly competitive market covering the aspects of the betterment of society, environment, and society. There are several practices to ensure sustainable procurement concerning capital, maintenance, and operating activities effectively. Regarding capital, Coles can adopt the strategy of buying and investing in less capital and erecting spaces within the existing business units will save time and money of the company efficiently (Chkanikova, 2016). Constructing new business units’ requirement a massive amount of capital that directly or indirectly damages the environment negatively by polluting and cutting off natural habitats such as trees or land. The building or adding more storages within the existing business outlets of Coles across Australia will save an adequate amount of money and capital that will contribute to sustainability. On the other hand, concerning maintenance, Cole should make an effectual assessment of the existing setup of business and define a code of conduct along with collaborating business requirements. This will help educate employees and build awareness about the code of conduct to ensure productivity and effectiveness while catering service to consumers effectively. Additionally, optimizing internal communication within the workplace will ensure arousal of fewer errors and conflicts; and aligning core business strategies with mission and vision statement of the organization. This will assist in ensuring a sustainable procurement for Cole in terms of maintenance. Operating activities also must be sustainable, by contributing and investing towards corporate social responsibility campaigns across Australia to uplift the needy and towards protecting the environment will help ensure sustainable procurement for Coles. Now, considering the concept of the project versus operating activities, the project is a one-time activity, temporary, and special. Whereas, operations are ongoing and provide repetitive productivity as per its implementation. Thus, by creating a unique service or product, and aiming to generate huge profit and growth through operations will ensure organizational effectiveness and sustainability at the same time. Using paperless works and digitalization of services such as invoice, bills, and payment transactions will save time, money, and help contribute towards green business model (Chkanikova, 2016).
By looking at the provided case study of Coles, it has been understood that the company has transformed massively with trending technologies and business requirements. According to the article by Rider, (2019), Cole has adopted world-class digital and technology platform that will facilitate its global supply chain management more effectively to make the product available for its customer worldwide (Rider, 2019). Availability of products and supplies plays a crucial role in ensuring a retail business’s supply chain management (Rider, 2019). It has to be effective and efficient in order to make sure it is meeting customers requirements and demands expectedly as they are an important aspect in determining an organization’s overall growth and success at the same time. Implementation of new technologies has a significant impact on the procurement of an organization concerning both the aspects; consumers and producers within the supply chain. In another article by Barbaschow, (2019), states that how Cole is extending its IT renovation towards supply chain and procurement with SAP (Barbaschow, 2019). According to the article, the retail supermarket giant of Australia, Cole had announced to updates more of its IT, supply chain management, and finance; and procurement operations to be migrated to SAP (Barbaschow, 2019). The implementation of such updates and changes will improve its business processes effectively in ensuring operational effectiveness. Besides, it will help Cole to meet demands of customers by creating an effectual supply chain management through information technology. Also, with the facilitation of SAP, the overall system of Cole will be upgraded that ensures an increase in productivity, better management of inventory, quality, reduced cost of materials, effectual human resource management, and reduced overheads helps in generating profits and maximization. This indicates that for producers’ execution of SAP within Cole’s business process will help to increase its productivity, supply chain management, better human resource management, and enhancement in overall quality of the retail business effectively (Barbaschow, 2019). On the other hand, it has also been revealed that the retail giant has also implemented GT Nexus which is an international platform for trading made by Infor in order to update various imports, diminish costs, and streamline the company’s global supply chain effectively (Barbaschow, 2019). This signifies that the adoption of new technology will create a positive impact on both to the end customers and the producers as well. The stated implementations of Cole have scalable solutions that will enable the company to minimize working capital by means of lowering stock in shipment and distribution holdings of the company effectively (Rider, 2019). Besides that, it will assist to reduce the transportation cost that includes demurrage, freight, and customs clearance charges (Rider, 2019). Also, it will help to simplify the transactions between freight service providers and the company respectively (Rider, 2019). With the implementation of new technology, it will ease the operational activity and will create a positive impact to enable Cole to meet the future demand of the customers and through an effective supply chain management in future.
Barbaschow, A. (2019). Coles extends IT overhaul to supply chain and procurement with SAP | ZDNet. ZDNet. Retrieved from https://www.zdnet.com/article/coles-extends-it-overhaul-to-supply-chain-and-procurement-with-sap/.
Chkanikova, O. (2016). Sustainable Purchasing in Food Retailing: Interorganizational Relationship Management to Green Product Supply. Business Strategy and The Environment, 25(7), 478-494. https://doi.org/10.1002/bse.1877
Coles Group. (2020). About us | Coles Group. Colesgroup.com.au. Retrieved from https://www.colesgroup.com.au/about-us/?page=about-us.
Productivity Commission. (2020). Inquiry report. Pc.gov.au. Retrieved from https://www.pc.gov.au/inquiries/completed/retail-industry/report.
PwC Retail & Consumer Market Insights. (2017). Retail & Consumer Market Insights | Quarter 3, 2017. PwC. Retrieved from https://www.pwc.com.au/publications/retail-consumer-market-insights/quarter-3-2017.html.
Rider, N. (2019). Coles adopts ‘world-class’ digital platforms - Retail World Magazine. Retail World Magazine. Retrieved from https://retailworldmagazine.com.au/coles-adopts-world-class-digital-platforms/.
WebAlive. (2019). Australia's Ecommerce in 2019: Essential Data and Statistics | WebAlive. WebAlive. Retrieved from https://www.webalive.com.au/ecommerce-statistics-australia/.
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