BMO 5574

Supply Chain and Logistics Management

Table of Content
Executive Summary.................................................................................................................2 Introduction .............................................................................................................................3 Company Overview..................................................................................................................4 Research Methodology.............................................................................................................4 Supply Chain Audit..................................................................................................................5 Supply Chain Objective.......................................................................................................5 Audit of Current Supply Chain ...........................................................................................5 Suppliers ..........................................................................................................................6 Distribution Centre...........................................................................................................7 Retailers............................................................................................................................8 Customer..........................................................................................................................8 Information Communication Tools used at Coles Express.....................................................9 Electronic Data Interchange (EDI)......................................................................................9 Warehouse Management System ....................................................................................10 RFID...................................................................................................................................11 Customer Requirement ..........................................................................................................11 Order Winning Criteria .....................................................................................................12 Strategic Vision towards Improvement of Supply Chain......................................................13 Lean Value Stream.............................................................................................................14 Just in Time........................................................................................................................15 SOLP Implementation .......................................................................................................15 Integration between Links in the Supply Chain.....................................................................16 Weak links in the Supply Chain.............................................................................................17 Required Actions ...................................................................................................................20 Conclusion..............................................................................................................................22 Action Plan.............................................................................................................................23 References..............................................................................................................................24

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Executive Summary
The criteria on which different organizations compete, is not profit or their sales but their Supply Chain Management. Because the organizations with a smooth and well running supply chain will surely have competitive advantage over competitors. Coles Express is a member of the Coles Group and has a tie up with Shell Australia Pty Ltd for the petroleum products being traded at Coles Express sites. The Supply Chain Structure of Coles Express is vast as they trade in fuel products and also the stores deals into various convenience items. The Supply Chain structure is scrutinized under various models and an audit conducted of their current structure shows the performance level of their current supply chain and some of the weak links that are hindering their Supply Chain from functioning optimally are identified. The current Supply Chain structure is working well for Coles Express but they need to take steps in some of the areas in the current structure so as to gain optimum utilization from all the available resources and gain a competitive advantage over their competitors. Coles Express has realized the fact that managing their Supply Chain properly can play a major role in gaining an upper hand in the competition they are currently facing in the market

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Introduction
Supply Chain Management is observed productively if the products/services are delivered in the right quantity, to the right location, at the right time, and at the minimal cost (Clarkston 2000). Todays as well as future success in business activity greatly depends on serving the right customers, finding the right suppliers and nurturing trust between various parties involved in the business activity. To accomplish these objectives, it is crucial for the organizations to value the concept of supply chain management (Sahay 2000). The essence of supply chain is to develop a sustainable competitive advantage by reducing investment without sacrificing customer satisfaction (Lee and Billington 1992). Today, with the increased use of new electronic methods and tools and with the advent of integrated supply chains, the environment in which the organizations carry business has changed drastically. The sharing and distribution of information throughout the supply chain has now become easy due to the activities like planning and forecasting. These activities have also helped in reducing the risks involved in implementing an action plan (Cassivi 2006). Thus, SCM is an important concept which allows the organization to understand its very own competitiveness.

Figure 1: Physical Flow of goods in a Supply Chain

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Company Overview
There are many companies in Australia dealing in Service Station Industry. Coles Express is one of the leading players in the business with around 600 outlets throughout Australia. Eureka Operations Pty Ltd. owns the brand Coles Express and it is a 100% subsidiary of Coles Group Ltd. Coles Express works under a tie up with Shell Australia Pty Ltd in order to provide fuel to its customers and they provide various convenience products to the customers like cigarettes, drinks, bread, milk, basic groceries, magazines and other general merchandise making their supply chain a two way supply chain one working for the fuels they provide and second for the convenience items they sell to their customers. Coles Express, with around 600 service stations throughout Australia, enjoyed a turnover of $6187 million in 2006(Coles Myer 2006). All of the outlets provide convenience items along with fuel to its customers. Some of them also have add-on to their services like Car Wash, ATM facility, City Link and Bill payments at Touch Screen kiosk, etc.

Research Methodology
Majority of the material covered in the report is derived by speaking to people directly related to the supply chain of Coles Express. An Overview of their current supply chain at Coles express is understood by speaking with Nidhi Mago, Operational Manager at Coles Express, Mentone. Some methods used to obtain information were interviews and organisations websites. Also we were in continuous dialogue over telephone with line managers and other officers of Coles express. We have made an attempt in understanding the supply chain of Coles Express, identifying the problems that may be hindering some of its strategic objectives and accordingly an effort has been made to provide some recommendations on the basis of our findings.

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Supply Chain Audit

Supply Chain Objective
The customers always remain of prime importance for Coles express and it will continue investing in products that help them improve their customer satisfaction. The business objectives set by CEO of the company are as follows A wide range of products that are good value and good quality, including Australias best house brand ranges. A constant focus on improving service and product availability. An ongoing program of store openings and refurbishments, ensuring our stores are modern, easy to shop in and close to where people live and work (Coles Myer 2006).

Audit of Current Supply Chain

Coles Group has several members under one umbrella and each has their own unique supply chain. The structure of Coles Express Supply Chain as understood by talking to operational managers at some branches of Coles Express brings forward the following supply chain structure at. Fig 2 draws a picture of current supply chain structure at Coles Express
Fig 2: Flow of goods in the Supply Chain of Coles Express

Manufacturers Coles Express Distribution Centre (VIC)

Retailer CE (Richmond) Retailer CE (Mentone) Retailer CE (Malvern)

All the DC s have Contracted E -fill to Arrange for transportation Of weekly logistics

Customer Customer Customer Customer Customer Customer

Suppliers

Wholesalers

Orders are placed to Suppliers for CE Weekly Requirements

Logistics are then being Delivered to Stores at different Locations

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Coles Express stores located at different locations forwards their weekly requirements of goods to the Distribution Centres located at different locations. The Distribution Centre then forwards the orders to various suppliers and manufacturers. Then the ordered goods are supplied by suppliers and manufacturers to the distribution centre. They arrange the transportation of each stores requirement with help of E-Fill Australia, the contractors for delivery of the weekly logistics to Coles Express Stores. Coles Express Stores receives their ordered goods weekly from the distribution centre and some of the perishable and other goods are directly supplied to the Stores from the suppliers. A brief explanation of each link of their current supply chain is as follows.

Suppliers
Suppliers or Manufacturers are one of initial links for Coles Express Supply Chain. Coles Express has a number of supplier supplying goods. Different suppliers supply drinks, chips, cigarettes, etc. A majority of supplier in case of Coles express are original manufactures. As Coles Express requirement range in big numbers, they can eliminate some links in the supply chain directly contracting the manufacturers or first wholesalers in supply chain, making it a less complex and more cost effective process. Suppliers receive weekly orders from Coles Express Distribution centre, which they supply to the distribution centers. In case of Perishable goods like milk products, juices suppliers are directly contacted by the Store itself eliminating the Distribution Centre in between. Such supplier receives the orders by fax from each of the store. Limitations: One limitation that many of Coles Express suppliers face is lack of proper information systems. Not all the suppliers have information system and support for dealing with requirements of current supply chain. They lack the infrastructure and it is hindering their growth.

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Distribution Centre
Coles Express has their Distribution Centers located in all the states. The orders placed by the stores are being forwarded to all the suppliers and when such goods are received from the suppliers, they are being stored at the warehouses owned by the distribution centres, arranged on palates according to the store requirement, packed and sent off. Distribution centre of Coles Express has contracted E-Fill Australia, who takes the responsibility of arrange the distribution of goods to individual stores. EFill Australia collects the logistics orders from Coles Express Distribution centre and arranges the logistics to be delivered to each store. The Distribution centre plays a very important role in current Supply Chain as it arranges all the goods to be transported from suppliers to retailers. But it cannot be said that it is having no trouble in managing the flow of goods in the supply chain Limitations: One limitation faced by distributor centre is that of numerous suppliers supplying goods. It is very obvious that nature of Coles Express Business requires acquisitions of goods from various suppliers. Yet it creates difficulties for the Distribution centre to wait for all the suppliers deliveries before they can start dispatching goods to the stores. Sometimes if the supplier delays in supplying goods on time, the deliveries have to be sent without those goods, just to make sure rest of the goods are supplied on time. Having one single supplier to fulfill all the requirements is definitely going to help the Distribution Centre function better than the current state.

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Retailers
Retailers in the Coles Express Supply Chain are none other but the Coles Express Stores themselves. They play a vital role in the supply chain as it is the customer contact point with the company. They are the base of entire supply chain as there will be no Supply Chain if there are no sales to customer. Each store has a different profile of clientele, based on which it determines which products they would like to display for sale in their store. These orders are also accompanied by sales forecast made from past experiences. Each store manager forward their requirement weekly based on their requirement and thats how the supply chain gets started. The information flows upstream to distribution centre and then to suppliers and then the ordered goods go through the supply chain structure to reach the stores. Limitations: Some limitations that the retailers face are poor forecasting and poor product selection. The methods of forecasting are not very accurate leading to excess stock lying in the warehouse. And the product selection at each outlet of Coles Express is general and not according to specific requirement of Customer in that area, leading to failure in achieving maximum sales.

Customer
Customer plays the most important role in any supply chain because it only possible to keep the supply chain running when the customer buys products. Coles Express clientele basically consist of nearby communities and people using the highways or roads on which Coles Express stores are located, wishing to stop and fill their tank and buy some convenience products on their way back home. Customer requirements is the first link of information flow in the supply chain and Customer itself is the last link of the physical flow of product. Making customers an important link in the Supply Chain

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Information Communication Tools used at Coles Express

Coles Express defines Information Communication in terms of advantages received after reducing the cost associated with such information tools. Information Communication technologies improves supply chain performance by reducing inventory cost and maintaining proper levels of stock while manual orders can be subject to human error. Coles Express uses various Information Communication tools throughout its supply chain network. It helps by providing them with better decision making based on technology and making their supply chain more efficient.

Electronic Data Interchange (EDI)

Electronic Data Interchange can be understood as replacement of paper based system with the electronic form of ordering using various computer applications. EDI supports structured business messages and transmits them electronically between computer applications (Clarke 1998). The objective for using Electronic data transfer is to improve the Supply Chain Functionality with help of computer applications. There can be some mistakes while ordering data manually due to improper stock take or other factors, but when the order placement is done electronically chances of any flaws in orders reduces. Hence Electronic Data Interchange helps ordering the right quantity of goods and making sure the amount of stock is optimum, not more or less then required. In Coles Express EDI is used to for orders but they are also placed manually. Some of their suppliers are still using paper based system and dont have electronic methods to use modern methods (Coles Myer 2006). Figure 3 below explains data transfer in EDI as explained on Coles Website.

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Supply Chain and Logistics Management Fig 3: Data transfer between applications in an EDI

(Coles Myer 2006)

Warehouse Management System

Warehouse Management system is used to control of movement and storage of goods within a warehouse and record the associated transactions. Coles Express uses warehouse management system designed particularly for supporting their distribution network. They plan to gain high efficiency in the operations on the basis of such Warehouse Management system. Coles Express uses Barcode Scanning technology for the entire product group at Coles Express; hence it is much easier for them to operate their operations efficiently. Tracking and transportation of goods becomes much easier under the Warehouse Management System. And the supply chain functionality becomes much smoother due to fact the tracking of goods under Warehouse Management System will not take more than a few seconds.

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RFID
The use of RFID technologies has started in supply chain networks and it definitely can revolutionize the supply chain. By automatically tracking the movement of good in the supply chain, it will help reducing cost and complexity and increasing efficiency. Coles Group Ltd. has partnered with Sun Microsystems for a trial implement Radio Frequency Identification (RFID) for their retail industry. The trial is aimed at tracking the location of goods in the Supply Chain. Peter Mahler, Chief Information Officer at Coles Group Ltd, considers RFID to be cutting edge technology. And the trial implementation was aimed at testing whether it can reduce the complexity of their busy supply chain and help them provide simpler and cheaper services to their customer (Sun Microsystems 2004).

Customer Requirement
In any supply chain, customers are not only external customer, but every link in the chain is like a customer. Hence it is important to study the requirement of every link of supply chain to understand Customer Requirement. Customer Requirements shape the structure of Supply Chain. Any supply chain will operate efficiently only when the Customer Requirement are understood correctly. Factors like quality, price, availability and proper display of goods are examples of order winners for the customer. Study of customer buying patterns can help boost sales of all other products with fuel in Coles Express stores leading profit maximization.

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In Coles Express Supply Chain different customers are Consumer The consumer is the ultimate customer in any supply chain. In this case nearby population are generally the customers at Coles Express stores. It is important to understand their requirements and expectations from the stores in order to gain their confidence. Prices, quality, discounts, reliability are some of the factors that work as motivational factors for end consumer. Retailers The retailers in this supply chain are Coles Express stores in different locations. They are considered as customer in the supply chain as they purchase goods in order to sell it to customer. At the time of purchase the stores look after various factors in order to minimize their cost and maximizing profits. Some of the order winning criterias for the retailers are factors like quality, product life, delivery speed. Distribution Centre Coles Distribution centre are purchasing all the goods from the suppliers on behalf of stores. They want to make sure that they procure all the goods at a low cost and only optimum level of stock is procured so that unnecessary inventory does not block business capital. Some of the order winners for Distribution centre are reliability, availability, delivery speed. Customer requirements and expectations cannot be generalized. They depend on product group, time, locality, customer class etc. Coles Express is pretty much successful in realizing its customer requirements by developing a deeper customer insight and by implementing suitable approaches. The management of Coles Express has given value to price, quality, service, product availability requirements etc and has accordingly designed the product ranges and services for their customers.

Order Winning Criteria

An organization is successful in winning orders from its customers on the basis of its uniqueness, i.e., how different it is from other organizations, in 12

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short on its competitiveness (Sadler 2007). The outcome tends to be positive if the organization is being competitive. The customers decide the store from which they want to purchase their products on the basis of certain criteria which is Order Winning criteria. These criterias may be different for customers and organizations. Hence, there should be some competitive forces which balance these criterias. A steady sales growth may be achieved by converting the operational capabilities into a balanced fit of criteria, which otherwise may result in a negative growth in sales. Below are some of the competitive criterias devised by Coles Express on which they expect to win orders for their groceries. Competitive Factors Availability Fuel Prices Grocery Prices Discount vouchers Reliability Design Product Life Delivery speed Quality Total Chain Wide As-is Aim 15 15 10 10 10 10 10 10 10 100 % (Recommendation) 15 15(reduce the price) 15 (reduce the price) 10 10 5 (reduction) 10 10 10 100 % Q Q Q Q Q Q Q Supplier Stages DC Coles Q Express Q Q Q Q Q Q Q Customer

Strategic Vision towards Improvement of Supply Chain

It is important for any organization to periodically evaluate its supply chain so as to implement changes in their supply chain structure wherever and whenever required. These changes can then result in increased trade for the company and hence, in maximizing the profit. Once the performance of current supply chain is evaluated, many different principles can be applied in order to gain improvements in the current supply chain. Some

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recommended principles for Coles Express which can help them improve their current Supply Chain structure are.

Lean Value Stream

A lean value model aims at better meeting customer demands but by using less resource. Lean Thinking Model aims at designing a production system that will deliver a custom product within no time on customer demand but do not hold any unnecessary inventory in between process (Howell 1999). The principles on which Lean Thinking Model is based are Identification of factors that are value to the Customer Analysis of the steps involved in the current supply chain Creating a product flow through all the value adding steps in the supply chain Supply only those products which are Pulled by the customer i.e. which are actual needs of the customer, rather than pushing products onto him. Aim for perfection is fifth principle of lean thinking. Value stream mapping includes evaluating all the steps, value adding and wasteful, for bringing the product to end customer from raw material. The aim is to study cycle time, people and losses, if any involved in bringing the goods and services to the end customer. The Lean Value principle removes all the unnecessary wasteful steps from the Supply Chain provided all the principles of Lean Thinking model are strictly adhered to. Looking at the supply chain Structure of Coles Express it is safe to recommend that should follow the Lean Value Stream Model, which would help them reduce unnecessary blockage of Capital in form of large level of stock in storeroom and providing only those commodities that are actually required by the customer.

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Just in Time
Due to increase in competition firms are forced to gain competitive advantage over there competitors by providing wide range of quality products at a competitive price. Just in Time is one strategy that can help organization to get an upper hand over there competitors by reducing unnecessary wastage of resources by eliminating time gap in procurement and sales (Mia & Winata 2004). Precise forecast are aimed with Just in Time with a view to stop unnecessary blockage of capital in form of large stocks and helps increase return on investment. Stock is ordered only when they go below certain level. It helps save cost and organizations dont need to worry about space for storing large stocks of goods. Some of the benefits of Just in Time are Reduced set up times in the warehouse is observed as employees dont have to stock large stocks. Small quantity of stocks will take less time and efforts from the employees As only required quantity is ordered, Coles dont find much out of date products in their store room. It saves wastages of goods and money. Flow of goods from warehouse to shelves becomes a faster and smoother process. It saves much of the warehouse space and efforts of moving goods from store to shelves. Many of the products received in the logistics go directly on the shelves (Sadler 2007).

SOLP Implementation
Strategic Operations and Logistics Planning (SOLP) is a process for deriving Strategic plan for an integrated supply chain for a group of products. Organisations today work with their suppliers and Customers in order to organize different aspects of supply chain. But they dont determine a strategy for the entire supply chain. SOLP helps organisations to bring all their supply chain partners together by strategic planning. Such

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Plan can be implemented by a team of executives and business managers by creating a set of business worksheets. Different parties in SOLP process are informed regarding firms strategic business objective and customer requirements on the basis of operations and logistic functions. They create an Action plan with the required actions with the time by which such actions are required. The action plans states clear actions required to achieve the desired goal, which when adhered by business partners in order to achieve the overall strategies for different product groups in the organisation (Sadler 2007). Coles Express can get benefits in terms business efficiency and

productivity by using SOLP process. They can plan deployment of a Planning Team which will include operations, logistics and purchasing management. They can develop strategic action plan to solve any issues. Good communication with suppliers and marketing personnel can help understanding actual customer needs that can help Coles Express concentrate on specific area of high value. By getting to know what customer needs actually are, Coles Express can implement action plans aimed at the desired results. They can introduce a time frame for this implementation and regular monitoring of the time frame and performance will help them achieve the desired results.

Integration between Links in the Supply Chain

A proper integration amongst all the links of supply chain is important to benefit everyone involved in the Supply chain. Cooperation between firms belonging to the supply chain is a powerful source that can provide a competitive advantage to the current state of business. Cooperation amongst business partners leads to reduced cost and increase in overall profit of the organization (Sadler 2007). 16

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Coles Express is Unlikely to achieve supply chain integration without developing close relationship with partners up and down the supply chain. The following three suggestions can be given to Coles Express to establish a mutually rewarding partnership at every level of their supply chain. First of all they need to achieve support and cooperation from all the partners in the supply chain. Proper synchronization between all the partners and uniform culture across the entire supply chain will help Coles Express build strong relationship with suppliers. Next step is identifying the right partners in supply chain. Coles Express needs to match the Values that are followed by different partners to that of their own. It is important to set up achievable targets a means to achieve them. And proper integration between business processes and technology needs to be achieved so that they can have common understanding and definitions for goods flowing in their supply chain. Third step that should be taken by Coles Express is to maintain the partnership among the links in supply chain. Regular communication and feedback between various partners can help Coles address any problems or misunderstanding at any level. Also the Key partners should be recognised for their contribution to the supply chain. By achieving good integration between Supply Chain and optimally utilizing the current information system Coles Express can achieve good results on inventory level and improved inventory turnover.

Weak links in the Supply Chain

By speaking with Operational Managers at some branches and other officers related to Coles Express Supply chain, some weak links were identified; such areas were affecting the entire Supply Chain negatively. These are

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those weak links which affects the efficiency of entire supply chain. Some of the weak links that identified are 9.1 Numerous Suppliers Coles Express procures their goods and services from a range of suppliers. Such supplier ranges from high profile manufactures to small traders. They dont follow a fix pattern for data processing, making the job difficult for Coles Express employees as they cannot follow the same ordering process for all their requirements. Some orders are placed electronically using computer while some orders are to be faxed to suppliers, making the task difficult for employees. It affects the overall efficiency of their supply chain. 9.2 Poor Forecasting Currently sales forecasting at Coles Express is done on the base of past Experiences. With rapid changes in trends and customer demand forecasting based on past experiences cannot provide accurate details. Hence orders placed are not always accurate leading to more or less than optimum level of stock. And on periodical basis Coles Express has some specials, where the quantity ordered for items on specials is 3 to 4 times than the normal ordering quantity, but such forecast are not always accurate leading to unused stock piled up in the store room even after the specials are over. This unused stock blocks business capital and affect their cash flow. 9.3 Information System Limitations Modern information communication tools have their own limitations. Often in time gap between placing the order and receiving orders they can run out of certain products. Such product unavailability even for one day can loose customer trust and affect their business. Even after most of the suppliers of Coles Express use electronic means for communications, there are still some suppliers who do not have such electronic forms of information communication. Exchange of information from such suppliers is often

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through phone or faxes. Manual errors are quite possible in data transmission leading to wrong decisions based on such improper data. 9.4 Poor Inventory Management Proper Inventory Management is aimed at making sure that optimum level of stock is stored in the warehouse. Inventory Management is the concept which makes sure you have enough stock so that you dont run out on customer, but making sure that the stock level is not more than enough which will block business capital in form of unused piles of stock. Due to several factors affecting the sales, forecast made while ordering stock can turn out to be wrong leading to improper Inventory level, keeping too low inventory levels can lead to stores running out and large quantity will only block capital. In such cases a strong need of better Inventory Management system is felt.

9.5 Poor Product Selection When observed closely it was found that more or less every store has almost similar type of stock. But all Coles Express Stores are located in a different area and not all different outlets has the same profile of clientele, hence selling the same range of products in each store does not serve the customer needs optimally. More or less every store will have to follow the same product range that the head office decides they should display for sale. The Coles Express Outlet do not have enough freedom to go beyond a

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certain level in choosing what they want to sell in their store leading to poor product selection which in turn affect the sales of other grocery items in the store.

Required Actions
Some of the areas in current structure need modification in order to improve the efficiency of the entire supply chain network. Operational Managers at some of the branches of Coles Express believes that following steps can be taken in order to make their Supply Chain more efficient. 10.1 Improving the Forecasting The forecasting done at Coles Express needs improvement. Customer behavior can be studied by the Fly Buy data that Coles have and Forecast can be made more realistic based on customer feedback. Proper study of customer buying behaviors shall be conducted so that proper forecast can be made and orders for supplies are more realistic, so that only optimum level of stock is order. This will improve the functionality of entire supply chain by making the cash flow smoother and it saves unnecessary blockage of Business Capital.

10.2 Information System Coles still deal with some suppliers who do not use good information technology system, which can make their jobs easy and more accurate. Hence it needs to review their suppliers list including more suppliers who can afford high end technology, making it possible to exploit the benefits of modern technology in their supply chain. Also the current tools of information communication can be replaced by more sophisticated ebusiness tools which can boost the efficiency of the current supply chain model. Integrated systems better deals with transferring the data as

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compared to single standalone system. All this points must be kept in mind and information technology tools implemented so as to improve the efficiency and effectiveness of the current supply chain. 10.3 Inventory Control Integrated flow of information amongst the supplier group can provide better management over the current inventory within the supply chain. Proper collection of data regarding inentory at every hierarchy of the supply chain can lead to proper inventory control and also reduce unncessary inventory lying in the warehouse. Unneccessary inventory can be reduced which will improve the cash flow at Coles Express and will lead to better functioning of the current supply chain. 10.4 Relationship with Supplier Coles Express needs to build better relationship with its suppliers, as effective communication with the suppliers is very important. At Coles Express more emphasize is placed on having strong supplier relationship so that they can have better bargain in their purchases. The management needs to understand that the suppliers should be treated like partners as they play a very important role in business. Hence healthy relationship with suppliers will lead to improvement in the Supply Chain at Coles Express. 10.5 Better Product selection Most of the grocery items sold at Coles Express store lack variety, quality and are much more expensive than the supermarkets. The profit margin earned on fuel sold at Coles Express is quite low, whereas all the grocery items sold at this stores enjoy a reasonably high rate of profit on cost price. Hence more focus shall be placed in providing a wide range of products to customer, keeping in mind customer choice and requirement. Store Managers better know the profile of clients in that particular area so they shall be given the authority to totally select the products to be displayed for sale in their stores. The product range shall be more focused on

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producting wide range of quality goods at a reasonable price. As they can trade on the volumes of sales even by selling the goods at a little lower price and earning less per unit profit. Thus selection of a better Product range is very important.

Conclusion
The study of Coles Express Supply Chain structure brings forward a good example of well managed supply chain, which was expected from a member of the Coles group. Yet certain areas are observed where improvements can be achieved. Looking at the current situation, it can be advised to Coles Express, that in order to boost the smooth functioning of the supply chain they will have to focus on some critical factors like proper forecasting, inventory control and good supplier relationship. They will need to understand that the competition today is between the supply chains and not between vendors or retailers. The areas that Coles Express should sincerely try to improve are their product pricing and forecasting. In a nutshell, it can be said that Coles Express has a decent supply chain and with the

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implementation of better and more reliable information systems and integration of management they can be successful in continuing to live up to their business strategy and goals.

Action Plan
Policy Area No of Stores Information Communication tools Human Resources Quality and Prices Performance measures Current Around 600 Limited use of EDI, RFID and Just in Time More Casual Staff Needs improvement in standard of quality Financial Turnovers Proposed Open new Stores Complete Transformation Have more Permanent staff More Emphasis on Quality products but at cheaper rates Combined evaluation of over-all profitability. Action Required Year 2008 Update Information Tools Cut on casual staffing Cut down on profit margins to give cheaper quality product Test Customers Satisfaction Levels Priority 7 3 8 1

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Supply Chain and Logistics Management Contracting a selected number of suppliers for all the requirements More emphasis on direct sourcing from suppliers More Emphasis on Customer Requirements Cut down on scattered suppliers Direct Sourcing Study Customer requirements 4

Distribution Product Introduction

Coles Express DC and Private suppliers Supplier Based

5 6

References
Cassivi, L 2006, Collaboration planning in supply chain, Supply chain management: An International journal, Vol. 11, No. 3, pp. 246-258. Clarke, R 1998, Electronic Data Interchange: An Introduction, The Australian National University, Australia, viewed 18 May 2007, <http://www.anu.edu.au/people/Roger.Clarke/EC/EDIIntro.html> Clarkston Group 2000, Supply Chain Management Primer, viewed 13 May 2007, http://supplychain.ittoolbox.com/pub/JB051101a.pdf Coles Myer Ltd 2006, Coles Myer Annual Report 2006, viewed 15 May 2007, <http://www.colesgroup.com.au/library/Investors/FinancialReports/2006/20 061023_2006_Annual_Report.pdf >

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Coles Myer Ltd 2006, Coles Myer Limited use of EDI, Australia, last viewed 18 May 2007 <http://et.colesmyer.com.au/etweb/edi.htm> Howell, H 1999, What is Lean Construction, University of California, CA, USA, viewed 20 May 2007 <http://www.leanconstruction.org/pdf/Howell.pdf> Lee, H. and Billington, C. 1992, Managing supply chain inventories: pitfalls and opportunities, Sloan Management Review, pp. 65-73. Mago, N 2007, Operational Manager, Coles Express Mentone, Interviewed on 6, 10 and 14 May 2007. Mia, L. & Winata, L. 2004, Linking Just in Time Manufacturing, Information Technology for Communication and MAS Information, Griffith University, Australia, viewed 20 May 2007, <http://s-cahvishnu.infotech.monash.edu.au/dss2004/proceedings/pdf/80_Winata_Mia.pd f> Sadler, I. 2007, Supply Chain Integration, Victoria University, Melbourne Sahay, B 2000, Supply Chain Management for Twenty First Century, Macmillan India Ltd, Bangalore. Sun Microsystems 2004, Sun Microsystems and Coles Myer lead industry with RFID, Australia, viewed 19 May 2007 <http://au.sun.com/20040628/coles/index.html > Tsaktserlis, C 2007, Operational Manager, Coles Express Glenvern, Interviewed 10 and 12 May 2007.

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