In order to buy operations that promote the distribution of products, Coles and Woolworth Company have implemented purchase order management system to allow tracking of purchases via receipt distribution center. Being some of the biggest grocery store chains in Australia, the Australian grocery market is mainly dominated by Coles and Woolworths thus customers do not have alternatives when it comes to purchasing of fruits and vegetables. As part of the organizational cultural renovation, data sharing network, has been developed with over 50 major suppliers in Australia and across the national boundaries. The engagement in such a supply has been implemented through optimized supply chain structure to facilitate the distribution of stock and to pave the way for an appropriate inventory management system (Gattorna, 2008).

Comparison of Coles and Woolworths Inventory management

Credible sources have pointed out at Coles taking advantage of the rival Woolworths by incorporation advanced inventory management network leading to sales growth in more than 15 conservative quarters. In collaboration with other likeminded enterprises, however, both Cole and Woolworths has an improved data management as part of their supply chain optimization effort thus facilitating information sharing across the supply chain. On the other hand, Woolworths has implemented the use of low-cost strategy and reliability along the supply chain network thus able to influence investors through effusive flank dividends (Wahlqvist, 2002).

Flow chart of Woolworth’s inventory system

The arrows indicate the flow of information

According to Wahlqvist (2002), Woolworths instituted a program termed as Project Refresh that was meant for transport management through an integrated information system. The system facilitated the distribution of stock at different centers where they could be easily accessed by customers. On the other hand, Coles emphasized on Data-Driven Internal Culture as part of the organizational significant improvement on inventory management system. However, much focus was relayed on how to improve customers’ loyalty. Woolworth’s attention on inventory management has been critically designed with an objective to fit retailers. The design had enabled the organization advancement in annual gross returns by almost 10% annually until recently when it went down by 1%. Contrary to Woolworth’s inventory system, Fletcher clarifies how Cole’s inventory channeled much of the effort at dispensable liquids and less perishable products. The concept was mainly adopted so that products can be easily accessed by small scale retailers (Wahlqvist, 2002).

Merits and Demerits of the Two Inventory Management Systems

Advantages

Both Cole and Woolworths are engaged as a transport provider using different career that are destined to different entry points. Through an Intrinsic Inventory Management System, the two companies have created recommendable relationship with suppliers and other organizations. For instance, it enabled the Cole to facilitate the management of inbound freight thus enhancing the management of the entire supply chain of the company to other distribution centers. Besides, it ensured better planning and management of Woolworth’s consistency of inbounds services throughout Australia (Cole and Drake, 2000). Moreover, both Cole and Woolworth’s systems have led to an ineffective utilization of labor capacity and time slots. Coles ensures responsible arrangement and collection of goods from customers. Therefore, it enhances better planning and utilization a capacity where the supplier remains responsible for documentation while the company is left with the duty to package and enter data concerning the product. The Inventory Systems also enhanced close relationships with suppliers and other service providers thus improving supply chain performance (Cole and Drake, 2000).

To Woolworths, it reduces the cost of business operation through the utilization of the internet and online data mechanism thus leading to a continuous increase in earnings. More significantly, it improves the interest and the tax that has been able to outperform (Xu, 2014). Besides, the inventory management has succeeded in driving up the cost approach of Woolworth Company thus improving the capability to execute apparent inventory strategy without interfering with the other business operations. With the utilization of petrol as a key element in transportation of fruits and vegetables to retailers in the Australian republic, Woolworth’s Inventory Management System enhances the organizational performance. The concept is moderated through the reduction in the cost of petrol for a competitive advantage.

Disadvantages

To Coles Company, advanced inventory management interferes with the optimization of green gas emission while seeking to engage cost import into a more virtual system. To Coles Company, the introduction of such inventory has led to the introduction of extra overhead costs mainly for accurate recording and maintenance of data reported by the system in the network. Such an inventory system has also led to increased chances for fraud to Coles Company where dishonest vendors hack the system and receive payments of supplies that were never delivered. Moreover, it led to high strategic planning time to the two companies such that they had to spend much time to plan and meet the company’s inventory levels. For instance, it has subjected the management of Coles Company to figure out the communication mechanism to customers and how to improve the order levels for sustainable company management (Burch and Lawrence, 2007).

Similarities and differences between Coles and Woolworths management

Similarities   Differences

Both exercises high standards of hygiene   Coles Reduces cost based on transport

The all allow affordable pricing   Woolworths majors on internet op reduce cost

Both are engaged in fresh fruits and vegetables     Cole practices green gas emission strategy

They both value customers     Woolworths Dark Box strategy

However, to Woolworths Company, it has led to the development of “Dark Box”. Dark Box is a situation where retail customers, who have logged into the system for the purpose of warehouse distribution, ends up with a lot of frustration of not getting exactly the goods they intended to receive. In addition, it has contributed to the management and operation of Woolworth’s fleet of trucks that are also forced to operate around the clock that is only possible in a major industrial zone or in towns with arterial network. Besides, the shift in Woolworth’s business model interferes with the logistics and traditional business retailing customers’ service thus affects industrial zoning (Burch and Lawrence, 2007).

Limitations to Coles and Woolworths Inventory Management

The first limitations for the two companies are the massive competition from other companies in Australia leading to abuse and control of the grocery market. Besides, there are high chances of blackmailing for other suppliers who alleged to have been bullied by any of the two companies. Moreover, fruit products in Australia are based on seasonal supply thus causing fluctuation in demand for both suppliers and customers in Australian market clarifies (AIHW, 2012).

Conclusion

In Australia, the expansion of retail business especially in sale of fruits and vegetables has led to a diversification of an inventory management system to satisfy the market demands. As such, both Cole and Woolworths Company have developed an inventory management system to tracking purchases via a receipt distribution center. The paper has illustrated how Cole has taken up a competitive advantage of the inventory system over Woolworths through data management and supply chain optimization. Besides, the paper has clarified on some of the merits and demerits of Coles and Woolworths’ inventory management system over other systems while also seeking on some of the limitations that have deterred the two systems from achieving full organizational objectives.

Reference list:

Gattorna, L. (2008). Strategic supply chain alignment. Aldershot, Hampshire, England: Gower.

Wahlqvist, L. (2002). Food and nutrition: Australasia, Asia and the Pacific. Crows Nest, NSW:     Allen & Unwin.

Cole, A., and Drake, H. (2000). The Europeanization of the French polity: continuity, change     and adaptation. Journal of European Public Policy, 7(1), 26-43.

Xu, J. (2014). B2B Digital Enterprise and Supply Chain. In Managing Digital Enterprise (pp.     119-129). Atlantis Press.

Burch, D., and Lawrence, G. (2007). Supermarkets and agri-food supply chains:     Transformationsin the production and consumption of foods. Cheltenham, UK: Edward     Elgar.

Australian Institute of Health and Welfare. (2012). Australia’s food & nutrition 2012. Canberra:     Australian Institute of Health and Welfare.

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