AMCOR- A Global Leader in Packaging Services. Amcor is Australian-based packaging association. Company mainly produce, flexible and stiff plastic packing services. Organization give their packaging services, in various sectors like food, refreshments, liquors, tobacco, etc. Amcor Headquarter office located at Zurich, Switzerland. Further, the head office of the organization is in Melbourne, Victoria, Australia. Organization also conclude various global stock marketplace indices DOW jones maintainability Asia pacific Index, Carbon Disclosure authority Index and the FTSE4GOOD Index. Present CEO of the company is Ron Delia.
On May, 1986 Australian Paper Manufacturer’s has turned into Amcor Limited. After words, Amcor has become a well- known packaging services throughout the world. And company is known as world largest packing services organization.
Packaging services of the company:
Amcor has two mainly packaging services:
- Packaging from Rigid plastic: This is the variety of plastic, and rigid plastic is used for packaging in food, liquors, packaging of medicines, and home & personal care products. Amcor is “The world largest producers of PET bottles (Waters, and Rinsler, 2014).
- Flexibles packaging: Flexible plastic is used in packaging for the medicines, hospital supplies, boxes of food, and drink. Amcor is also manufactures, the paper of Tabaco items, and caps & cover for the products.
Nowadays, Company is known as worldwide leader of packaging services in packaging industries. For enhancement in the product quality, Amcor is using some new technologies and innovation and making the company products cost effective for their supplier and clients and eco-friendly for the environment.
Real World Situations:
Controversies: Although Amcor has an effective supply chain management system, even though company has faced many controversies in past years. In 2001, organization was fined by EPA Victoria, A$10,000 for the pollution (Van, 2006).
Engaging in Cartel Practices:
CEO of the company, Russell Jones has been given the resignation, on the appeal of board members of the company. The Media report revealed after the investigation of Australian Competition and Consumer Commission (ACCC) that, company has been found engaging with Cartel Practices, in December 2004 (Tang, and Musa, 2011).
Cartel Practices are the serious break of the corporate law of Australia. Further, after the resignation of company CEO, investigation report came in front of everyone that company has been sued five former managers, in an attempt to protect them for providing and documents to the related regulator (ACCC report).
On 2 October 2006, a biopic film in the TV show Four Corners titled The A Team was communicated, covering controversial techniques utilized by Amcor to influence ranger service strategies (Stadtler, 2015).
The another controversy Of Amcor organization was, In 2008 Amcor was condemned by Heidelberg magistrates ‘court for freeing oil into the Yarra Rive from the company plant and fined $80,000 (Norrman, and Jansson, 2014).
To overcome all the disadvantages and controversies Amcor should use an effective supply chain management. Supply chain management can be effective more if the organization work accordingly the seven principles of supply chain techniques. The principles will help to enhance the growth and quality of company products and will help to overcome form all controversies which are organization is facing.
Principles and Accuracy of Supply Chain Management:
There are basic 7 principles, of supply chain management system, Amcor can use:
- Adapt supply chain based on service needs of each customer segment.
- Customize Logistic Network
- Align Demand Planning Across Supply Chain
- Differentiate Products Close to Customer
- Outsource Strategically (Monczka, et al., 2015)
- Develop IT that Support Multilevel Decision Making
- Adopt Both Service and Financial Metrics
- Integrate Business Processes
- Create a Supply Chain Information Infrastructure
- Know the Customer
Seven principles of Supply Chain Management in Amcor
Accept supply, chain based on service requirement of every client segment:
Both organization employee and supply chain experts are qualified to focus on the client’s requirements. In order to recognize the clients better, clients are separated into various segment, which is known as “segmentation”. The very easy to divide the customers in segments is ABC analysis, these group of customers are based on the revenue or profitability. Apart from these, division also can be done by dividing the products, industry and trade network. It is being suggested that customers should be divided according to the service requirements: Sales Importing requirements and Order Fulfillment requirements (Lee, 2008).
In the case of Amcor organization, company should also focus on the clients need, but only these strategy is not enough to overcome the all disadvantages. The purpose behind that, customers might not know their needs, until and unless the rivals offer something changed. For e.g. in 2011, the shopping website amazon introduced an app called, Amazon Prime in which Amazon offers to their customer, free two day delivery and discounted one day delivery. In result, now a day people are still does not able to understand the profitability of this Amazon Prime offer.
2. Customize Logistic Network:
When a customer is being segmented, based on the service requirements, Amcor might have to adjust, the another logistic system to provide different section (Hill, and Fredendail, 2016). However, this segmentation principle does not success in all situation. Because Amcor is a global packaging services, it provides their packaging service in different countries, let’s take an example of China, there will be different logistics system for different clients. Every customers in the Australia may have already controlled the resource of raw ingredients, and might ask company to supply devoted manufacture lines. So, logistic network determined mainly by the clients.
3. Align Mandate Planning Through Supply Chain:
In Amcor, the supply chain expertise are trained to tell the demand sharing data with trading companions of the company, so that nobody able to keep the extra and unnecessary stock (Lu, et al., 2015). In reality only the Amcor is the only logistic company which is actively showing and sharing their demand data with company trading partners. For example: there are many interesting proposal paper, According to Williams and Waller “-Down Versus Bottom-Up Demand Forecast: The Value of Shared Point-of-sale Data in the Retail Supply Chain”.
If company make the request forecast which is centered on SKU, using the company past order data is more correct than by using, the POS data company get from the traders (Khan, 2015).
These method of implication applied only when, neither the demand sharing is present nor needed badly. But if the company, got demand sharing data from its partners, company must use it in legal way.
4. Differentiate Products Close to Customer:
“Standardization” is the reverse polarization of “Differentiation”. This the principle that Amcor can consider in their supply chain management policy (Jüttner, et al., 2013). For e.g. in the manufacturing of home and personal care products (cosmetic products), company can formulate goods, and choose a wrapping and labeling which meet the necessities, with the guideline of multiple countries. One Stock keeping unit (SKU) can be used in 15 countries rather than 1 SKU per country. Amcor can drive the cost down significantly, by using the principle of Standardization. So, the principle of Standardization is very essential factor for every company, for maximize the profit.
5. Outsource Strategically
This is a principle, which takes stand at the hard time of the company, the logic after this principle is never outsource the core competency of company.
6. Improve IT sector, that Support Multilevel Decision Making:
To prevent from many cyber-attack, Amcor should use the effective ERP model for their IT management system. An IT plan should not be done in the separation, business procedure reengineering (Jacobs, and Chase, 2013). These are the things which should be done, before applying an IT project. These strategy will help into determine, that what kind of technology company really required.
7. Accept Both Services and Economic Methods:
According to the researcher, it is being suggested that, to control the client’s and customer’s effectiveness, company should apply the Active Based Costing (ABC) policy on their finance decisions. However, there are many interesting concepts of the Activity Based Costing model.
Activity Based Costing was defined by the Robert Kalpan and W Bruns in 1987 in the book “Accounting and Management: A field study perspective”. But in practically it is hard to keep maintain an ABC model to replicate the variations in actions, procedures, goods and clients in an organization. After that Author introduced the sorted concept which is called “Time Drive Activity Based Costing”.
8. Know the Customer:
Amcor is known as- A global leader in packaging service. Know the customer is essential factor for every company (Harsoor, and Patil, 2015). Without understanding the requirements of customer, supply chain cannot be made effectively. One must concept, an information arrangement to capture client’s transaction data, collect the data, and investigate the data of customer from an operational viewpoint. This objective is to capture a clear report of the client’s requirements. A supply chain can vary according to the demand, requirements and location of the customer.
9. Create a Supply Chain information infrastructure:
To achieve competitive advantages, an active information infrastructure is necessary, which includes both intra and inter- organization. Now a days with the help of internet B2B collaboration more easier for supply chain traders to share timely demand data, products stock position, daily capacity usage necessities, developing marketing strategies and plans, products and procedure designing changes, and logistics necessities.
Integrated Information System and Business Processes
However for good collaboration a true planning of inventory and production strategies is needed. Only sharing the data among the partners of the company does not justify the exact economic potential of relationship (Giunipero, and Aly Eltantawy, 2014).
10. Integrated Business Processes:
Business process of the Amcor must be recognized both intra- and inter- logistically to support the supply chain system.in given above figure these whole procedures, attached with the infrastructure, which support the well-organized flow of material via the supply chain management. It is essential to build inter-organizationally process to influence and increase the company partner’s capability. These process of inter and intra-organizational procedures must be planned as such, to take benefit of the enhanced information that motivate daily supply chain decision.
Supply Chain Management Structure:
Supply Chain Management structure of any company includes basics 6 points which is given below.
- Integration and information sharing (Christopher, 2016)
- Product Development:
- Procurement and Manufacturing:
- Root Organization: the organizations have the hierarchy followed from the very past years in developing the organizations. The site administrators perform the role of root of the structure.
- Default organization: no item placed in the default organization (Chase, 2017).
- Supply Chain Management organization: Amcor organization has the following child organization units:
- Supplier Hub organization: This child organization is developed by the suppliers. Administrators keep the supplier’s hub utilities as well as supplier’s hub organization.
- Asset Store Organization: Asset Store is formed to own all assets, that are used to make stores for retailers.
- Supplier Organization: To own all of the retailers in supply chain, supplier chain organization is formed (Brandenburg, et al., 2014).
- Supplier organization A, B, C:A, B, C are the child organization of the supplier organization. Supplier organization is the parent organization, for each supply store there are parent and child supplier organization always present in the structure.
- Buyer Organization:All customers are owned by the equivalent buyer organization.
Supply chain management interest:
Supply chain management play a very important role in an organization activities and also an essential factor to operation effectiveness which can be implemented to client’s satisfaction and organization success. Supply chain management is the back bone of a successful organization, which mange all the serious situations of the organization such as fast growth of multinational companies, Global expansion and ecological concern directly affect the corporate strategy. Some important benefits of supply chain management are given below:
- Reduces product stock price.
- Provide a good connection for sharing the data information between the company partners.
- Improve the customer services and the satisfaction level (Ballou, 2007).
- Maintain a good relationship and trust between the company partners.
- Provide a good manufacturing method.
- Increase the process combination.
- Recovers the bottom line, by reducing the fix resources in supply chain.
- Enhance the cost flow.
- Enhancement in the product quality and provide the higher revenue margin to the company.
- Supply chain system offers many tools and techniques, which helps the business to analyze the glitches and also give the answers to these interruption around the atmosphere of business. It also play a vital role in transferring the products faster to their endpoint. To win the business competition, supply chain system perform a very vibrant role in the organization. With help of the effective SCM, Amcor Company can beat its rivals in the packaging industry. Todays, Supply chain management becomes more critical business discipline around the global.
- Clarity and completeness:
In today’s era there are many on-demand consumers, giving information about the goods, so it can be easily available. This feedback give the positive point to the retailers and seller for the growth in market (Amcor, 2017). The companies which maintain the transparency among the customers: they are able to make the lifetime relationship with their customers.
The companies which are capable to give, the product information in a way, customer wants, they have opportunity to win the customer lifetime loyalty.
Conclusion of this report, there are various principles of supply chain management which are capable to recollect their relevance over time. It is important to accept that, an effective supply chain management helps in the growth of revenues of the company (Waters, and Rinsler, 2014). There are many strategy which are authoritative to the success of SCM involving differentiation, economic, technological based, interactions based and worldwide strategies. Differentiation strategy of supply chain, is needed to create a particular organization and its supply chain as being exclusive and different.
Here, it is recommended that Amcor should use an effective supply chain management with advanced techniques for demand sharing among the partners of the company. Amcor should use the CPFR (Collaborative Planning, Forecasting and replenishment) model to design an effective supply chain managements for the business growth. A good company can enhance their growth by using the supply chain principles. And also the supply chain key flows: And the Information flow is one of them that, can be enhanced by applying the CPFR model.
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