Introduction to Supply Chain Management
Dsicuss about the Relevance Strategic Management Theory And Research.
In this modern world competition is now no longer between companies but now it is between supply chains of the company. The supply chain is a network of suppliers and company to produce and distribute their product and supply chain gives steps for the distribution of the product. This is the process which converts natural raw materials into a fine product and delivers it to customers. The supply chain needs a proper management system known as supply chain management which helps in faster production and lower cost. Supply change management is basically a planning of all the activities involved in procurement and sourcing, it includes coordination with partners like suppliers, the third part, customers, and intermediaries. Also, it looks after demand and supply across the company. The main typical supply chain begins with biological, ecological and political regulations of natural resources. Many exchanges in supply chains are between a different company who works for increasing revenue with their interest and includes many production links.
Under this assignment I would take Sanitarium a company founded in Melbourne, Victoria in1898, the company is generally a food industry which produces a diverse range of the vegetarian products and the food cereals from Sanitarium. The main product of the company is the Weet-Bix and is considered as the top seller of the breakfast cereals in the New Zealand and Australian markets. Sanitarium Weet-Bix is manufactured in Australia.
Sanitarium products are exported globally among this the ordered manufacturing of major technologies in frequent countries that includes Canada, United Kingdom, Thailand, South Africa and India. The supply chain process of the Weet-bix is to demand planning, oversee the consumer service, planning of the finished goods and raw material and the logistics process Sanitarium has put into practice the i2 supply chain management to achieve the major objectives of the business through the multi-phased supply chain re-engineering project ("Sanitarium Health & Wellbeing Australia", 2018). The implementation of such supply chain management system is to increase the efficiency of the supply chain among this improves the consumer service and also reduces the inventory. The supply chain process of the Weet-bix is to demand planning, oversee the consumer service, planning of the finished goods and raw material and the logistics process ("Sanitarium Health & Wellbeing Australia", 2018). Sanitarium has put into practice the i2 supply chain management to achieve the major objectives of the business through the multi-phased supply chain re-engineering project. The implementation of such supply chain management system is to increase the efficiency of the supply chain among this improves the consumer service and also reduces the inventory. The supply chain also includes how the company deals with their vendors and suppliers also how the sourcing of ingredients is done with a full manufacturing process (Flynn, Huang & Zhao, 2014).
- Food security by making plant-based food available on affordable price
- Ethical sourcing by making agreements with all major suppliers
- Applying sustainable farming for all raw materials
Sanitarium negotiates on respectful and fair terms with their suppliers and vendors who response fairly in all business terms. Also, sanitarium favors all sustainable food packages which are helpful environmentally and economically and promote them. They use non-genetically modified soy which is under observation and tracked all through growing and production process. The process of manufacturing goes like raw materials are brought to manufacturing unit and once it is approved by science department and corporate food department then suppliers are authorized to supply in the market (Flynn, Huang & Zhao, 2014).
There are some aspects of supply which can be optimized are strategy of manufacturing, merger strategy by introducing new supply chain on an existing, using cost to serve optimization, production capacity planning, ensuring products freshness, routing of customers deliveries and shipments, changes in production plans in response to changes, sustaining risk and also creating a modern supply chain strategy of sanitarium and setting a standard for other food manufacturing food companies (Flynn, Koufteros & Lu, 2016).
There are some environmental impacts affecting `these optimizations are-
- Energy use during storage and transportation
- Direct use of energy during manufacturing in farm or cooking at a household level
- Greenhouse gas affecting it during the production of packaging.
- Toxic effects of chemical agents
- Excess use of water in farming of raw materials
- Food and packaging wastage at each level of supply chain
Therefore, the company has to use more energy-efficient equipment to replace these environmental impacts.
Suggesting a structure for sanitarium would be something unique as according to companies working and flow of weet-bix it just requires a good and sufficient flow of their products with a sustainable process.
Manufacturer is directly linked with suppliers and distributors of company, they have to satisfy both. Suppliers provide material for further manufacturing process and therefore, company makes it available to their distributors.
After implementing i2 solutions sanitarium has gained visibility all over the business with increased accuracy and increase in customer service. Before there was no idea of the impact of promotions but now we have demand planner which already highlights the problems. Before new supply chain managers used to take weeks to develop production plan but now i2 solutions have made this easy (Saldanha et.al, 2014). Also, after implementation sanitarium tackles its inventory plans quickly and also it is not costly anymore. With i2 sanitarium is not dependable now, manages its promotions and also maintain level with its competitors.
Sanitarium in production uses its well-established plant in Australia. According to the supply chain, the main need for manufacturing of weet-bix is harvested wheat and raw material which is done by human activities which further goes the procedure of production, distribution, and consumption (HITT, 2011). The investment done by sanitarium is by their profit attained and their stalk-holders. Sanitarium is that the part of the Seventh-day Adventist church that believes in promoting and manufacturing plant-based food on a belief that food God gives food to humans. They invest resources into community education by lifestyle medicine services. Sanitarium is fully owned and operated in Australia and it benefits Australian economy. As sanitarium is fully operated as a charity, therefore, it is exempted from income taxes but other Australian taxes are applicable (Rauer & Kaufmann, 2014). All the profits of the company are transferred to Seventh-day Adventist church which uses it for charitable purposes like educational purpose and medical safety. It profits economy by direct employment to 1000 workers and purchasing Australian wheat and other raw materials. Also, it works with other Australian industries. Sanitarium collaborates with many Foodbank to serve thousands of weet-bix to charity (Rauer & Kaufmann, 2014).
Weet-Bix Supply Chain Process
Stock control is a process which manages and monitors stocks either at selling time or at manufacturing time or at storage at given time. This is also known as inventory control. This is used to show stock which is available at any time. Efficient stock control helps to maintain the right amount of stock at the right place and the right time and also protects production if any problem comes because of the supply chain (Bouzayani, 2013). Basically, stocks are ordered at a certain level when we have minimum stock according to requirement.
I would suggest Just-in-time (JIT) method for sanitarium as it aims to reduce cost and cutting stock to a minimum. In this stocks are delivered when they are needed immediately. This is good for our company as they manufacture food materials which gets expire after certain period of time, therefore, keeping too much stock is not good for a sanitarium (Bouzayani, 2013). Also, they can use economic order quantity (EOQ) which helps in maintaining a balance between having too much and little stock (Bouzayani, 2013).
Procurement is when plans of the company are turned into actions with the best way and applying new strategies but with this comes some challenges those are
- Rapid change in food trend
- Local products demanding
- The pressure of being environmentally friendly
- Management of suppliers
- Maintaining minimum order and giving bulk discounts
- Meeting organic food demands
- Avoiding overstocking
- Seasoning of food materials
These procurement challenges need some method and policies to overcome with use by examining procurement practices like spend analysis which protects profit margin, strategic sourcing defines requirement of sources and packing material etc (Singh, 2017). Also, contract management which controls safety regulations, policies and risk management, supplier management manages new suppliers and their requirements, financial saving management enable us from business objectives and cost-saving methods and procedure to pay is next generation software which uses GPS technology that gives accurate buying decisions (Singh, 2017).
Supplier relationship has changed rapidly and has become more complex than before each party aims at maximizing the profits and in minimizing the cost. It is essential to have mutual commitments over the goal to achieve supply chain, this mutually benefited policy is accepted widely now (Singh, 2017). There are different types of supplier relationship which involves high and low involvement. They are broadly classified into four categories
- Short term arm length relationship
- Long-term arm length relationship
- Short-term intense relationship
- Long-term intense relationship
High involvement relationship leads to efficiency improvement and is beneficial over time and for high involvement and high continuity relationship trusting mutually is mandatory with the subject of collaboration and maintaining a relationship (HITT, 2011). Also, the most important factor is communications and good partnership among firms.
- Supervision of suppliers
- Understanding suppliers operation and management
- Turning competition into an opportunity
- Continuation of learning and improvement
- Sharing information correctly
- Developing technical capabilities
Weet-bix has globally become one of the famous breakfast manufacturing Company among kids. Weet-bix has come up with three main objectives of being affordable and healthy. Sanitarium has become one of the most trusted brands in Australia. Since 1898 sanitarium is making healthy nutritious food and promotes plant-based food. This company has changed people healthy thinking for their everyday body need.
Bouzayani, W. (2013). Real Time Supply Chain Management Co-Modeling of Total Supply Chain Solutions. Science Journal Of Business And Management, 1(1), 8.
Flynn, B., Huang, X., & Zhao, X. (2014). Supply Chain Management in Emerging Markets: Critical Research Issues. Journal Of Supply Chain Management, 51(1), 3-4.
Flynn, B., Koufteros, X., & Lu, G. (2016). On Theory in Supply Chain Uncertainty and its Implications for Supply Chain Integration. Journal Of Supply Chain Management, 52(3), 3-27.
Hitt, M. (2011). Relevance Of Strategic Management Theory And Research For Supply Chain Management. Journal Of Supply Chain Management, 47(1), 9-13.
Rauer, J., & Kaufmann, L. (2014). Mitigating External Barriers to Implementing Green Supply Chain Management: A Grounded Theory Investigation of Green-Tech Companies' Rare Earth Metals Supply Chains. Journal Of Supply Chain Management, 51(2), 65-88.
Saldanha, J., Mello, J., Knemeyer, A., & Vijayaraghavan, T. (2014). Implementing Supply Chain Technologies in Emerging Markets: An Institutional Theory Perspective. Journal Of Supply Chain Management, 51(1), 5-26.
Sanitarium Health & Wellbeing Australia. (2018). Retrieved from https://www.sanitarium.com.au/
Singh, M. (2017). Optimization of Food Commodity Supply Chain in Logistics Service Provider Business by Implementing Lean Management. SSRN Electronic Journal, 40(5)2-12.
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