Supply Chain Strategies for Emerging Country

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Supply Chain Strategies for Emerging Country

By: Dr Ferry JieSenior Lecturer, Program Coordinator (B BUS LSCM);RMIT University


Supply Chain Management Defined

A supply chain consists of the flow of products and services from:

� Raw materials manufacturers� Component and intermediate manufacturers� Final product manufacturers� Wholesalers and distributors and� Retailers

Connected by transportation and storage activities, andIntegrated through information, planning, and integration activities

Many large firms are moving away from in-house Vertically Integrated structures to Supply Chain Management


Supply Chain Management Defined (continued)


Supply Chain Management Defined (continued)

The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer Institute for Supply Management

The coordinated set of techniques to plan and execute all steps in the global network used to acquire raw materials from vendors, transform them into finished goods, and deliver both goods and services to customers

Logistics and Supply Chain Management Society

The planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities … also includes coordination with channel partners, which can be suppliers, intermediaries, third party service providers, and customers.

Council of Supply Chain Management Professionals

Cereal Value Chain Example

Purchasing & Supply Chain Management, 4e5

Farmer Processor Packaging Distributor

Grocer

Consumer

Corrugated Box Mfr

Lumber Company

LabelMfr

Grain Cereal

Packaged Cereal

Labels

Material

Information

Wood

Paperboard

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Kellogg’s Company

• Maker of popular cereal, breakfast, and snack products, such as Kellogg’s Corn Flakes, Rice Krispies, Raisin Bran, Pop-Tarts, Eggo Waffles, and Nutri-grain bars

• Founded in 1906 in Battle Creek, Michigan, by W. K. Kellogg.

• Adhere to strong quality standards and developing new technologies, such as Waxtite wrappers to keep cereal fresh for long periods of time.


Kellogg’sSales Around the World (in $ billions)


Kellogg’s Supply Chain

• The supply chain consists of 27 manufacturing plants in the United States and 19 plants in 15 countries around the world, including Australia, Mexico, India, Brazil, and Japan.

• Key supply chain decisions must be made throughout Kellogg’s network of plants.

Australia Beef SC Structure

Figure 5.1 Description of Australia Beef Supply Chain Framework

B R E E D I N G P R O P E R T Y

Feedlot

Auctions Plus

Saleyards

Fattening Property

Processing (Abbatoir)

Broker

Wholesaler

Supermarket (Woolworths, Coles, Franklin)

Food Service

Butcher Shops

D O M E S T I C C O N S U M E R S

Exporter Importer

Wholesaler

Food Service Industry

Butcher Shops

Supermarkets

Broker

O V E R S E A S C O N S U M E R S

Backgrounding Property

Live Animal Exporter Importer

Importer

Importer

Feedlot

Farmer Feedlot

Food Processing


Supply Chain Strategy

• Linked set of multiple organizations• Structured fashion• Supply Chains have existed since trading routes

were developed.• Information Technology

– Quick & Inexpensive Communication

• Globalization


Global Nature of Supply Chains

• Many companies have increased their offshore sourcing of parts, components, and finished goods.

• Manage multiple suppliers and shippers.• According to the World Trade Organization,

world merchandise exports have risen from $157 billion in 1963 to $8.907 trillion in 2004, an increase of 57 times.


Global Nature of Supply Chains

• China’s trade with the United States has grown from $5.7 billion in 1981 to $286 billion in 2005.

• The Council of Supply Chain Management Professionals (CSCMP) estimates that logistics costs 9.5 percent of U.S. GDP.

• Numerous challenges in managing that global supply chain include differing laws and regulations, different languages, cultural barriers, and political strife.

• Supply chain management plays a critical role in managing the manufacture and flow of goods around the world.


Supply Chain Challenges in Tracing Food

• Complex supply chain for food products in developed world.

• Traceability in the food supply chain is becoming a major issue.

• RFID– Indirect reading– Allow multiple items to be read– More information on code

• Contaminated Pet Food from China– 4,000 pets died

• Food Poisoning– 76 million illnesses– 5,000 deaths


AUSTRALIA DAIRY INDUSTRY


AUSTRALIA DAIRY INDUSTRY

• Dairy is the third largest agricultural industry in Australia, with a gross value of production of more than $4.6 billion. This industry generates exports of almost $3 billion per year. In terms of dairy production, the Australian dairy farmers produce around 9 billion litres of milk per year (36% is used for cheese production, 24% for skim milk, powder and butter; 24% for fresh milk; and 12% for whole milk powder (Department of Primary Industries, 2010)

• While Australia contributes just 2% of world milk production, it accounts for around 10% of world dairy trade, ranking third behind New Zealand and the European Union. Over 60% of annual milk production is exported, mainly to Japan, Singapore, Malaysia, Indonesia and China. There are more than 8,000 dairy farms in Australia, which employ 21,500 people directly on-farm and almost 40,000 people industry-wide. Dairy manufacturing is a significant contributor to regional economies with annual sales valued at over $12 billion a year (Department of Primary Industries, 2010)


DAIRY SUPPLY CHAINS STRUCTURE


BACKGROUND

• Dairy sector in Australia is in rapid change because: – Globalisation; – Highly competitive beef market (local and export); – Quicker production cycle; – Delivery times and reduced inventories; – Speed-up of the rate of change in the business

environment; – Trend toward more outsourcing of activities; and – Rapid development of IT


CONCEPTUAL FRAMEWORK


SUPPLY CHAIN PRACTICES

• SCM practices is defined as a set of activities undertaken in an organization to promote effective management of its supply chain.

• Seven elements of supply chain practice such as agreed vision and goals, information sharing, risk and award sharing, cooperation, process integration, long-term relationship and agreed supply chain leadership (Min & Mentzer 2004)


ANTECEDENT COOPERATIVE BEHAVIOUR

• Trust in trading partners is the willingness to rely on a trading partner in whom one has confidence (Ganesan 1994; Monczka et al. 1998; Wilson & Volsky 1998; Spekman et al. 1998; Mariotti 1999).

• •Commitment of trading partners is the willingness of each partner to exert effort on behalf of the relationship (Hamel & Prahaled 1989; Balsmeiere & Voisin 1996; Burnell 1999; Dale 1999; Lee & Kim 1999; Tompkins et al. 2002).


FACTOR AFFECTING DAIRY SUPPLY CHAIN

• Strategic Partnership and Collaboration • Traceability • Customer Relationship Management • Information Flow and Technology • Animal Welfare • Manufacturing & Quality System • Organisation • Food Safety • Logistics


HALAL SUPPLY CHAIN


HALAL AND HALAL SUPPLY CHAIN

• Halal means legal or permitted• Definitions of Halal supply chain:

“process of planning, implementing & controlling the efficient flow and storage of Halal certified product from source to the demand point”

(Che Man et al, 2007)“process of managing the procurement, movement, storage and handling food products through the organisation and the supply chain in compliance with the general principles of Shariah law”

(Tieman, 2009)• Halal integrity:• The product remain Halal from the upstream to downstream supply

chain, free from any activities that might breach the Halal status, intentionally or unintentionally.


SOME DEFINITIONS ON HALAL SCM


PREVIOUS STUDIES ON HALAL SCM



Halal Food Supply Chain Integrity

in Australia

(Dr. Mohd Hafiz Zulfakar, Professor Caroline C, Dr Ferry Jie)


HALAL FOOD SC INTEGRITY FRAMEWORK


STATISTICS• Growing Muslim population in Australia

� Australia’s reputation among world’s Halal meat exporters� Increasing demand of non-Muslim consumption� Increasing numbers of Muslims tourists/migrants to

Australia


HALAL STAKEHOLDER MODEL


Issues in Halal Supply Chain (Panel Discussion)

Halal Food Authority (HFA): 'Recent and potential developments in the halal industry'

• https://www.youtube.com/watch?v=N8c2pq7LArI


INTERNATIONAL COLLABORATIVE RESEARCH


• Thank you very much for listening • Any questions?


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Supply Chain Strategies for Emerging Country