A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains.
Nutria Cereals is a manufacturing cereal company which is newly launched in India. This company experiments with different ways to cook cereals without losing their goodness. Though it nationalised in India in its borders but its main strategy is to expand globally in cereals, snack business through supply chain management to serve the improved diet for improved health.
Today, many people regard breakfast as the most important meal of the day. A healthy diet is all about BALANCE – eating more of some foods and less of others. Whole grain based cereals for breakfast, which are low in fat, low in sugar, high in fiber is a big step towards achieving a balanced diet.
Satisfying the Needs of All age groups
It is an excellent start for the day and will give them the energy and essential nutrients to help them enjoy their activities.
Breakfast is important for teenagers. The carbohydrates and energy provided by cereals can help in maintaining concentration power throughout the day.
Eating the right and breakfast will make you more alert, so taking time for breakfast is important as part of your daily routine. A cereal high in fiber like oats can also aid your digestive system, helping towards a healthier lifestyle.
We also cater to the industrial and institutional market by providing alternative picking in bulk. These bulk packing sizes range from 15kg bags to 30kg bags. The type of packaging will be as per customer’s requirements.
Nutria Cereal produces wide range of cereal products, such as Fruit cereal, Nutria Corn Flakes, Nutria special, Nuts and Fibre and Nutria Grain cereal Bars.
Strategy and goals
Every Business Organisation will be focused on creation of profit but Nutria Cereals increasingly believes in acting responsibly in supply chain management and all sections rather than profit to become a better and long term business model for the customers and in terms of emission in manufacturing & distribution and improving packaging. The mission is to drive sustainable growth through the power of brand by serving the needs of customers, consumers and communities.
Supply chain management system of Nutria Company
The following can be explained the supply chain management from manufacturing to shelf of Nutria Cereal company as follows:
The industrial Supply chain management consist of 3 key sectors
1. Primary Sector :
It can also be called as Extractive Sector. It provides raw materials such as oil and coal or food stocks like wheat & corn. Example some raw materials are sold immediately for consumption as coal to power stations.
2. Secondary Sector:
It can also be preferred as manufacturing sector which means Assemble products. Example Nutria company purchases corn for corn flakes
3. Tertiary sector:
This can be called as providing services such as retailing, banking or transport.
The supply chain is a range of departments involved. This includes the above from Raw materials, Manufacturers, wholesalers to consumers. The business as a part of strategy, should also focus on distribute raw materials.
a)Supply chain competitive strategy
1. Beware of Cost advantage
Firstly thinking about the competitive strategy we have if it s price then it not good because every existing company in the market will cut its prices to survive as best as possible and low cost producer. If we think strategically the company should beware of cost advantages and should focus on innovation, because innovation is more powerful than low cost.
Example: Honda, Toyota collaborates with their suppliers to create an competitive strategy by focusing on innovations, including that will lower the cost of products and services throughout the entire supply chain.
2. Supply chain as a strategic asset
Most probably supply chain is not used as a competitive strategy although it should be used so. The supply chain can be a strategic asset when the purchases are more than 40% of total corporate budget.
3. Focusing on customers
The customers are the real root of the any Business. If the customers are not healthy in an organisation then you will inherit malady! More business is fail for the lack of sales or strategic positioning than other reasons. The company should understand the customer’s value need. The company should sell what their customers want rather than what the company want, this may lead to customers and brand loyal, for that the company should arrange the meeting with top ten or twenty customers. The objective behind is to make your customers more successful by offering them new innovations that helps us to beat our competitors, through increasing revenues and profit.
How well the company’s supply chain is managed and organised
Nutria manufactures the right products on research into customers need. It off-course also focuses on its effective cost to give a competitive price to the competitors. It manages the distribution channels to place its products in different stores.
The Supply chain management strategy to keeps the relationships with the retailers direct to improve its promotions of the products. All the retailers hold the less stock as they want to reduce warehousing cost. Though this strategy is more benefitted but according to latest learning of supply chain management Nutria company followed the system called JUST IN TIME to provide and efficient stock inventory system.
(Just-in-Time: Just in time are that production that produces well to order and the business doesn’t hold any level of stock.)
Stock control management system in Nutria corn flakes company
Every company has its own capacity to maintain its stock and also depends on its size of the firm. But apart from stock maintenance the company should balance its each section of supply chain. In case of late deliveries and out of stock may lead to loss of goodwill and might lose the orders (sales) and the competitors can be benefitted with regular retailers. So the stock management should also focus in every organisation. But Inventory may be the most expensive capital asset and therefore deserves the most scrutiny when we examine business processes. By managing the supply chain to reduce inventory, companies can decrease facility, material handling, and storage equipment requirements. Using information technology infrastructure like Kellogg’s, companies can change how to schedule production, often without capital investment, and dramatically reduce work-in-progress (WIP) inventory and material handling needs. Inventory is usually managed by information systems that are relatively flexible and easy to modify. They are certainly more flexible than facilities or material handling equipment, for that matter.
Nutria Company is following the latest computerised technology in terms of maintaining stock and holding an efficient distribution system, which holds always accurate stock check, always full delivers and orders on time. This helps the company to manage its stock.
Supply chain risk management
Where do these supply chain risks come fromThere are evidently tangible risks in the supply chain which lead to its poor performance, but what are not recognised in the same way are the intangible elements, that of the attitudes and perceptions of the users and members of the supply chain. The intangible lack of confidence in a supply chain leads to actions and interventions by supply chain members, which collectively, could increase the risk exposure. A classic example of this is the potential reaction from the customer facing end of a business. For example, if a sales team believes that order cycle and order fulfilment times are not reliable, they will devise their own means of addressing this. They may order stock so as to have supplies to support their key customers and put in phantom (ie their own private buffer stock) orders to secure supply, all causing inefficiencies. This risk spiral exists everywhere, and the only way to break the spiral is to find ways to increase confidence in the supply chain. To do so, we need to understand the elements of the supply chain that can reduce the lack of confidence – visibility and control
Confidence in a supply chain is weakened when end-to-end order cycle time, i.e., the time it takes from when an order is requested by a customer through to delivery, is excessively long viz a viz the
Competitive market. The increased internationalisation of supply chains and the prevalent use of subcontract manufacturing, distribution and logistics partners can contribute to the length of time it takes to complete all the needed steps in the process. Associated with pipeline length is the lack of visibility within the pipeline. Hence, it is often the case that one member of a supply chain has no detailed knowledge of what goes on in other parts of the chain – finished goods inventory, material inventory, work-in-process, actual demands and forecasts, production plans, capacity, yields, and order status.
In addition to visibility, supply chain confidence requires the ability to take control of the supply chain operations. Sadly, most supply chains do not have a great deal of control once the order is released. Hence, even if a supply chain manager has visibility of some part of the pipeline, he/she often could not make changes in a short time. For example, even if information is obtained on demand changes or on yield shortfalls, the supply chain manager may be helpless, since the suppliers may not be flexible to respond to any changes, or there are no expediting options
Available, or the production line is inflexible and production scheduling changes are not feasible, etc. Semiconductor manufacturers are often faced with this problem of lack of control. The long lead times by factories are such that, even if the manufacturer is made aware of sudden market demand changes, it takes a long time to respond so that the market opportunities are then missed.
Without supply chain confidence, members of the supply chain are liable to chaos and decision risks. Sales people start over-ordering since they do not have timely visibility of the correct demand signals, or they know from experience that supplies may be late or insufficient to fill the complete orders. Production plans are based on inflated production lead times due to similar lack of visibility and control. “Safety lead times” are commonly used in standard MRPs, since production
Planners do not want to be blamed for production delays. The lack of means to expedite or flexibility in manufacturing also mean that any yield shortfalls or production downtimes have to be made up by additional production, and as a result, lead times are stretched out in production plans. The irony is that, when planned production lead times are inflated, actual lead times will gradually match the planned target, a human behaviour known as Parkinson’s Law, which states that when a goal is too lax, then the tendency is for workers to relax and actually “achieve” the goal.
Without visibility and control, it is common that the supply chain is plagued with buffer inventories. Buffering is another means employed by supply chain managers to hedge against the uncertainties and risks in the supply chain. Excessive inventory of course leads to higher financial risks. Another means by which supply chain manager’s hedge against supply chain uncertainties and risks is investing in excessive capacity. The well-known episode of 1995-6 in the semiconductor industry is
The condition of 1995 was chaos, with many IC orders left unfilled, lead times were excessive, and supplier unreliability’s were at an all-time high. Worried that demand would continue to outstrip supply, semiconductor manufacturers were concerned with ways to assure supply. The problems faced by fab-less semiconductor manufacturers were even more acute. Without clear demand and supply visibility throughout the supply chain, and the feeling of not having control of their own fabrication capabilities had resulted in many fab-less semiconductor manufacturers finding ways to invest in capacity
The three sections of supply chain interacted to ensure that the products and services should reach consumers through accurate supply chain management. The efficient delivery of products to the consumers can result the smooth running of business. Specialisation is more cost effective for Nutria and partnering with other industry specialist reduces the cost to the business, the customers and environment. Through the above strategy and risk management, Nutria Company, the customers and the other business can be benefitted.