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Report 1: 3
Logistics supply chain
1.1 New Zealand Dairy Market (Dairy Products) 4 1.2 Destination Country (Australia) 4
1.3 Supply chain Logistics 5
1.4 Warehousing and Distribution 5
1.5 Freight Forwarders and customs 5
1.6 Physical Distribution Services 6
1.7 Product Finishing Operations 7
1.8 Freight and delivery option 8
Regulation of destination country regarding specific transport packaging and labelling of goods 9
Essential components of the export contract 11
3.1 Headings 12
3.2 Names and addresses of both the parties 12
3.3 Representation 13 3.4 Product, standards and specifications 13
3.5 Quantity/Quality 14
3.6 Inspection 14
3.7 Terms of delivery 14
3.8 Terms of payment, and amount 14
3.9 Taxes, duties and charges 14
3.10 Period of delivery and shipment 14
3.11 Licenses and permits 15
3.12 Insurance 15
3.13 Product Guarantee 15
3.14 Applicable law 15
3.15 Minimum orders 15
3.16 Signature of the parties 15
Supply chain management(SCM) is the management of the flow of goods. It includes the movement and storage ofraw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
What is Supply Chain?
1.1 New Zealand Dairy Market (Dairy Products)
Dairy is the backbone of New Zealand's food and beverage industry - it is the world's top dairy exporter and accounts for a third of the world's dairy trade. As New Zealand's biggest export earner (exports totaled NZ$12.1 billion in 2011), dairy contributes 25 percent to New Zealand's merchandise export earnings.
New Zealand's efficient all-grass farming system, large-scale processing, high levels of research and development investment and creative marketing are key strengths of the industry. Taranaki is the second most populated region at 11 percent.
Dairy products of New Zealand are not only the well known for its trading margin but also for its quality.
1.2 Destination Country (Australia)
New Zealand and Australia have one of the closest and broadest economic and trading relationships of any two countries in the world. Australia is New Zealand's largest bilateral trading partner, with two-way trade worth NZ$17.4 billion in year ending May 2012. New Zealand's exports to Australia are primarily made up of mineral fuel, precious metal, machinery parts, beverages, dairy products, and wood.
Australia, a big food and beverage producer in its own right, imports a number of New Zealand food and beverage products and is a net importer of food and grocery products.
New Zealand is the biggest supplier of processed food and beverage products to Australia, sending over 18 percent of all imported goods in 2010. In 2010, New Zealand exported more than NZ$2.4 billion worth of food and beverage products to Australia and in 2011, the exports grew by a further 13.7 percent. New Zealand's biggest exports to Australia are wine, cheese, food preparations, bread, pastry biscuits, fish fillets, butter, chocolate, water, infant formula and fish.(iii) New Zealand products are often packaged for home brand or other local labels.
All food imported into Australia must comply with Australian quarantine requirements by obtaining a quarantine import permit
1.3 Supply chain Logistics
Supply Chain and Logistics Technology is managing (planning and executing) the flow of materials, their transformation into finished goods, and their ultimate delivery as finished goods to the final buyer.
Global business is becoming ever more reliant on logistics and supply chain management in order to keep pace with the demands of an increasingly global economy. This is why business leaders acknowledge that the supply chain can be a value creator and a source of competitive advantage.
Overall, changes are aimed at delivering greater benefits for both Fonterra and our Vendors. This includes more efficient Management of critical activities such as ordering, planning and managing inventory – and processing of payments! The changes will only involve our ANZ business units.
1.4 Warehousing and Distribution
Facilities used for the receipt, storage and dispatch of all goods are maintained So that the quality and integrity of the products stored is maintained at all times. Precautions are taken to protect the product from contaminants such as insects, rodents, odors, unapproved chemicals, excessive temperature fluctuations and physical damage. Where temperature controlled storage is required, temperatures are monitored and recorded, to demonstrate compliance. regular and systematic cleaning and maintenance schedules are developed and maintained, to ensure premises and equipment are in a clean and hygienic condition, and pose no risk to product.
1.5 Freight Forwarders and customs
The freight forwarder is concerned with organizing transportation for companies. Their primary task is to combine smaller shipments to create a single large shipment to minimize the shipping costs. Companies using a freight forwarder will benefit as they are charged a much smaller shipping cost than if they had shipped their product independently.
Services of an International Freight Forwarder
Freight forwarders facilitate shipments by air, vessel or other common carrier. Their services may include, but are not limited to:
- Ordering cargo to the port of export
- Preparing export declarations
- Booking, arranging for and confirming cargo space
- Preparing delivery orders or dock receipts
- Preparing ocean bills of lading
- Preparing consular documents or arranging for their certification
- Preparing and processing letters of credit
- Arranging for warehouse storage
- Clearing shipments in accordance with U.S. government export regulations
- Preparing and sending advance notifications of shipments or other documents to banks, shippers, consignees or agents as needed
- Handling freight or other monies advanced by shippers
- Remitting or advancing freight, monies or credit in connection with the dispatching of shipments
Fonterra has become the first New Zealand Company to be invited to join the World Customs Organization’s Private Sector Consultative Group (PSCG). .
1.6 Physical Distribution Services
Export distribution Send out appropriation includes the moving parts of indispensable piece of universal exchange. Organizations of all sizes ought to wind up acquainted with the dissemination frameworks between the birthplace fabricating area and the focused on businesses.
While numerous parts of worldwide showcasing permit an exporter to be imaginative and extraordinary, there is no place for blunder in fare mechanics. The part of administration suppliers in universal logistics and transportation can't be disparaged. It is best to leave this procedure to the specialists, who make their living by taking in the most productive and moral transportation techniques accessible.
1.7 Product Finishing Operations
As a precision component manufacturer, Laszeray conducts a variety of secondary and finishing operations to ensure your final product matches your requirements to the finest detail.. To our leading consumer brands and foodservice business in New Zealand, our work at home forms the core of our global dairy ingredients business.We operate more than 30 manufacturing sites across the country and process about 16 billion liters of our farmers’ milk each year.
Product finishing operations include:
1.8 Freight and delivery option
Providing convenience to your customers. Offering delivery options that fit their schedule.When they offer their customers our residential delivery and notification options, youandyour customers will benefit:
- Fewer missed deliveries.
- Convenient Saturday and evening delivery options.
- Satisfied clients.
- Increased customer loyalty.
Unishippers offers a full portfolio of freight options to meet your business’ specific needs. Our partner network includes more than 30 of the top national, regional and local freight logistics companies.
The Auckland-based co-operative is upgrading its Whareroa site, having spent $23 million improving the facility's cool store since 2011. The plan is to reduce costs by keeping product stored near processing plants, and within easy access to ports. This investment at their Whareroa facility will improve their logistics network's storage capacity and address existing capacity restraints in the region.
Packaging is used to protect our product, minimize damage and plays an important role throughout lifecycle of the product. it protects the product from the atmosphere, micro-organisms and pests from the time of packing until it is consumed and it also the first perception the customer has of the product. This requires packaging to be both functional and aesthetically pleasing.
The New Zealand Food Inspection Agency is responsible for labeling and packaging on products covered according to theDairy Products Regulations of Australia government. TheConsumer Packaging and Labeling actandRegulations, and theDairy Products Regulations.
Food Standards Australia/New Zealand (FSANZ) regulates the delivery of safe food. FSANZ operates under the Food Standard Australia New Zealand Act 1991. There are labeling exceptions; these cover mostly bulk products meant to be repackaged, fresh fruit and vegetables, livestock products, food additives and container and packaging for food products. These all follow different labeling standards.
Labels must include:
- Name of food
Product name: the product name should be identical to the product name declared to the licensing/inspection authority.
- Name and address of supplier
The label on a package of food must include the name and business address, in Australia or New Zealand, of the supplier (packer, manufacturer, vendor or importer) of the food.
- The review of country of origin labeling requirements for food has not been finalized. The country of origin preceded by 'made in' or 'product of' should still be indicated on all food products. This can be the country where the food was made or processed.
- Australia has fully embraced the metric system. The product’s content should be indicated in the metric equivalent:
- Liquids in milliliters (ml ) or Liters (L)
- Solids in grams (g) / Kilograms (Kg).
- Apart from a few exceptions, all food products must have a best before date written on the package. It is illegal to sell food past its shelf life.
- All food products must have a unique number connecting them to the batch during which they were produced.
- The food label must include directions on its use or storage if the food’s nature needs such directions for reasons of health or safety.
- Manufacturers must include storage information where specific storage conditions are required in order for the product to remain safe until its ‘Use-by’ date. Any products that must be kept at low temperature must be clearly indicated.
- Ingredients must be listed from greatest to smallest by ingoing weight, including water.
- Consult the following document for maximum allowable addition of vitamins and minerals, depending on the food product type.
- Irradiation of food and/or ingredients is prohibited unless specific permission is given.
- Foods which are known to be dangerous to people with allergies must be clearly labeled, however small the amount. For example, nuts, seafood, milk, gluten, eggs, and soybeans.
- Unless specifically permitted, Transitional and Temporary Standard for Health Claims in food labels and advertisements are prohibited in Australia.
- Manufacturers should ensure that their pictorial representations do not give a misleading overall impression about their products.
There are no packaging or container-size regulations for food products in Australia.
- Most chains look for cartons with a maximum weight of 16 Kg, Woolworths requires cartons to weigh 12 Kg or less.
- Although North American pallets are accepted by all importers, many chains and customers who deal with local suppliers will expect products to be on Australian standard pallets.
- For containers being trucked within Australia, the maximum weight allowed is higher than the usual maximum weight allowed in the United States. The container must be within the weight limits of the State regulation.
Essential components of the export contract
A contract is an agreement that creates an obligation that is a binding, legally enforceable agreement between two or morecompetent parties. A contract can be
worked out either by the seller or the buyer, and it is called a sales contract or purchase contract respectively.
But it is difficult to draw up a comprehensive contract that can be standardized for all export transaction. However, the exporter and importer should be aware of certain minimum general requirements when drawing up an export sales contract.
From a more practical perspective, a contract may be summarized in the following fourbasic points:
• It is anagreement, generally in writing,between two ormore parties.
•It contains rights and obligations. The contract document establishes the rules that are to be followed by the parties.
•It servesto regulate business relations
•It is generally for a specifcperiod of time.
Content of a contract
This is thetitle of thecontract; for example: “Sales Agreement”, “Distributorship Agreement”, “Brokerage Agreement”, etc. Our Contracts heading is Export Contract.
This content identifies anddescribes the parties, i.e. the persons and/or companies signingthe contract. The parties to the contract should be clearly stated.
Fonterra NZ Ltd.
9 Princes Street
Auckland City Centre,
Auckland City, Auckland 1010
Australian Customs Service
5-11 Constitution Avenue
Canberra, ACT 2601
Phone: 02 6275-6666
Fax: 02 6275-6999
Imported Food Program
Australian Quarantine & Inspection Service
GPO Box 858
Canberra, ACT 2601
Phone: 02 6272-3097
Fax: 02 6272-3682
Email: [email protected]
Food Standards Australia New Zealand
P.O. Box 7186
Canberra Mail Centre, ACT 2610
Phone: 02 6271 2222
Fax: 02 6271 2278
Email: [email protected]
This clause follows immediately after the naming of the parties and states the attributes of the person, who appears to sign the contract,
3.4 Product, standards and specifications
This content is about the product means which type of product we are going to export. It includes the product name. If there are any size in which the product is to be supplied; the applicable national or international standards and specifications are needed.
For example dairy product(Cheese)
This clause describes thetype of goods to be delivered, aswell as the quantity, size, weight, quality standards and other specifications. In this units of measures should be clearly specified.
This clause is about inspection of the product before exporting it to the market. There are some agencies that do this kind of inspection when product is ready to export from Manufacture Company. Therefore, the parties should clearly state the nature of the inspection process.
3.7 Terms of delivery
Terms of delivery should be clearly specified in contract. It just determine the time required in which the goods are to be delivered.
3.8 Terms of payment, and amount
This clause determines the method of payment, the amount, the frequency and theplace where payment will be received for the transactions carried out.
Taxes charged applied under the common agricultural policy. If any, in the country of importation may be the buyer’s responsibility. So it should be clearly defined.
It specifies the period in which the product is delivered to his destination i.e Australia. It also defines about the shipment.
. The following documents are mandatory:
Customs Entry or Informal Clearance Document (ICD)
Air waybill (AWB) or bill of lading (BLAD)
Packing list, and
Other documents relating to the importation and requested by the importer.
We have to disclose documents regarding to Export license and permit to export dairy product. Australian Customs does not require companies or individuals to hold licenses to import goods. However, depending on the nature of the commodity, permits may be required to clear the goods.
A contract should provide for the insurance of goods against loss, damage or destruction during transportation.
3.13 Product Guarantee
The length of the period of guarantee should be fixed.
3.14 Applicable law
In this clause both parties have to disclose and agree with the law is going to applicable means if something goes wrong in trade then we have to define in the contract before trade that which countries law will apply.
3.15 Minimum orders:
This clause may serve to compensate for the assignation of territory and the granting or not of exclusivity. It generally establishes an initial minimum orderî€or the products of the principal/exporter. It may also determine subsequent minimum orders, which, ingeneral, will be submitted in a phased manner and in accordance with a reference schedule
This is the last stage of contract where Exporter and Importer are agreed and sign with all above steps and they are responsible for any dispute in trade.