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The company M founded in 1950, in Melbourne. Leading Diary Company in the industry the main sales of various diary ingredients involved milk powder, cheese, and milk fat product. It is well known due to it is made by high quality milk by produce through strict food safety testing and production process and it is the advantage in this area and place reputation of quality, healthy and no pollution in customer's mind.
Now the company grab approximately 34.5% market share in Australia, employees 2000 in Australia and company are not satisfied with the status quo seeks expand the market worldwide, opening factory in China aware China has a huge potential market and looked to tap into China, main product is sell company's flagship product infant Nutrition with strategy of using Australian milk, Australian technology and produces in China. (M 2010) The company chooses factory location in Qingdao a city located in northeastern coastal town have excellent geographical location which close to bigger city Beijing, Tianjin and convenient freight from Australia to Shanghai port to Qingdao.
Supply chain is maintain long-term cooperation with domestic and foreign customers, and continuously review and improve supply chain processes. This has led to closer working not only customers, but other raw materials supply and transport chain within partnerships. Company collect milk from famer, M control by using real-time system by networks to handle real-time message to connect with distributor and customer. M work with Logistic team for transportation but M manage its own plan of milk transport because the nature of milk have to be consider and they provide own technology with logistic company such as Liquid Natural Gas in transport vehicles, also have cooperation relationship with distribution centers and shipping port.
In this assignment is focus on infant Nutrition milk powder export. In MG there are two different packing way transport to China are original brand infant milk and big packaging milk powder which imported to China's factory and repacking. Base on milk production principle and a technological condition is quickly evaporated milk and water into milk. Avoid contamination during production process. According to above in infant Nutrition packaging need to filling to ensure quality and keep fresh in dry place, therefore in long-term and long distance shipping milk powder can be costly because of transporting requirement ensure quality.
3. Research Method
This article makes use of questionnaire method, Good questionnaire writing is a no- or low-cost option in any survey, which has major rewards in delivering the best, or most accurate, answers. (Brace 2008) According to Appendix A presented (Petter,S ,Davis, A 2002)decide to use website based email way to collect information because fast speed and high reply rate also the lower cost. I sent message online to MG's contract team and reply me about my research within 4 days and I ask about the information of the person who reply my research about company's supply chain by ask online and email it is an effective research methods.
4. Parties in supply chain
A supply chain involved many parties and play their role. Supply chain is defined as 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. (Nagurney 2006)
There are five parties involved in company supply chain constitute the basic elements of the supply chain include:
1. Farms, milk supplier to the company
2. The company itself is responsible for production, development and service.
3. Distributor of the product to every corner of the geographic scope of business in Australia company itself undertake the responsible for this work, generally taken for overseas will cooperate with local enterprises.
4. Retail enterprises sell their products to consumers step.
5. Logistics specializes in providing logistics services, including wholesale, retail, logistics, can also be referred to as circulation. To export milk powder to China has to complete process start from order placed by customers to the product deliver to customers.
Important of supply chain for a company is going to contribute a complete work of trading without any part with in supply chain will damage resulting from the supply chain break down detailed talk about the 5main parties' role play in company supply chain.
1. Supplier, provide raw material in supply chain, it is all start before producing it before manufacture step. Once customer place order the company will calculate demand and buy quantity of milk to make milk powder. The most important thing supplier under consideration is milk quality control it is the source of product reflect on technology and efficient and competitiveness compare with other company, in company it is purchasing process and network could be use in exchanging.
2. Manufacture, company producing in factory, in manufacture is convert milk to infant nutrition and the role of this step is design and producing.
3. Distributor, export product overseas distributor play a important role of selling in a new market, choose a reliable distributor in a brand new market is lead the trend of future market and customer oriented function. The reason Company M give up to distribute by itself get work together with local distributor because local distributor are get understand market more clear, effective and time saving.
4. Retail, company after achieve distribute work retail product in big supermarket in China usual.
5. Logistic, usually concentrate on transportation, Company M outsourcing to National Freight Distribution Team it is guarantee of efficiency and high levels of services, company not doing it be themselves because business never get into transport area and corporate with a larege international distribution team provide large and stability market when choose physical distribution partner they are pay attention to the network very much the cover region and the network mesh point density question.
5. Relationship in between parties
Company M's headquarter is in Australia and milk supplier is in Australia, export original brand infant milk powder to China. Company M' milk supplier Farmers also received the benefits of the Co-operatives bulk purchasing power and delivery expertise and company is being responsible for the process qualification, work on continuous improvement of quality in assembly as manufacture. Distributor responsibility is fully controlled by company in some ways because company distribute product to retailers for example supermarket, specialized shop, products deliver to them by logistic team hired by company M. In China's factory could as a terminal station repacking the big bag milk powder produced in Australia into small package. Distributors are those that specialize in transferring goods from producer to consumer organizations and personnel activities, when the activities of these distributors after industry, distribution industry also armed. Is divided into the so-called distribution to sales. Can be seen in the sales process, has been taken into account under the family situation, not blind sales, but there are plans to sell, the business concept of a servi terminal. The implementation of supply chain management strategy is to solve the specific implementation of enterprise supply chain management in the manner of the methodology and strategy is based, to avoid detours, or errors and other issues. The implementation of supply chain management strategies enhances the communication of information, give full play to the role of information and achieve a quick market response, and promote lean enterprise collaboration to achieve information exchange network. Methodological guidance also helps people avoid detours to avoid losses. Supply chain management has two objectives: to enhancecustomer service levels and reduce operating costs, which are often two contradictory goals, namely to improve service levels, based on the cost of increased costs; and reduce costs, oftenwith To service levels decline. Time on two goals have an important impact: the level of service, the most important response to market demand, that demand response time; the costs, time will result in increased operating costs of various Such as storage costs, sluggish sales of the losses. Enhance time management can be achieved in service levels and operational costs while optimizing two aspects.
There are five recommendation of building good relationship between parties.
First, organizational strategy, organizational structure redesigned that it can meet the operational requirements of supply chain management, the company's headquarters can play the role of planning and regulation; Second, reform of the enterprise's business ideas, the implementation of supply chain management the first to raise it in the ideological understanding of business, in order that meet the business development goals and operating rules of supply chain management strategies; Third, through the sharing of competitive information to enable the supply chain business in a timely manner or to adjust their production strategies, take the initiative on the side of the position in the market; Fourth, the use of advanced technology, advanced technology should support the supply chain coordination as the basis for operation, and with the technology to keep the new, more advanced technology advance;
Fifth, performance measurement, the system runs an executive-level performance is result of the efforts, through the performance analysis of system operation can be good or bad, and make improvements; sixth, supply base strategy, to keep your business have more choice, understand each vendor resources The role of combination, and establish strategic relationships between suppliers help to improve business advantage in the resource portfolio.
6. Challenges involved in international trade
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Petter,S and Davis, A 2002, 'Quantitative Research Methods: Questionnaires', viewd on 5th May 2011
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Dwivedi,A and Butcher, T 2008, 'Integrating Critical Perspectives in Theory and Practice', Supply Chain Management and Knowledge Management,pp114-127