Supply Chain Management Assignment: Business Case Analysis Of Murray Goulburn
Descriptions and Instructions:
The supply chain management assignment is an individual assessment that requires students to write a business report. This assessment focuses on students’ understanding of the basics of logistics and supply chains and how companies can take advantage of their resources and/or capabilities in their supply chains to maintain competitive advantage and achieve desired performance. The business report should include the following aspects:
• Identify a typical supply chain of an exemplary firm/sector in Australia.
• Identify the business units and products and services lines in supply chains.
• Identify its business units’ revenue and discuss their relative importance.
• Analyse the advantages of the firm/sector’s supply chain based on its resources and capabilities, and how they can increase the performance of the supply chain.
• Discuss its disadvantages compared to other related supply chains and how they can decrease the supply chain’s competitive advantage.
• Make recommendations for the future strategic directions of the selected supply chains. • Write the report in English with structured sentences that conform to academic writing guidelines.
Food supply chain management plays an integral role in the delivery of food to the final customer. After its production or harvesting, food has to go through other processes like storage in a safe place, safe delivery, and then retailing. Studies show that every year approx. 1.3 billion tons of food is wasted (Haleem & Sufiyan, 2021). Food Supply Chain Management (FSCM) plays an important role in ensuring the safety of food and maintaining its quality using efficient and effective methods. FSCM keeps a check on activities like production, distribution, and consumption to reduce wastage of food. The FSCM framework provides a system for activities like processing, manufacturing, and conversion of raw materials and semi-finished products.
Figure 1: Murray Goulburn Products
(Source: S0.whitepages.com.au, 2022)
2. Overviewbr> Among several companies from the Australian food supply chain; Murray Goulburn Co-operative Co. Ltd. was the largest dairy foods company in Australia. This company was 100 percent controlled by dairy farmers and has around 2200 farmer-supplier shareholders (S0.whitepages.com.au, 2022). All the suppliers in MG were supposed to hold shares. The supplies to the foodservice industries and the retail sector were done by MG globally with its flagship Devondale, Liddells, and MG Ingredients brands. The contribution of MG to the rural areas was very significant. It had 10 processing units, corporate offices, and ancillary businesses (MG Trading Store). The stores are situated in Tasmania, New South Wales, Victoria, and South Australia (S0.whitepages.com.au, 2022). In this company, the farmer-members were used to make ongoing contributions of capital. This capital was redeemable upon exiting from the co-operative. Therefore, farmers used to share dual relationships with co-operatives. There were options of incentives as well to maximise prices paid to all farmers (Accc.gov.au, 2022). Through all of these, and by reducing the costs of non-agricultural inputs, the above-mentioned firm used to leverage their supply chain components as well as functions in order to gain competitive advantage.
Figure 2: Dairy regions and processing plants of Murray Goulburn Co-operative Ltd.
(Source: Accc.gov.au, 2022)
The Murray Goulburn Co-operative Co. Ltd. indulges in various operations like sugar manufacture, production of sustainable agricultural products, and other by-products of sugar, like ethanol, renewable electricity (Weiet al., 2018). It produces cane products and by-products of sugar. Murray Goulburn Co-operative Co. Ltd. was the leader in the Australian grain industry and the largest Cooperative in Australia. It performs the operations of storage, processing, marketing, handling, and transporting fertilizers and grains.
3. Business Units, Products, and Services Lines
Murray Goulburn Co-operative Co. Limited
Business units Products and Services
MG Nutritionals (the research division), Ascend (Sports Protein), MG Qingdao Dairy, MG ingredients (Supplies milk powder, casein, concentrate, and whey), MG Trading, Corporate brands division (supplies to consumer brands), Liddells (lactose-free dairy products), and Devondale (consumer brand of milk and cheese) It produced a complete range of dairy products including cheese, butter, milk powder, milk, and other dairy beverages (Seifzadeh, & Rowe, 2019). Also, nutritional products like infants’ formula are produced.
Murray Goulburn Co-operative Co. Limited
Products and Services
MG Nutritionals (the research division), Ascend (Sports Protein), MG Qingdao Dairy, MG ingredients (Supplies milk powder, casein, concentrate, and whey), MG Trading, Corporate brands division (supplies to consumer brands), Liddells (lactose-free dairy products), and Devondale (consumer brand of milk and cheese)
It produced a complete range of dairy products including cheese, butter, milk powder, milk, and other dairy beverages (Seifzadeh, & Rowe, 2019). Also, nutritional products like infants’ formula are produced.
Table 1: Business Units, Products, and Services Lines
(Created by developer)
4. Business units’ revenue and its importance
Murray Goulburn Co-operative Pvt. Ltd.
Revenue: Approximately $2.4 billion
Importance of revenue
Revenue is the earning of the company before taking out or deducting any expenses from it. It is also called sales. Without revenue, a company cannot earn profit and run in the long term. No revenue or zero revenue is the indicator of unprofitable business (Abrateet al., 2019). If the revenue increases only then the profits increase.
5. Advantages of the Australian Food Supply Chain
Easy access to healthy food
The most common public health issues occur due to the bad quality of food being consumed. Low-quality food impacts health in many ways and leads to diseases like diabetes, cancer, obesity, etc (Devin, & Richards 2018). Most people tend to eat unhealthy and packaged food instead of healthy foods like fresh fruits and vegetables. The Australian food market has improved the access to and availability of healthy food and it addresses the common issues of health. Some organizations in the Australian food market are making freshly produced food accessible for people to eat and improving their overall health and addressing issues regarding weight management. Such food is not only provided to the upper economic classes, but also to the people with low socioeconomic status. It ensures equity and also social justice in the community. The MG Co-operative Co. Limited offered a complete range of healthy and nutritious milk products.
Improvement of the economic and environmental sustainability
Many organizations use such food systems that are helpful in reducing waste up to a great amount and ensure the improvement in both economic and environmental sustainability. Not only has this but the farmers had the liberty to set the price of their own. This would protect the farmers from being oppressed and suppressed by the giant supermarket chains. Both the consumers and the farmers have joint control over the food system ensuring fair prices and economic sustainability. Murray Goulburn Co-operative Co. Ltd. generates its own electricity contributing to the sustainability of the environment and sells the excess electricity in the Queensland electricity grid (Devin, & Richards 2018).
Community empowerment and engagement
The people are being made aware of the process of how the food journey takes place and how it ends up from the farmers to the final consumers. Training and skill enhancement of people using the mode of local industry and local employment is another benefit of the food supply chain. This also leads to the creation of various jobs at the local level.
Food safety and quality
The Australian food supply chain is leading in food quality and safety. It uses various food tech innovations, technologies, and bio-security standards for food traceability, winning the trust of consumers and gaining global visibility for the food supply chain (Jieet al., 2013). MG provided safe and best quality milk and milk products. The farmers themselves were the controllers of the business taking care of the quality.
Reputation in the Global Markets
The regulations and frameworks of food safety and the quality assurance systems of the Australian Food Supply Chain has got a great reputation for Australia in the food supply chain industry (Liu, et al., 2020). The food safety, quality, and exports of the food produced are governed by various bodies like the Food Standards Australia and New Zealand and the Department of Agriculture and Water Resources. This improves the reputation of Australian produce in the global market. Firms like MG Co-Operative Co. Ltd, have made a great reputation in the international market.
Opportunity for Global Investment
The food supply and security chain of Australia ensures transparency and the Australian food supply chain market opens the way for global investors. The research and development (R&D) sector of Australia has made remarkable achievements in the innovation and development of various food traceability systems. The blockchain-enabled technologies are helping global food producers to engage with the Australian Market.
All aspects of the manufacturing processes are laid out in the supply chain, including the activities that take place at each stage, the information that is communicated, and environmental assets that are transformed into valuable product, human resources, as well as other types of resources that go into the final product or service (Zeller &Langa, 2018). In addition, the higher the capabilities, the greater the company’s performance could be. In such ways, both of these can enhance the SCM performance.
6. Disadvantages of the Australian Food Supply Chain
In Australia, people are facing chronic food insecurity because of two factors that are affordability and availability. Some people are so low in socioeconomic status, even affording a one-time meal is difficult. Some people run out of food and are not able to buy or afford more food. Another reason for food insecurity is the availability of food. The main issue is finding an affordable food outlet in the neighbourhood is difficult, especially in the rural areas. The mobility restrictions and physical infrastructures are the reasons that people cannot go to shops to buy food. The CBH Group Holdings Pvt. Ltd. is facing issues with the storage of the grains. The main reason for the shortage of storage is a large amount of protection because of high demands. Due to a shortage of storage space, the grains are being produced as per the storage unit. This affects the availability of the food.
According to National Food Waste Strategy Feasibility Study, every year, approximately 7.6 million tons of food is wasted or lost in Australia. The Australian households are contributing to the majority of the food waste, i.e, 2.46 million tons. And out that wasted food 70% is edible. Around 312 kg per person of groceries is thrown away by Australian households. To stop the wastage of food in Australia, the Minister for the Environment has launched Stop Food Waste Australia in December 2020. Due to a lack of infrastructure and efficient vehicles, the quality of cheese, and other milk products gets affected. The perishable nature of these products also imposes the risk of wastages of food that is faced by Burra Foods Australia.
Climate Change and Food Insecurity
The adverse weather events put the food supply chain at risk. The climatic changes are also a threat to food security in Australia. The increase in temperature impacts food production. If the production is disrupted, the food availability and the food prices will rise leading to food insecurities (Ray, et al., 2019). Due to the climatic changes, the patterns of weather are becoming unpredictable imposing serious consequences on the agricultural production of Australia. The frequency and intensity of heat waves affect the prices, quality, and availability of food. Australia is more prone to climatic changes resulting in floods or droughts. This leads to food supply disruptions. The impact of climate on milk products is significant. During high temperatures products like cheese, butter and cream start to melt. MG was a cooperation of farmers unable to get business loans and subsidies easily, leading to a lack of capital to invest.
In addition, there were incentives available to increase the amount of money given to all farmers (Accc.gov.au, 2022). All of these, as well as cost-cutting measures, will help. The farmer-members were utilised to make regular capital contributions to the organisation. Moreover, there were some other benefits available for farmers as well, since they are the most important stakeholders of this case company. Therefore, these schemes had helped this company to solve challenges.
7. Recommendations to improve supply chain
The increasing production and export of agricultural and other commodities in Australia like wheat, beef, dairy, sheep meat, and sugar are going to put pressure on the expansion of the infrastructure that supports these supply chains. Wheat- Although the infrastructure and the current networks of distribution are sufficient for the processing and storage of wheat but in the future with seasonal conditions, expansion of this capacity is needs to be done.
Sugar- The demand for sugar is ever-increasing. More demand would lead to more production and more production means more handling capacities. These handling capacities need improvement over time because of the increase in production. Supply chain management has always been approached from the top down. The best practises for improving supply chain efficiency, according to recent research, are to enlist the help of relevant department experts who are familiar with the specifics of their supply chain on a day-to-day basis to provide valuable insight; ultimately, this more granular approach is the most effective way to increase overall manufacturing productivity through supply chain efficiency (Koberg&Longoni, 2019). Dairy- The production of dairy products is increasing substantially and it implies a need to increase the supplies of milk and fodder to the regions that contribute the most to the production process. Simply said, a strategic plan is a vision for the future of your firm, as well as the fundamental measures necessary to attain that goal. A solid strategy should contain goals and objectives, intended results, metrics for monitoring your progress, timetables, and budgets, to name a few considerations.
The Australian Food Supply Chain is one of the most developed food supply chains using food tech innovations to the fullest. It has opened the possibilities for global investors to invest in the market and has earned a good reputation in the international market. The use of various technologies helps to maintain the quality of food and to keep it safe. But on the other hand, there are some areas which need attention. The climatic changes are the most important factor for determining the stability of the Food Supply Chain. So, measures have to be taken to face the climatic conditions with no or very less harm to the market. Plus, a resilient food supply chain should be built, and infrastructure should be improved in order to ensure less wastage of food.
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