Supply Chain Challenges for Australian Cheese

This assignment analyzes the challenges faced by the Australian dairy industry in transporting cheese products globally. It identifies three key issues: outdated technology, inadequate cheese storage during transportation, and political complexities in host countries. The report suggests solutions such as implementing RFID technology, upgrading cooling systems with automatic temperature controls, and developing mutually agreed-upon legislation to facilitate international trade.

Running head: FOOD MARKETING
Food Marketing
Name of the Student
Name of the University
Author Note

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Table of Contents
1.0 Introduction................................................................................................................................2
2.0 Discussion..................................................................................................................................2
2.1 Justification of product selection...........................................................................................2
2.2 Explanation of supply chain..................................................................................................4
2.3 Evaluation of the supply chain..............................................................................................5
2.4 Recommendations..................................................................................................................6
2.4.1 Incorporate new technology...........................................................................................6
2.4.2 Improving cheese storage system...................................................................................7
2.4.3 Following all the governing legislations.........................................................................7
3.0 Conclusion.................................................................................................................................7
4.0 Reference List............................................................................................................................8

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1.0 Introduction
Fox and Guinee (2013) stated that supply chain lead to the optimization of the business
operations that maximizes the speed and efficacy of the delivery of products from manufacturer
to the end-user. In this business report the supply chain process of a dairy product that is Cheese
is taken into consideration. Moreover, proper explanation and evaluation of the supply chain
process is also illustrated which is followed by the recommendation for the further improvement
of supply chain and strategies. Lastly, an overall conclusion is also drawn based on the entire
discussion.
2.0 Discussion
2.1 Justification of product selection
In Australia, dairy industry majorly associated with three major manufactured products
streams- fresh dairy products, cheese and butter and milk products like- , wholemilk powder
(WMP), butter milk powder (BMP) and skim milk powder (SMP) (Australian Dairy Industry
2017). It is also found that 28% of the dairy products streams are for fresh dairy and the butter
milk and cheese products stream consumes 36% each (Australian Dairy Industry 2017).

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Image 1: Australian Dairy Products Streams
(Source: Australian Dairy Industry 2017)
Cheese is also considered as one of the major products for the Australian dairy industry
and around 344,000 tons of cheese was produced in the year 2015-2016 (Australian Dairy
Industry 2017). It is also found that nearly 45% of the cheese sale in Australia is done through
supermarket chains (Dairyaustralia.com.au 2017). The report from Dairy Australia also shows
that compared to 2014, the sales volume of cheese increased to 2.0% in 2015/16 but suffered a
loss due to inappropriate supply chain management (Dairyaustralia.com.au 2017). The prime
reason to select cheese is because cheese can be preserved for more days and the supply chain
process can be expanded to attain more profitability. On the other hand, other dairy products
cannot be preserved to such an extent and thus, the supply chain process cannot be expanded to
supply the products to distant places.

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2.2 Explanation of supply chain
The Margaret river dairy company processes the raw milk through pasteurization process,
renneting cutting and scalding and pitching and draining (Bilgen and Celebi 2013). The salting
process is then performed for the formulation of the cheese. The formulated cheese then
proceeded further to the packaging and then taken to the manufacturing plant. Furthermore, from
manufacturing plant the cheese products associates with supply chain through two modes-
domestic and export. Margaret river dairy company’s supply chain is effective for domestic
supply. Supplying the cheese and other milk products to Woolworths shows their effectiveness
and customer also consumes their products more. However, the supply chain from cheese export
suffered from disadvantage that material are not sent to other territories (Validi et al. 2014).
Thus, the organization aims to supply their cheese products especially to Asian territory so that
they can enhance their brand name and attain great profitability. Ayagg et al. (2013) highlighted
that a dairy industry can handover their final cheese products to importers and exporters and they
on the other hand provide the final goods to the food manufacturers.
Image 2: Supply Chain Process in Diary Industry
(Source: Ayagg et al. 2013)

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The key stakeholders in this process are- the employee of the organization, who are
involved in the process of the cheese formulation from milk, the transportation employee, liable
for taking the cheese products to the manufacturing plant (Glover et al. 2014). The staffs in
inventory are also plays a crucial role and are key stakeholders for maintaining the cheese and
make them ready for export to other territories. Costa et al. (2013) furthermore depicts that
supermarket chains and hospitality sectors are the major stakeholders of the dairy industry. These
industry will them supply the cheese products to the end-customers of the host country.
2.3 Evaluation of the supply chain
The current supply chain suffers from three major issues. The SWOT analysis for the
current supply chain process is as follows:
Strength Weakness
Local supply chain system is accurate and
delivery is on time always
The quality of the supplies material always
met consumer’s expectation
Well positioned for effective export growth
Inefficient tracking system of the cheese products
Improper maintenance of the volatile climate
conditions
Problem in establishing effective supplier/partner
relationship management
Opportunity Threat

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Opportunity to include technology for
developing traffic system
Development of the cheese storage system
in transportation carriages
Establishing relationship with governing
bodies for effective business partnerships
Huge financial resources for incorporating
technology
Inappropriate development of technology and
inexperience staffs
Political problem may arise that interrupt business
process.
Table 1: SWOT analysis of existing supply system
(Source: Created By Author)
Firstly, the tracking system of the cheese products is not efficient and this is the major
reason the problem of theft and lack of timely delivery occurs. Secondly, due to volatile climate
conditions, the state of cheese deteriorates; thus, the storage technology of the cheese products is
also not appropriate. Thirdly, maintaining effective supplier/partner relationship management is
another big challenge for Margaret river dairy company.
2.4 Recommendations
The three problems that is identified are- inefficient tracking system of the cheese
products, improper maintenance of the volatile climate conditions and problem in establishing
effective supplier/partner relationship management. In this case, the solutions that can be
incorporated for improving the existing supply chain system are-
2.4.1 Incorporate new technology
In order to overcome the problem of theft and improper delivery, technology of RFID
tags can be incorporated. All the cheese packages are entitled with a code and a tracking system
that can be monitored through the inventory staffs so that the locations and progress of the
products can be assessed continuously. Some of the benefits that can be attained through the

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implementation of this processes are- less manual work ensure accuracy in the business process,
low cost of the products, improved visibility of the delivery process and enhanced planning.
2.4.2 Improving cheese storage system
All the supply transportation carriages should be incorporated with cooling system so that
the cheese products can overcome the climate transitions and fresh products can be supplied to
other nations. Moreover, automation technology for controlling the temperature of the cheese can
also be incorporated.
2.4.3 Following all the governing legislations
Margaret river dairy company should develop mutually agreed upon standards so that the
concerned organization can establish an effective partnership with the governing bodies. This
will help the organization to survive any kind of political disputes. Another advantage that the
organization can attain by following all the legislations is the proper business ethics and an
effective brand image in host country and this influences their consumer’s to use their products.
In addition to that all the mutually developed regulations establish great understanding among
suppliers and the transportation of cheese products can be accomplished efficiently.
3.0 Conclusion
It is found that cheese is considered as one of the major products for the Australian dairy
industry and nearly 45% of the cheese sale in Australia is done through supermarket chains. The
major challenge the industry face is to transport the milk products outside their territory. Thus,
three identified challenge of the supply chain are- outdated technology, cheese storage system
while transportation and political issues of host nations. The solution that is suggested in this
assessment are to incorporate RFID technology, improve cooling system and automatic

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temperature controlling system and developing mutually developed legislation to establish
effective partnership.

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4.0 Reference List
Australian Dairy Industry., 2017. IUF Dairy Division- Australian Dairy Industry. [online]
Available at: http://www.iuf.org/sites/cms.iuf.org/files/Australian%20Dairy%20Industry
[Accessed 18 Sep. 2017].
Ayağ, Z., Samanlioglu, F. and Büyüközkan, G., 2013. A fuzzy QFD approach to determine
supply chain management strategies in the dairy industry. Journal of Intelligent Manufacturing,
24(6), pp.1111-1122.
Bilgen, B. and Çelebi, Y., 2013. Integrated production scheduling and distribution planning in
dairy supply chain by hybrid modelling. Annals of Operations Research, 211(1), pp.55-82.
Costa, C., Antonucci, F., Pallottino, F., Aguzzi, J., Sarriá, D. and Menesatti, P., 2013. A review
on agri-food supply chain traceability by means of RFID technology. Food and Bioprocess
Technology, 6(2), pp.353-366.
Dairyaustralia.com.au., 2017. Information on the production, sales, and trends for Australian
manufactured cheeses.. [online] Available at:
https://www.dairyaustralia.com.au/industry/production-and-sales/cheese [Accessed 18 Sep.
2017].
Fox, P.F. and Guinee, T.P., 2013. Cheese science and technology. Milk and dairy products in
human nutrition: production, composition and health, pp.357-389.
Glover, J.L., Champion, D., Daniels, K.J. and Dainty, A.J.D., 2014. An Institutional Theory
perspective on sustainable practices across the dairy supply chain. International Journal of
Production Economics, 152, pp.102-111.