Logistics and Supply Chain Management

This report discusses the current transportation and storage practices of Super Food, a multinational manufacturer of chilled, frozen, and ambient food products. Recommendations are provided to improve cost savings and efficiency. Additionally, ways to raise capital for new product development, specifically in the vegan and vegetarian meals market, are explored.

Logistics and Supply
chain management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1. Current transportation and storage practices and recommendation to Super Food................2
2. Ways to raise capital for new product development...............................................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Operations, Logistics and Supply Chain Management is defined as an area of practice
that are being undertaken by an entity. It duly oversees all the important activities as well as
management functions that are being adopted by an organisation as to effectively manage
organisation's complex operations in a well defined manner (Banks and Stanton, 2016). All these
are essential tasks that allow an organisation to effectively manage their activities related to
manufacturing, production, procurement and transportation. Organisation with the
implementation of certain effective principles, can ensure high competitive advancements while
ensuring timely delivery of finished products to customers. Present report has been prepare on,
Super Food. Company operate its functioning as privately-owned multinational manufacturer of
chilled, frozen and ambient food products. In this report, formative discussion has been made on
current transportation and storage practices of organisation along with formative
recommendation with the help of which company can able to save their cost and can further
conduct their operations efficiency while ensuring competitive market share holding in
marketplace.
MAIN BODY
Super foods is private organisation. This is established in 1999 and having the headquarter in
Hong Kong. This is multinational manufacturer of frozen, chilled and ambient food products.
They have the manufacturing facilities in China, Poland, Brazil, USA and Thailand. The
business was established at all these business from the existing business operations of an
organisation. Different number of outlets are have by this organisation in 32 different nations.
This organisation is specialised in production of chilled and frozen ready meals. All these are
sold by the organisation under its brand name and on the name of its biggest customers. The
current range of product in which this organisation deals includes red meat, chicken and seafood.
The Ambient products of this organisation contains well known range of dried herbs and spices.
These are sold in the market in different sachets that can be taken at home for the purpose of
further use. All the manufacturing units of this organisation has the responsibility about taking
care of their own different processes like finances, human resources, logistics and operations
management. While talking about the packing materials then this organisation made the contracts
with local suppliers to provide the product in different market. The two different case studies are
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considered under this by organisation. In first one, focus is provided over reducing cost and
improvement of efficiency. The main aim behind this aspect is about attainment of competitive
position in market for the purpose retaining position in market. Second one is about raising funds
for market growth in vegan and vegetarian meals. They also want to build separate facilities for
the purpose of processing and manufacturing.
1. Current transportation and storage practices and recommendation to Super Food
Super Foods a privately owned multi-national manufacturer of chilled, ambient and
frozen food which offer different types of product range like seafood, red meat and chicken
recipes to customers. Mentioned below current storage and transportation practices is being
given in context with Super Food:
Transportation & Distribution
Food Carriers
It has been analysed that in carriers segment, Super Food use food loading tanks that are
dry, free of infestation, weatherproof and are effectively sealed as to duly prevent it from
rodents, insect and water. In addition to this, it has been identified that company currently
undertake use of food loading tanks that are constructed and designed in such a way that allow
complete drainage in order to duly prevent contamination.
Recommendation: In this, Super Food is being recommended to ensure temperature-controlled
container transshipments in order to set temperature of food as per according to their
requirement. In addition to this, all tankers those who deliver raw ingredients like flour are duly
cleaned in set period of time. In this company can effectively able to save unnecessary cost by
setting temperature for food as per according to requirement. With the help of this, company can
not only be able to save their cost but, also can able to increase efficiency that significantly lead
towards higher profitability and competitive advancements.
Raw material procurement and Storage
Stock Control and Rotation
In this segment, Super Food ensure that there is periodic stock reconciliation undertake
place at a set intervals. This is mainly done by company by making comparison of recorded and
actual stocks. In addition to this, company ensure that all stocks are checked in a regular basis as
to duly identify stocks those are expired, obsolete and retested materials.
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Recommendation: It has been recommended to Super Food to analyse main cause of stock
discrepancies and further implement well effectively CAPAs as to effectively prevent recurrence.
By undertaking use of CAPAs, organisation can maintain their cost and conduct all of the
activities in cost economical manner.
Quality Systems
It has been identified that Super Food involved in distribution and storage of raw material
in a well efficient manner. Company duly incorporates best storage practices, quality risk
management, good distribution and management review. With the help of all these measures,
company can conduct their operations by ensuring high profitability.
Recommendation: This is recommended to senior management of Super Food to make sure that a
well efficient quality system is being adopted, resourced and maintained. In addition to this,
entity must ensure that authorities, roles and responsibilities are implemented, communicated
and defined in a well defined manner (Mangan, Lalwani and Lalwani, 2016). Along with this, it
has been evaluated that GDP and GSP is being effectively adopted as well as managed in order
to ensure satisfactory arrangements. As far as food products is being concerned, it is
recommended to company to store, distribute and effectively handle products as to maintain
product quality as per according to government standards.
In addition to this, by undertaking use of cost effective strategies company can conduct
their functioning in a cost effectual manner. Transportation methods like different modes of
transportation, best warehousing services and consolidate shipments are some of the cost saving
methods with the help of which company can able to conduct their operations. While in terms
with procurement of raw material company by contacting to new suppliers can efficiently able
to ensure minimum material risk. This will help company to conduct their operations in
economical manner.
Thus, as per the above discussion it has been analysed that there are different types of
transportation and storage practices that are being undertaken by organisation as to duly operate
their organisational functioning (Christopher and Peck, 2012). With the help of some
recommended measures Super Food can effectively able to ensure cost efficient measure, as to
operate their functions while ensuring high competitive advantages in marketplace.
Currently this organisation is procuring their raw materials by using their own transportation
this levies the issue of excessive fixed and variable expenses. To undertake the procedure of this
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self transportation, organisation has to spend over all transporting equipment and separate staff
who can manage this process. To initiate the cost savings in this organisation, it is recommended
to procure the transportation services for outside organisation. This will provide a benefit of low
costs as no transportation equipment will be required to buy and no additional staff will be
required. For storage as well, this company is facing issues due to high competition in the
market. All the new organisations and long established companies are providing high level
competition to Super Foods. According to the company policies, every department is responsible
for its own transportation and storage but no department is allowed to source ingredients or raw
materials outside the organisation. This policy leads to chaos in management as one department
has to deal with various functions which can easily be outsourced. In order to rectify this issue, it
is recommended to Super Foods that they should outsource warehouses where they can store
their finished products and raw materials. This recommended solution will help the company to
save their expenses of warehouse rent and staff members who are solely responsible to manage
the warehousing system.
It is also recommended to the finance department of this company to analyse cost and other
expenses which will be levied on the company when they outsource the services of warehousing
and transportation. By this way both the costs can be compared and the proposal which is having
low costs can be selected. It is also recommended to this company, to hire multi-tasking
employees who are able to do multiple things at once, by this costs of additional staff will also be
saved.
2. Ways to raise capital for new product development
Super food is skiing to raise amount of capital for expanding their business in existing
marketplace. Company decide to expand their business by producing vegan and vegetarian
meals. As it will support them an organisation that will be beneficial for an organisation in
development of its growth and success in marketplace. Along with this, company wish to build
individual facilities for processing as well as manufacturing vegan and vegetarian products. In
order to manufacture and innovate these products, Super food require accurate amount of capital.
For this company need to searching best sources of fund. There are number of sources of fund
which are personal investment, Angels investors, Bank loans etc. These are consider best sources
of fund that would be beneficial for Super Food for processing and manufacturing vegetarian and
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vegan products. These sources will be explained as below in detailed manner along with their
benefits and drawbacks. These are:
Retained Profits: It is an approach in which some section of the income is retained
specifically with a means to fund future investment undertaken by the organisation. The profits
in this case are generally not paid to shareholders and are utilised for growth purposes. It is very
essential for a business to utilise the retained earnings in an appropriate manner as they are
recorded in the balance sheet of the company under “Shareholders equity”. It is the obligation of
the top management to make sure that such sources of funds are properly utilised as they are
shareholders money. Under this scenario, Superfood can use the retained earning to fund their
upcoming venture of product expansion.
Angel Investor: These are referred to individuals who invest heavy amount of funds in an
upcoming venture. These individual carry large sum of funds with themselves and are looking
for investment opportunities that may provide higher share of return. The average amount of
return which an angel investor expects is around 25%. It is the form of equity financing which
attempts to fill in the gap between the small-scale financing provided by family and friends and
venture capitalists
Bank loans: Banks are consider as a supermarket of debt funding and financing. They
give long term or short term funding, and they fund all asset, including real estate, equipments
and working capital. There are some advantages and disadvantages of bank loan which will be
beneficial for Super food in processing and manufacturing these products. One of the main
advantages of bank loan as it drives the growth which will be more essential for company in
expansion of its business. This source of fund will also provide capital for regular operations.
Along with this, interest on the borrowed amount maximise additional burden on the borrower.
Therefore above mentioned all these are main sources of fund but for Super food, bank
loan is one of the best and valuable source. There are certain advantages of bank loan which are
driver of growth, flexibility, purchase without liquidity, better interest rates, cash discount,
ownership remains with borrower etc. These are consider main advantages of using bank loan.
As it will support Super food in expansion of vegan and vegetarian products in existing
marketplace.
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Ansoff matrix
It refers to a marketing planning tool that describe a product and market growth in a
business. It is also known as a product development matrix that was invented by H. Igor
Ansoff . It includes four strategies such as product development, market development, market
penetration and diversification strategy that is used to grow the business and analyse the risk
associated with that strategy. This matrix helps the business to analyse the risk at make it
opportunity so that the company earn more profits and increase market share. Manager of
superfoods can used this matrix to analyse the growth of their business in future that are as
follows.
Market penetration- The main focus of this matrix is to increase the sales of current
product in existing market. In this strategy the main aim of business is to increase the market
share by selling their existing offering in the current market place. It is less risky because in this
product and market both are known for the organisation. This is used at different ways where
industry lowers the pricing of their goods, using various promotional methods like social media,
television, billboards etc. In context of superfoods, manager could use this strategy to increase its
market share by selling their existing product offering in the market. It will encourage the
initiative to increased the usage of the product. To increase the sales for their current goods firm
use various strategy like decreasing the price to attract more and more customers, encouraging
promotional activities, acquiring a rival firm in the same industry.
Market development- In this strategy firm target customers in new market with their
existing products. This strategy help in grow the market share in different and new market but
with the current offerings. In this matrix business expand in new geographical location,
consumer segments, regions etc. It is successful in some conditions like if the customers in a
new location is profitable, user behaviours are in the favour of the firm. Manager of superfoods
company could use this strategy when they expand their business in new geographical location.
For this company use various advertising methods to attract wide range of customers in a very
small time. This strategy is more risky than the market penetration matrix because in this firm
enters in the new market with its existing product and there is a fear of successfully operates a
business in the new area. This strategy can be use in several ways where superfoods operates
their business in new domestic market or enters into the foreign market. For this they needs lots
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of capital as well as they need to examine the culture and values of that country if they establish
their business at global level.
Product development: It is the effective strategy of expansion which includes
development of the new product in the existing market. The strength of this strategy is to
encourage a customers with new product that was launch by superfoods company i.e. vegan and
vegetarian meals. The main benefit associated with this strategy is about attraction of potential
customers towards the business activities and the usage of their existing brand image in effective
establishment and attraction of customers. It helps in increasing the market share, maximise
profits and increase growth of the firm.
Diversification: It is an effective growth strategy that helps an organisation in
development of its product and improvement of its market growth. For this strategy, company
become more able to produce new products and services in new market. As it will help an
organisation in development of its growth and success. In context of Super Food, diversification
is not a suitable and appropriate strategy for an organisation. Super food wise to processing and
manufacturing vegan and vegetarian products in existing market. As according to the case study,
diversification strategy of growth is not useful and appropriate. Along with this, such type of
strategy is not much appropriate for company in development of its products successfully in
existing marketplace. In addition to this, if Super food require to expand their business by
launching a new products and services in new market, diversification is most useful and valuable
strategy. As it support them in development of its products in marketplace and also support them
in its growth and success.
The new area where organisation wants to develop the product is vegan. This is so because
of the high demand of nutritional food in market. Health conscious people are exist are exist in
all over the world. Youth is much more focused in this direction. This will become the good
target segment that help to grab the market opportunities along with market share. This will also
help to improve the image along with attainment of competitive advantage in market against to
all the different players. This will improves the scope of the organisations food operations as
covers diversified nature of people reside in society along with belongs from the different age
category. The aim of sustainability will be achieved in easy and short period of time. So, it is the
perfect option for an organisation to adopt for expansion in market.
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CONCLUSION
As per the above mentioned report it has been concluded that, operations, logistics and
supply chain management acts as one of the most important element within an organisation that
are required to be consider by an organisation in order to ensure high profitability. Company by
taking use of temperature-controlled container transshipments, GDP and GSP can operate
their functioning in signifiant manner. In order to overcome pressure, it is essential for an
organisation to reduce their cost and increase efficiency in order to conduct operations of
organisation in a well defined manner. Further there are different types of strategies and policies
with the help of which organisation can save their cost. With the help of this, company can
significantly able to ensure high profitability and productivity.
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REFERENCES
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Mangan, J., Lalwani, C. and Lalwani, C. L., 2016. Global logistics and supply chain
management. John Wiley & Sons.
Rebolledo-Mendez, G. and et. al., 2014. Developing a body sensor network to detect emotions
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