Supply Chain Management: Arnott’s Biscuit

This assignment deals with the logistics and supply chain management in Arnott’s Biscuit company, covering their products, major customers, and management style. It emphasizes on their supply chain management, distribution channels, and suggestions for enhancing success.

RUNNING HEAD: SUPPLY CHAIN MANAGEMENT 0
Supply Chain Management : Arnott’s Biscuit

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Executive summary
This assignment deal with the company named Arnott’s biscuit, which is very popular
among the food industry. This assignment will be going to give an understanding of logistics
and supply chain management in Arnott’s biscuit company. This report covers the products in
which Arnott’s company deals, their major customers, management style they follow while
working in the industry. This will more emphasis on the supply chain management of the
Arnott biscuit company, how they deal with the different channels of distribution to achieve
success in the organization. Various suggestions are been for the company just to enhance
their success in the industry in respect of their demand and inventory management.
Table of Contents

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Introduction................................................................................................................................3
Supply chain structure................................................................................................................4
Distribution chain of the Arnott's biscuits:.............................................................................4
Producing goods and services:...............................................................................................6
Improvements.........................................................................................................................9
The distribution system of the company to identified customer............................................9
Improvements.......................................................................................................................12
Inventory management.........................................................................................................13
Demand management...........................................................................................................13
Module for inventory management......................................................................................14
Improvements.......................................................................................................................15
Conclusion................................................................................................................................15
Bibliography.............................................................................................................................17

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Introduction
This report focuses on a company named Arnott’s Biscuits Limited. This company is
the largest food producers worldwide. In this assignment, Arnott’s Biscuits supply chain
structure will be going to explain, sourcing material and services, major customers of the
company, their demand management, and inventory system, and various suggestion regarding
their work just to achieve more success in this competitive world.
Arnott's is the topmost grocery umbrella brands in Australia and assertions some of
the largest brands in the country. Arnott’s biscuits are the organization that deals in producing
the snacks and biscuits in the Australian marketplace since 1865. This was started with the
small bakery which was unlocked in Hunter-street, north of Sydney as well as Newcastle and
New South Wales. This company helps the local market people in providing the biscuits,
bread as well as pies. Arnott’s is a well-known recognized brand by Australian people in
Australia (Arnott's, 2019).
From 150 years, Arnott’s has been dealing with quality value into biscuits, and
snacks. They have various qualities in biscuits too like sweet or savory biscuits, chocolate or
fruity biscuits, Crispbread, shapes, and TimTam (Arnott's, 2019).
Arnott's attracted new customers in the market. Arnott’s gain success in achieving the
target to 1 million households to its Vita-West base. Arnott’s focus on the people who are of
an age group that varies from the customers from 12 to 42 years. Income contains customer
with a monthly salary of $ 3500.the industry targets Brazilian food market that possesses the
significant competitor. Arnott's biscuit is a wholly owned subsidiary company employing
5200 employees in the year 2014 with revenue of $1 billion (Harris, 2014). This assignment
will focus on the supply chain of the product.

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Supply chain structure
Distribution chain of the Arnott's biscuits:
(Source: By Author)
One of the elements of the market mix is physical distribution. In this, a set of
organizations or the organization combine together to form the product and make available to
the consumers or the end users.
The distribution channel:
The process when a product is passed from various stages in the chain and finally
reaches to the end users, this is called a distribution chain (Distributors, 2019).
There are various channels of Arnott’s biscuit like:
Suppliers
Distributors
Wholesalers Retailers
(urban/rural)
Wholesalers
Retailers
(rural)
C O N S U M E R S

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Distributors who sell to the retailers; and,
Retailer (also called dealer or reseller), who sells to end customer.
Intensive distribution:
This system has an ideal strategy and helps the Arnott’s biscuits as it helps in giving
them various advantages:
Increase in the coverage sale;
Increases product availability; and,
Retailers can compete aggressively. High competition leads to lower margins to the
retailers and overall it results in the ultimate margin to the manufacturer (Economic Times,
2019).
Companies transport organization system safeguards its distribution systems operate
professionally with high visibility to the industry. Company’s distribution capability offers:
High range of security;
Managing the inventory;
Vessel stuffing and de-stuffing;
Warehousing and direction fulfillment;
Online delivery system directly to consumers;
Port & rail links for consignments;
Complying facilities as part of our e-commerce ability; and,

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Local conveyance from cross-country point-to-indicate through course conveyance to
singular stores.
Our group of very prepared coordination’s specialists will enhance the conveyance
and can work as an incorporated administration or an independent activity. Regardless of
whether it is solidifying the stock or guaranteeing to meet the most secure of conveyance
windows, we can modify a coordination answer to suit the business entities (Ebonysm, 2011).
Producing goods and services:
The company to produce goods in the organization follows a specific procedure.
Taking ingredients- All the materials are taken to the bakery which includes the eggs, butter,
etc. after that all the ingredients are taken into the warehouse just to store them and
refrigerator until needed
All the ingredient are tested in the test center just to test that products, cope up with
the standards after that checked ingredient are brought and mixed up in the machinery. The
mixing machine consists of a cake mixer, drum, and vertical spindle (Arnott's, 2019).
The batter is blended for mixing, the blend is roll in a trough, to be left to rolled. This
strategy contains functioning the hitter to make small pieces. Each piece has a substitute
width to suit each bread, generally speaking, a meter wide, carried on a vehicle line to the
cutting mechanism.
Cutters-the hitter piece goes under a four-sided of cutting shapes which stamp 20 or
30 bread rolls each mix with a structure. The cutters size and shape modifications for each
roll. The remains of the piece of hitter come back to the blend sheeter to be stimulated for the
accompanying group. The annihilation press is used for the rougher mixture, ousting the
hitter on the conveyance line in a long dimension trim which is cut into dimensions.

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Making the bread rolls progressed into a level steel band or wire work conveyance,
which will be completed, to the broilers. It is moving through the extended way stove
(typically 60-90 meters) and prepared as they move. The temperature varies for various
different our roles. By regulatory the speed and temperatures, unspoiled preparing conditions
can be set for very rather roll. Some of the time the roll might be nourished in the ice-covered
yogurt machine where cream or jam is kept (Arnott's, 2019).
Hardware
a) Wheat & flour-25 ton trucks convey the fixings to a 50-ton storehouse. The blower is
utilized for blowing the blend of air and flour finished a 100 mm breadth aluminum blowing
lines. The air is gone over the channels back to the environment.
b) Sugar-25 ton trucks convey ground white sugar to be precisely exchanged to a 40-ton
storehouse, which utilizes screw transports and a container lift.
c) Vegetable oil-20-25 ton trucks convey the fixing to be siphoned away tanks. It is then
alleged 50'C previously handled in limitation.
d) Water-put away in containers at 4'C, 18'C, and 80'C. Temperature changes relying upon
the formula different fixings are conveyed in fixed compartments, which might be a harden
drum, plastic water/air proof containers, cardboard boxes, and hardened steel pals.
e) Blending a program basis controller (PLC) displays and controls the proportion of
discharge from the improper of the storage facilities into the weighs to be stimulated into
compartments over the mixers. Liquids are assessed in mass stream volumetric meters.
Humbler measures of constituents are incorporated at the front of the mixers (Arnott's, 2019).

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f) Mixing machines-1-kW drive two-speed electric engines. They take around 20 minutes to
mix a gigantic measure of the blend. Then it is tested for the temperature and constancy. The
blend is rolled into a holder over two or three disagreeable rolls. The 35m thick pieces then
roll along. It is then movers to the shaper which give the shape to the product.
Chilling and control quality -the readied bread moves to leave the stove to endure to
the vehicle. They unruffled to accomplish the superiority control fragment to safeguard that
the moves of each sort facilitate one additional.
Irresistible the bread rolls are bound by a programmed bundling device. Diverse
pushing incorporates:
I. Move pack-they are consequently sustained and kept running at rapidity of 80 packs for
each moment
II. Cushion pack-utilizing a flexible plate, just about 300 packets for each moment
III. Pocket pack-cartooning engine with a pocket in a crate. It can keep running at 120
packets for every moment after that for examination and speak back to the general
supervisors on excellence and presence. Conveyance containers are relocated to the
stockroom (Arnott's, 2019).
Improvements
Distribution is the physical distribution of the goods to the end customers. There are
various types of methods which can be used by the Arnott's company in their production
process. The various conventional matrix should be used by the company to improve its
performance. One of them is rolled throughput yield (YRT) six sigma. The company should
decrease the scrap by taking in care of the DMAIC method. In this willpower of CTQ from

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the consumers and developments are made rendering to the process stage by upgrading living
countermeasures in stages, giving training for caster section, and heating rings in the oven.
From these functions, there will a result of a decrease in the value of scrap from 99.000 to
50.000 DPMO and increase the value of stigma from 2.86 to 3.2. (Six Stigma, 2015).
The distribution process could be simple or complex and be involving the few,
multiples and stakeholders. There could be various types of distributors, retailers as well as
value added retailers and wholesalers. Millions of the Arnott products are delivered to the
consumers per day which simply give the result that stock out could not be permitted. In this
case, the district-tributes should be direct just to reduce the cost and mitigate the risk
associated with this. To maintain an emphasis on consumers, Arnott’s should concern
retailers not only as a customer with the distribution and marketing partner (DANIEL, 2015).
The distribution system of the company to identified customer
The organization strength is in the procurement of the raw material for their
production rather than the distribution of its factors. Even though Arnott biscuit is a leading
organization but distribution; logistic is the industry main problem. While in some cases, the
company fails to complete the demand due to the lack of procurement of the raw material but
the Arnott's biscuits inventory management is sound (Walters, 2017).
Arnott’s biscuit company has a full range of consumers like:
Superstores including Coles, Woolworths, Aldi, IGA and Foodworks;
• Wholesalers including Metcash;
• Foodservice consumers including Bidvest; and,
• Accessibility shops including petrol stations.

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Arnott biscuit company has a loyal cooperative that provides the products only to
them which has generated a good relationship of trust with these peoples. The distributions
another strong point of the company. As these distributors grown the company success and
have a good relationship with them, this bond enables the company to give the least margins
to the distributors, retailers in the industry.
Arnott biscuits are able to price least products in the industry and able to give the least
margin as the channel members earned from the volumes rather than high margins.
Transportation helps in determining the efficiency of moving the product effectively
to various consumers (Duncan, 2009).
The process in methods and management values increases the delivery speed, portion
costs, the usage of services and energy system.
Conveyance plays a significant role in the success of the industry.
Transportation functionality:
1. Product movement
2. Product storage
Warehousing activities help the company to store their product and make available
whenever needed.
Arnott store is the place where the supply chain holds the stock goods, whereas the
function of the warehouse system includes:
Conveyance consolidation;
Product involvement;

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Docking;
Service; and,
Protect against eventualities.
The activities of the stockroom which help the company in achieving the success:
(Linfox, 2019)
Receiving the products;
Identify the products;
Dispatch products to packing;
Holds products;
Choice products; and,
Activate an info system
Arnott biscuit money facilities are a little package with huge effect. With their
Distribution and Warehouse Network Services, the company manages its supply chain with
combined pool distribution, warehousing, and transportation. Their warehouse facilities
securely provide custom integrates conveyance results. Stockroom integrate a blend of
worked to-suit, devoted and multi-client storerooms. Short-term and long-term options as
well as customized results from the deal of companies’ Warehouse and Distribution Network
Services. Their customers also get benefits from a co-op supply scheme that uses shared
methods to extremely minimize the transportation costs and the savings are distributed
straight to the customers (Oracle, 2007).

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Improvements
1. Set up a vendor compliance program
If an organization is having a vendor obedience program then it is a very real way to
improve the strategic relationship among corporate, 3PL warehouse, its sellers and
distribution workers.
Incorporating regular item recognizable proof and following procedures the whole
distance upstream to seaward or local sellers will help guarantee appropriate permeability and
consistent development of item through the production network (Shopify, 2018).
2. Record every movement as a transaction
A person should be optimized. Some steps in the procedure that could not be recorded
as an operation either is a needless stage that must be reduced or stage which should be
connected to fix it list. When activities originate, which are not in the stages of the procedure
then they should be reported.
3. Minimizes touches
Picking legitimately to a delivery container rather than a halfway canister or tote is
only one case of dispensing with pointless strides in the conveyance focus process. At the
point when unnecessary advances are dispensed with, the procedure turns out to be quicker
and progressively streamlined, client relations take off, and primary concerns improve.
Seeing approaches to improve your stockroom frameworks is a significant advance to cutting
expenses in the distribution focus (Melaine, 2018).

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Inventory management
Arnott has implanted an oracle retail platform incorporation back office into the
business to enhance the inventory management system. Arnott has implemented this
approach from the business led rather than IT-led. Redesigning any business is an
unpredictable action and an office store with a huge number of items more than 300,000
square feet is no special case (Melaine, 2018). The usage of a £4.7million Oracle Retail stage
is practically finished and Arnotts rushes to affirm that finishing this undertaking in minimal
more than two years has been achieved fundamentally in view of its business-drove way to
deal with change the executives as opposed to adopting an IT-drove strategy (Rockwell
Automation, 2018).
Demand management
As Arnott is one of the largest food company it currently employs something 2200
people in Australia plus several thousand people globally. In their manufacturing plant in
Adelaide, Arnott’s yields about 10,000 tonnes of biscuits yearly. To cope up with growing
worldwide buyer demand, Arnott’s freshly boarded on Project FLEX — a regulator and HMI
structure upgrading to bring enlarged suppleness and quickness for biscuit invention.
With the expansion and increased demand, it is necessary for the company to meet the
demand a managed it efficiently (Scada, 2008).
The principal phase of the undertaking included refreshing the heritage stove
transport's PLC equipment to improve the manner in which that administrator could stack
new creation orders, including a component that enables various formulas to be put away,
chose and delivered on a similar line. It additionally included the establishment of two new

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chilling frameworks for transports as well as reconstructing of the regulatory framework and
HMI.
The control framework overhaul obligatory the relocation of heritage SLC supervisors
to Allen-Bradley Control Logix to benefit lessen upkeep charges and take into account
expanded adaptability on generation lines. While defending the hazard and cost of control
framework updates may at first appear to be a test, putting resources into present day
advancements that influence the Industrial Internet of Things enables makers to understand
the advantages of shrewd assembling (Food processing, 2018).
Module for inventory management
The decision support system is the tools for inventory management by transforming
the inputs to the outputs.
Companies always try to maintain a balance between the holding inventory, loss of
gods, which is very hard to manage. Redesigning any business is an unpredictable action and
an office store with a huge number of items more than 300,000 square feet is no special case.
The usage of a £4.7million Oracle Retail stage is practically finished and Arnott's rushes to
affirm that finishing this undertaking in minimal more than two years has been achieved
fundamentally in view of its business-drove way to deal with change the executives as
opposed to adopting an IT-drove strategy (Cecila, 20121).
Improvements
The company should use various type of model to manage its demand as well as
inventory on the organization.

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ABC classification which assigns the priderite which will overall help in eliminating
the misrepresentation. EOQ, economic order should be used which help in identifying the
order frequency which will help in demand management.
Strengthen supplier relationship
Maintaining a good relationship with the suppliers helps in maintaining demand. By
guaranteeing that when increasingly stock might be required because of regular impacts or up
and coming deals, the purposes behind holding stock in bigger amount can be gotten ready
for and assembling can be changed in accordance with meet supply. This makes a
progressively effective production network and assembling process, diminishing expenses in
squandered stock and extra room for both the maker and provider. Being capable foresee and
reliably fulfill a client's needs for items reinforces the relationship and gives makers an edge
over their rivals
Conclusion
From the above analysis, it can be understood that the Arnott's biscuit company is one
of the most famous company globally in the food sector. This assignment well explained
about the there strategies and various suggestion are given on the basis which one can gain
success in their demand forecasting, distribution system, etc. It is noticed that the company
target children age group for their products. It is for this reason the company manufactures
various varieties of healthy and tasty biscuits for their target group. In the later section,
various improvements suggestion is given to the organization just to deal with the distribution
channels in order to minimize the cot and effectively reached their products until the
customers.

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Various models are also been explained which can be taken care of while performing
their work. It is very necessary for the company to opt for the best option in order to fulfill
the goal of getting success globally. It is advised to top the company to use various social
networking site to get more popular as this is a very effective step in getting a huge success
globally. Various types of market research should be conducted by the company to know the
need of the people as peoples are very much health conscious nowadays.
Bibliography

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Arnott's. (2019). About Arnott. Retrieved from www.arnotts.com:
https://www.arnotts.com/about-arnotts/
Arnott's. (2019). Food Processing and Mnaufacturing: Arnott's. Retrieved from
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Arnott's. (2019). our products. Retrieved from www.arnotts.com:
https://www.arnotts.com/products/
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https://www.researchgate.net/publication/268386015_A_framework_for_decision_su
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DANIEL, L. (2015, March 5). The Value-Added Distributor: Present and Future. Retrieved
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distributor-present-future/
Distributors. (2019). All Products by Arnotts Biscuits Ltd. Retrieved from www.the-
distributors.com.au: https://www.the-distributors.com.au/products?b=ARNOTTS
%252520BISCUITS%252520LTD&s=2
Duncan. (2009). Principles Of Advertising And Imc. Tata McGraw-Hill Education.
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https://ebonysmusic.wordpress.com/category/food/arnotts-biscuits/

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Economic Times. (2019). Definition of 'Intensive Distribution'. Retrieved from
economictimes.indiatimes.com:
https://economictimes.indiatimes.com/definition/intensive-distribution
Food processing. (2018, June 12). Baking biscuits better. Retrieved from
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https://www.foodprocessing.com.au/content/processing/article/baking-biscuits-better-
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Harris, J. (2014, January 17). Arnott's Biscuits. Retrieved from /prezi.com:
https://prezi.com/vcojoppyultb/arnotts-biscuits/
Linfox. (2019). Distribution. Retrieved from www.linfox.com:
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inventory-control-demand-forecasting
Oracle. (2007, December). Arnotts drives business expansion with people. Retrieved from
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Rockwell Automation. (2018). conic Australian Biscuit Manufacturer Upgrades Adelaide
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https://www.rockwellautomation.com/global/news/case-studies/detail.page?
pagetitle=Iconic-Australian-Biscuit-Manufacturer-Upgrades-Adelaide-Production-
Plant-%7C-Case-
Study&content_type=casestudy&docid=88831c72822f0cf5d9d323a5c359e499

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Scada. (2008). Arnott’s Biscuits. Retrieved from www.ctiresources.com.my:
http://www.ctiresources.com.my/wp-content/uploads/downloads/2012/10/Arnotts-LR1.pdf
Shopify. (2018, Februray 17). 3PL (Third Party Logistics): Everything You Need to Find the
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throughput-yield.html
Walters, D. (2017). Planning the Distribution System: an operational approach.
INTERNATIONAL JOURNAL OF PHYSICAL DISTRIBUTION.

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