New Zealand Sustainable Dairy Farm Assignment Essay
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Added on 2020-05-28
New Zealand Sustainable Dairy Farm Assignment Essay
Added on 2020-05-28
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Running head: SUSTAINABILITY IN A DAIRY COMPANY IN NEW ZEALANDSustainability in a Dairy Company in New ZealandName of the Student:Name of the University:Author Note:
1SUSTAINABILITY IN A DAIRY COMPANY IN NEW ZEALANDTask one:1. Company vision:The vision of Fonterra Group Co-operative Group Limited is to provide itscustomers all round the globe with high quality dairy products. The environmentalanalysis of the cooperative organisation shows that it faces sustainability challenges. Thefirm has introduced sustainable methods of waste management but is still under the pressureto reduce its carbon output in the environment (fonterra.com, 2017). 2. Choice approach:Fonterra can adopt lean management as the chosen approach to gain higher degree ofsustainability. The firm can use lean management and streamline the decision making processto take quick decisions on business operations. The cooperative can empower the middlelevel managers to take decisions to take advantage of market opportunities which wouldenable the firm more profit. Thus, application of lean management would make the firmfinancially more sustainable.3. Justification of choosing lean management approach at Fonterra:The adoption of lean management at Fonterra would enable the cooperative to gainsustainability in several forms which justifies the adoption of the approach at the cooperative.The apex management of Fonterra should adopt lean management which means, they wouldrequire empowering and training the middle level managers to take business decisions. Themiddle and lower level managers are more in direct contact with customers and are in betterposition to understand profit opportunities. Hence, adopting lean management would enablethese mangers to take quick decisions to take advantage of market opportunities which would
2SUSTAINABILITY IN A DAIRY COMPANY IN NEW ZEALANDenable the firm to earn more profit. This would enable the firm to gain financial sustainabilityand become more profitable. Secondly, these mangers would be able to take prompt decisionsto deal with recycling of waste and low grade materials to direct them towards furtherproduction. Thus, this would enable the firm to manage wastes more efficiently and gainsustainability. Moreover, recycling wastes to produce energy would enable the firm to reduceits energy expenditure and become energy efficient. Thus, it can be justified that adoption oflean management as the chosen approach would enable the firm to become more sustainableand energy efficient.4. Recommendations:The following are the high level recommendations can one can make to the organisationregarding optimising its operations to tackle this pressure of sustainability and achieving itsvision with:Recommendation 1: Integrate local farmers in obtaining sustainability:Fonterra must integrate farmers in not only producing milk but also ensuringsustainability. The previous discussion shows that the cooperative suffers from environmentalissues like emission of greenhouse gases and unsustainable waste management practices. Thefirm must train the farmers to manage the cows in more scientific ways which will minimisethe emission of the greenhouse gases (Clark et al., 2016). The cooperative can aim to set upgreenhouse gas plants which would utilise the gases released from managing the cows. Thecooperative can utilise this energy from its own greenhouse plants to meet a portion of itsenergy requirements. Moreover, the cooperative should allocate funds to set up windmillswhich would again generate energy for its use (Vanlauwe et al., 2015). Fonterra as a resultcan use this strategy in the long run to produce its own energy and reduce its operationexpenditures, thus becoming economically sustainable.
3SUSTAINABILITY IN A DAIRY COMPANY IN NEW ZEALANDRecommendation 2: More aggressive global expansion:The cooperative should aim in the long run to expand its global presence. An analysisof the global markets of some of the top competitors of Fonterra like Nestle points out thatthese companies have presence in more than a hundred countries. Fonterra in comparison tocompetitors like Nestle is present in Oceania, a small part of Asia and some parts of SouthAmerica (nestle.com.au, 2017). The company has weak or no presence in the profitablemarkets of Europe and North America. The management of Fonterra should consider of moreexpansive global expansion in the long run (fonterra.com, 2017). This will enable thecooperative to diversify its risks and losses over a huge market that will earn it financialsustainability.Recommendation 3: Expand its product cycle:The next strategy which the apex management of Fonterra can take to gainsustainability and optimise its operations is expanding its product cycle. The cooperative,according to the first strategy should gain environmental sustainability, should installgreenhouse gas treatment plants and windmills to curb use of non-renewable sources ofenergy (Sattari, et al., 2014). This installation of windmill would require immense investmentwhich requires the cooperative to expand its revenue base. Fonterra should expand its productline into other food products like noodles and chocolate bars. This will allow the cooperativeto earn higher revenue and support its long term vision to gain sustainability by selling itsnew products to a huge base of customers. Moreover, the third recommended strategy ofexpanding into new markets would allow Fonterra to sell its existing and new products innew customer bases and generate more revenue (Styles et al., 2015).Recommendation 4: Total Quality Management:The apex management of Fonterra should emphasis on aligning manufacturing ofproducts with the expectations of the customers to achieve total quality management. The
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