Analysis of Logistics and Supply Chain Management in Australia

This report delves into the logistics and supply chain management of the Australian chocolate industry, focusing on Crest Chocolate's potential expansion. It begins by assessing the market size and key participants, highlighting the dominance of companies like Mondelez International and Mars Chocolate. The report then examines Crest Chocolate, an Australian exporter, and analyzes how it can adapt its supply chain for both online and offline marketing channels, particularly through Amazon. It explores manufacturing changes, demand forecasting mechanisms, and the advantages and disadvantages of using Amazon. The report provides a supply chain diagram and suggests technological improvements for efficiency, drawing on examples from other chocolate companies like Kraft Foods and Hershey. The analysis covers inbound and outbound logistics, social media utilization, and the implementation of technologies such as internet-based software and Flash view software to streamline the supply process. The report emphasizes the importance of adapting to an aging population and the need for advanced equipment to maintain productivity. Finally, the report also offers a comprehensive list of references.

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Logistics and Supply chain management
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1LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Market Size of retail chocolate in Australia
Chocolate is one of the most desired Confectioneries in Australia. Due to the high
demand for chocolates, the market size of chocolate in Australia is pretty high. Chocolate
consumption in Australia being 6.3 kg per capita, is considered to be one of the highest
consumption rates in Switzerland and United Kingdom (Minifie 2012). The chocolate factory of
Australia has grown by 4 percent in 2017. According to researchers, the high demand for
premium chocolates can be considered as one of the crucial reasons behind the growth of the
chocolate industry. It has been also found that health conscious consumers, instead of consuming
substitute low calorie Confectioneries, are indulging in chocolates that are of low calorie and
made from yoghurt. The yearly revenue of the chocolate industry in Australia in the year 2017 is
2,590 million dollars. Researchers stated that, within the year 2018 to 2021, the market size of
the mentioned industry will increase by 2.7 percent due to the high demand for the premium
chocolates (Davies and Kitchen 2015).
Chief participants of the Chocolate industry of Australia
The chocolate industry of Australia is highly dominated by the Mondelez International,
the founder of Cadbury. The mentioned company dominates the Australian Chocolate industry
with a market share of 55 percent (Minifie 2012). When it comes to market share, the Mars
Chocolate company stands in the second position with a market share of 18 percent of the
Australian chocolate industry. The Nestle Company has the market share of 14 percent and it is
one of the most popular chocolate companies in Australia. Other major participants of the
Australian chocolate industry include Kraft Foods, Ferrero Group, Lindt Company, Harshey
Food Corporation and Unilever Group Strauss Elite (Gallo, Antolin-Lopez and Montiel 2018).

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Description of an Australian Business that exports chocolates
Crest Chocolate company can be considered as one of the major exporters of chocolate in
Australia. The company chiefly manufactures, wholesale and exports premium chocolates in
overseas countries like Switzerland, United Kingdom and other European countries. Established
in the year 1950, the Crest Company is a local company of Brisbane and is a family owned and
operated company (Aung and Chang 2014). The Crest Company has gained huge popularity
across Australia, due to the high quality of the premium chocolate manufactured by it.
Will the supply chain for the newly expanded business need to be differentiated on the
basis of multiple sales channels?
Considering the fact that the Cardinale Company is planning to expand its market
through both online and offline marketing, the company needs to enhance its production as well
as supply chains in order to meet the demand of its potential consumers. The Cardinale family
should consider that being one of the largest online marketing media, that Amazon will introduce
Cardinale chocolate to a huge number of customers. Since the chocolate produced by the
cardinal family is of high quality, it is expected that the demand for the chocolate will rise
abruptly among the consumers (Jia et al. 2016).
Manufacturing changes for selling product through Amazon
Being a local company the Cardinale Company currently manufactures chocolates for local
consumers only. However, if the company expands its market through Amazon which is one of
the largest online platforms, it is expected that the demand for the premium chocolate made by
the company will increase to a large extent. Hence Cardinale Chocolates should enhance its
productivity by recruiting more and more staffs who will assist the family to make premium

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handmade chocolates. However, considering the fact that the current population of Australia is
an ageing population, it will be difficult for the company to enhance its productivity just by
recruiting employees (Bosona and Gebresenbet 2013). Hence, Cardinale Chocolates should also
invest in highly advanced chocolate producing and packaging equipment that will not only
reduce the manufacturing cost of the chocolate bur will also reduce the labour cost of the
company.
Mechanisms for forecasting future demands
In order to forecast the demand for its chocolates, the Cardinale Family should follow the bellow
mentioned mechanism:
Analysis of the both online as well as offline reviews
The company will be able to access is popularity by regularly tracking the review section of
Amazon online platform. The more will be the number of positive reviews, more popular is the
product. Besides that, the popularity of Cardinale Chocolates can also be assessed with the help
of the ratings provided by the consumers. When it comes to online marketing, the face to face
review and the enhancement in the demand of the chocolate can be considered as two of the
major indicators of Cardinale Chocolates (Jia et al. 2016).
Advantages and drawbacks of Amazon online platform from the perspective of supply
chain and logistics
Advantages

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1. Supply chain management: Since Amazon takes the responsibility of managing the
supply chain of the products, Cardinale Company will not have to invest time as well as
effort on planning the supply chain of their chocolates.
2. Outbound logistic expanse: The outbound logistic expanse of the cardinal company will
be less if they opt for selling their product through Amazon. From picking up the
products from Cardinale Chocolates to delivering it to the consumers, the process is
managed by Amazon.
3. Partnership Conflict: Since the company don’t have to deal with supply chain
management, Cardinale Company will be able to avoid conflict associated with the
supply chain.
Disadvantages
Chocolates will not be able to directly communicate with the end consumers and
therefore won’t be able to understand their specific requirement. This can be considered as a
major disadvantage of using online marketing platform.
The Big Box supply chain
The term Big Box is referred to the online marketing retailers who deal with a huge
number and variety of products and bring them together in a single platform. The Big box supply
chain is common "streamline" supply chain. Since the big box retailers deal with a huge number
of products, they recur a vast area to store the products. According to a recent survey, in the past
12months, more than 100 big box ware houses that comprise an area of approximately 60 million
square feet were bought (Aung and Chang 2014).
Supply chain Diagram of Cardinale Chocolates

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Raw materials like
Cocoa beans, milk and
sugar from local
suppliers
Usage of High tech
technologies for
preparing Chocolate
Packaging Chocolates
Online Marketing Offline marketing
Selling the product
abroad
For selling product
overseas, chocolates are
parcelled and shipped
directly to the
consumers.
Chocolates are delivered
to the shop though
trucks
The product is directly
sold to the end
consumers
The Amazon online
platform offers several
selling plans. The
company should select a
specific selling plan
offered by the mentioned
platform. (Dabbene,
Gay and Tortia 2014)
The company should
register in Amazon and
then lists the variety and
types of chocolates they
are offering to the online
consumers
The last step includes
shipping the products to
the end consumers
through the Amazon
online platform.

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Figure 1: (Supply chain diagram of Cardinale Chocolates)
Source (Created by author)
How should Cardinale Chocolates better use technology in order to make their supply
chain and logistics activities more efficient?
Cardinale Chocolate Company is planning to enhance their market through both online as
well as offline marketing. Along with that, the company is also planning to sell their product
overseas. In order to successfully market their product, the Cardinale Company should enhance
their inbound and outbound logistics along with their supply chain.
In order to enhance their supply chain, the company must invest in collecting high-quality
cocoa from the local farmers along with the cocoa beans produced by them. This is because a
greater amount of raw materials will be necessary to meet the demand of both the local as well as
the overseas consumer. For streamlining the supply chain, Cardinale Company should use social
media platforms (Bosona and Gebresenbet 2013). This will not only enhance the consumer base
of Cardinale chocolate but will also enhance the consumer base of the mentioned chocolate
company. In order to export their premium chocolate to overseas countries, the company can
invest in modern technologies like internet based software. This software will enable the
company to simplify their supply process by reducing shipping errors. The company can also use
the Flash view software to minimize to the digitally organized inventory data, monitor the supply
chain and track data.

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Technology that is used by other organizations to enhance operational efficiency
Chocolate organizations like Kraft foods, Mars and Hershey use technologies to enhance
their production and thus gain a competitive advantage in the chocolate market of Australia.
These technologies helped the company to enhance their revenue. One of the most popular
technologies used by the chocolate companies in Australia is the Conch. The mentioned
technology is used to evenly mix and distribute cocoa butter into the chocolate within a very
short period of time. Another popular technology in the chocolate industry of Australia is the
Pigging technology. This technology helps the companies to recover more than 99.5 percent of
their product that got wasted in the pipeline (Afoakwa 2016). Thus wastage of raw material can
be prevented using the technology.

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Reference List
Afoakwa, E.O., 2016. Chocolate science and technology. John Wiley & Sons.
Aung, M.M. and Chang, Y.S., 2014. Traceability in a food supply chain: Safety and quality
perspectives. Food control, 39, pp.172-184.
Bosona, T. and Gebresenbet, G., 2013. Food traceability as an integral part of logistics
management in food and agricultural supply chain. Food control, 33(1), pp.32-48.
Dabbene, F., Gay, P. and Tortia, C., 2014. Traceability issues in food supply chain management:
A review. Biosystems engineering, 120, pp.65-80.
Davies, T. and Kitchen, B., 2015. Confectionery: Growing and processing cocoa in
Australia. Food Australia, 67(5), pp.28.
Fredendall, L.D. and Hill, E., 2016. Basics of supply chain management. CRC Press.
Gallo, P.J., Antolin-Lopez, R. and Montiel, I., 2018. Associative Sustainable Business Models:
Cases in the bean-to-bar chocolate industry. Journal of Cleaner Production, 174, pp.905-916.
Jia, F., Wang, X., Mustafee, N. and Hao, L., 2016. Investigating the feasibility of supply chain-
centric business models in 3D chocolate printing: A simulation study. Technological Forecasting
and Social Change, 102, pp.202-213.
Minifie, B., 2012. Chocolate, cocoa and confectionery: science and technology. Springer
Science & Business Media.
Saltini, R. and Akkerman, R., 2012. Testing improvements in the chocolate traceability system:
Impact on product recalls and production efficiency. Food Control, 23(1), pp.221-226.

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