Supply Chain of Cheese Production: Challenges and Solutions

This report provides a comprehensive analysis of the cheese production supply chain, focusing on the Australian dairy industry. It outlines the key stages, from milk production on dairy farms to processing, distribution, and ultimately, consumption. The report identifies the various stakeholders invo...Read More

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Supply chain of cheese production
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Supply Chain of Cheese in Dairy Industry
Australia is one of the best-known countries in the world for dairy farming. A dairy
industry, which started at a low rate in the 1978, has grown tremendously due to improved
technology and machinery (Nettle, Brightling & Hope 2013). Initially, fresh milk was the
only produced product from the Australian dairy firms. The demand has been shifting from
fresh milk to improved milk products like cheese, yogurt, butter, powder milk and many
others. This paper discusses supply chain for cheese which was once a high selling product,
but its sale has reduced. Cheese is a fresh or matured daily product that is obtained by
draining of whey after the coagulation of casein the major milk protein (Nettle, Brightling &
Hope 2013).
Supply Chain for Cheese
The supply chain for cheese production is between two actors that is milk producers
and the industries. Initially, before cheese production came up, whey used to be taken as a
waste and given to animal as a feed (Nettle, Brightling & Hope 2013). Today many industries
are using this whey as a material for cheese production. The supply chain starts within the
dairy farms, whereby milk from cows gets to the storage tanks available in the farm via pipes.
The introduction of this technology has helped farmers to save time in milking and thus
increasing productivity and efficiency. The milk is kept in the tanks that are regulated to
temperatures of not more than 40 degrees and should not also stay in the tanks for more than
48 hours (Nettle, Brightling & Hope 2013).
From the farm, tanker trucks pick up the tanks and transport them to the processing
industries. The milk has to be tested to be bacteria free and if it is well chilled. When these
two factors are tested and found satisfactory, the milk proceeds for processing. The milk then
undergoes acidification and coagulation to produce curds and whey that are cut into pieces,
salted and allowed to ripen. Ripening is the last before the packaging and finally the

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distribution to various market stores for sale (Nettle, Brightling & Hope 2013). Within this
supply chain, there are several stakeholders and members who have key roles in which they
play to ensure maximum productivity. The entire network entity of different stakeholders
should work either dependently or independently to ensure satisfaction of same consumers
(Gualarandris et al. 2015). The following is a list of stakeholders or members within a supply
chain and the role they play to ensure customer satisfaction (Gualarandris et al. 2015).
Stakeholder Role played
Vendors (dairy farmers). They supply the raw material needed; these are dairy farms.
Producers( Processors) They convert the raw material into final products. They carry
out the entire processing of the product.
Creditors They are able to lend loans to the farmers and the
manufacturing company, thus ensuring a swift flow of the
business.
Distribution centres They help deliver the product to the retailers, the product is
supplied to them, and now retailers can pick there at
wholesale prices.
Retailers They make product available to the final consumers at
various estate shops or even supermarkets
Consumers They are final users of the products, without consumers then
the whole chain is non-profitable.
The current supply chain for cheese production is efficient as it helps to ensure
maximum satisfaction to the final user. As from the chain, it is evident that the chain is not
only limited to the internal organization of the company, but also to external and even to the

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consumers. Feedbacks are able to be handed in from the consumers through the various
members and finally to the company, making it very effective.
Challenges, Strengths, and Threats for of the Supply Chain
The supply chain for the production of cheese just like any other daily product's
supply chain has a lot of challenges. First, there is a problem with legislative. Milk is a
product that is subject to temperature and cleanliness testing, and the conditions are
increasingly becoming tough from the legislatures (Yue et al. 2014). This makes the supply
chain be complex. Secondly, ensuring that the milk moves rapidly from the farms to the
processing companies is usually a complicated undertaking. This is because most of this
transportation is done by trucks which may then end delaying causing damage to milk which
usually has a high risk of spoilage and expiration. Thirdly, most farmers are usually affected
with low production during some seasons; this makes it hard for the production of cheese as it
strongly depends on milk as the raw material. Apart from these challenges, the supply chain
has some advantages. To mention few of them, the supply chain is able to optimise general
performance, minimise on wastes and costs, ensures effective visibility and transparency
(Yue et al. 2014).
Recommendations for Improvement of the Current Supply Chain
The current supply chain for cheese production is effective although there some
adjustments that have to be made to make it more efficient. The adjustments to be made on it
are important as they will help the supply chain give maximum satisfaction to the consumers.
Introduce mandatory pricing which will help enhance the transparency of the product price
from the company to the distributors and finally to consumers (Lyn & Tseng 2016). A forum
for communication has to be created which will help the company get feedbacks from the
final consumers of the products. Assessment needs to be incorporated in the chain to facilitate
any improvement that has to be made on the product (Lyn & Tseng 2016). The assessment

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will be done by an effective flow of information from the consumers, buyers, and sellers of
the products at different destinations of supply. Companies should also incorporate in their
supply chain an appropriate way of handling farmers and their supply. This will help ensure a
constant flow of the raw materials.
The advantages that are associated with supply chain can be leveraged to ensure
maximum productivity. For instance, the supply chain is able to effectively increase the
transparency and visibility in every sector. From the procurement to the processing and to
pricing will help facilitate smooth flow and satisfaction to the consumers (Yue et al. 2014).
Waste and losses are mostly experienced during production and even distribution, proper
supply chain and implementation of the above recommendations will help in reduction of the
losses.
Challenges that are faced by these supply chain has to be addressed as well; for
instance, insufficient supply of raw materials can be solved by the company engaging
themselves to support farmers. Companies should be able to facilitate loans to farmers and
proper education on the productivity of the raw materials. Transportation services for the
delivering of raw materials together with the final product have to be improved; this will
reduce the transportation cost and thus increasing the profit margin. Companies should be
well prepared to follow the legislative rules that are set for them. Failure to do this may lead
to the total closure of the companies and thus great loss (Yue et al. 2014).
The company needs to develop ways in which they can handle the threats. For
instance, threats that are associated with the supply chain for cheese are competitors and
single sourcing of some companies. Competition is real, and so every company has to work
to ensure that it produces a product that can stand out the competitors. Different suppliers
need to be engaged to help solve the shortage problems.

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Conclusion
A supply chain is an important tool in the production industries. It gives the direction
in which production has to take place, from the supply of the raw material to processing,
distribution and finally consumption by the consumers.

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List of References
Gualandris, J., Klassen, R.D., Vachon, S. and Kalchschmidt, M., 2015. Sustainable
evaluation and verification in supply chains: Aligning and leveraging accountability to
stakeholders. Journal of Operations Management, 38, pp.1-13.
Lin, Y.H., and Tseng, M.L., 2016. Assessing the competitive priorities within sustainable
supply chain management under uncertainty. Journal of Cleaner Production, 112, pp.2133-
2144.
Nettle, R., Brightling, P., and Hope, A., 2013. How program teams progress agricultural
innovation in the Australian dairy industry. The Journal of Agricultural Education and
Extension, 19(3), pp.271-290.
Yue, D., You, F. and Snyder, S.W., 2014. Biomass-to-bioenergy and biofuel supply chain
optimization: overview, key issues, and challenges. Computers & Chemical Engineering, 66,
pp.36-56.