Report: Evaluating Supply Chain Management for Kellogg's (BUS 400)

This report provides a comprehensive analysis of Kellogg's supply chain management. It begins with an introduction to supply chain concepts, principles, and processes, illustrating their application throughout the various stages of the supply chain. The report then evaluates how the integration of these concepts enhances organizational efficiency, focusing on logistics management, distribution channels, and value chain analysis. The importance of supply chain management is assessed from the perspectives of customers, suppliers, distributors, and retailers. The report further examines the significance of physical, financial, and information flow management, alongside the evaluation of cross-functional and integrated approaches to supply chain management. Finally, the report evaluates Kellogg's current supply chain strategy and proposes recommendations for improvement, justifying these suggestions based on the analysis of the company's operational processes. The report concludes with a summary of the key findings and recommendations.

Supply Chain Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Demonstrate how the concept of supply chain concepts, principles and processes that are
applied through out the stages of the supply chain management................................................3
Evaluate how integration of supply chain concepts, principles and processes improves
efficiency of the organisation......................................................................................................6
TASK 2............................................................................................................................................7
Evaluate the importance of SCM from perspective of customers, suppliers, distributors and
retailers........................................................................................................................................7
Critically Evaluate the importance of physical, financial and information flow management...8
TASK 3............................................................................................................................................8
Evaluation of cross functional and integrated approach of SCM with other areas of an
organisation.................................................................................................................................8
Examine the implications of interrelationship between supply chain and other functional areas
.....................................................................................................................................................9
Critically evaluate the supply chain concepts, principles and processes and their interrelation
with other areas of the organisation..........................................................................................10
TASK 4..........................................................................................................................................10
Evaluate a supply chain strategy and the proposal for improvement........................................10
Justify and recommend improvements of a supply chain strategy...........................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Supply chain refers to the network between the organisation and the suppliers that
provides various material which is used by them in the process of manufacturing. Also the
distributors of the organisation are also part of the supply chain. The supply chain need to be
maintained effectively by the companies as it helps to manage the cost and facilitate them to be
competitive by improving their production cycle. Effectiveness in the supply chain process helps
the companies to ensure availability of material on the right time (Abner, Setyawan and Sin,
2018). The organisation which is taken into consideration for this report is Kellogg's which is an
American manufacturer of cereals and convenience food. It is a multinational company which is
operating in more than 180 countries with a wide range of cereal products. In this report various
supply chain concepts, principles, processes are discussed for the organisation. Along with this
importance of effectiveness of supply chain and cross functional approach are considered in the
report. Further the recommendation are made to the company which will help them to improve
the entire supply chain process.
TASK 1
Demonstrate how the concept of supply chain concepts, principles and processes that are applied
through out the stages of the supply chain management
The supply chain is the process with the help of which the company ensures the
availability of the right amount of goods to the production department. This will help them to
provide the final goods to the customers by manufacturing it efficiently (Almeida Marodin and
Saurin, 2015). In the process of the supply chain the various elements are included such as
people, informations, activities, resources etc. For developing an understanding of supply chain
various concepts need to be considered by Kellogg's which are given below:
 Logistic management: Logistic management is a crucial part of the supply chain
management which helps them in efficient planning so that they can fulfil the demand of
the customers. It facilitate the organisation in planning, implementing and controlling the
flow of goods, services and information and their storage. It includes their management
of the resources between the point of origin to the point of consumption with the aim to
meet up with the requirement of the customers. The logistic services can either be
performed by the organisation itself it can be outsourced to the service providers. The

Kellogg's have their own logistic management system which help them to effectively
supply all of their material.
 Distributional channel: The distribution channel of the Kellogg's supports the
movement of the goods and services to the final user. Their can be various channel of
distribution which depends upon the organisation such as the channel can be direct that is
the company directly provides foods to the consumers (Borodin, and et. al., 2016). Also
the traditional method of various intermediaries can be followed by them which includes
various wholesalers, retailers etc. With the innovation, the processes of distribution
channels of Kellogg's are improved as the wholesalers and the retailers uses flexible
omnichannel capabilities which will help them to satisfy their customers from their
stores, production locations etc.
 Value chain: The value chain is the concept which facilitate the organisation to
undertake the competitive analysis and to formulate various strategies. This model
includes various primary and supportive activities with the help of which the Kellogg's
analyse their processes and identify the requirement of the changes in their processes.
Such analysis helps them to improves their profit margin as all the flaws in the process
are identified and resolved. With the help of value chain, the activities and the flow are
integrated which enables the Kellogg's to achieve the efficiency in the flow of goods and
services.
For making the supply chain effective the process of supply chain need to be followed by
Kellogg's that has various steps such as:
 Plan: In planning step of supply chain process, various plans are formulated by the
organisation for the products and services so offered by them. In this step the Kellogg's
identifies various attributes such as the location, size, plant etc. This step of the process
helps in resourcing stage of the supply chain as they identify all the resources while
formulating plan (Christopher, 2016). Apart from this, the cost associated with the
business such as transportation cost, cost of modelling etc. are identified. Also they
identifies various efficiency model which can be used by them fir managing the inventory
etc.
 Source: In this step of the supply chain process, various suppliers are identified and out
of them the most reliable one is determined who can supply the right quantity and better

quality of the material. It will make the distribution channel of the Kellogg's strong as
they will identify all the reliable suppliers who can supply even in the case when the
supply gets disturbed.
 Execute: In this step of supply chain process, the manufacturing process is undertaken by
Kellogg's which helps them to satisfy the customers as the products are developed as per
their needs and wants. Kellogg's schedule all their activities which leads to completion of
the activities on time. Along with this the designing of the products and services are done
on this step.
 Deliver: This step is associated with the delivery of the final product to the end user
which can be done through an effective distribution channel (Dubey, Gunasekaran and
Papadopoulos, 2017). Kellogg's has an effective distribution and logistic channels which
ensures the availability of the products and services to the end users.
 Return: This is the final stage of the supply chain process in which the defective goods
are returned backed to the manufacturer by way of distributors and retailers.
The supply chain facilitates procurement of the material on the right time for the
organisation. Various principles of supply chain need to be followed by the organisation that
helps them to manage it effectively. The seven principle that are to be followed by the Kellogg's
are:
 Adapt supply chain to customer's need: As per this principle the market is divided
into various segments which will help them to understand the target market and on the
basis of which they can formulate the plans. This will make Kellogg's to distribute the
finished goods effectively as they understand the need to of the customers well.
 Customise logistics network: As per this principle the network of the logistic need to
be customised by the companies which will maker their services customer centric. This
improves the decision-making f the company as it will directly have impact on the
profitability of the company.
 Align demand planning across supply chain: With the help of this principle the
company plans for the quantity of the goods and services as per their demand in the
market. This will ensure availability of the right product in the right quality in the
stores of the Kellogg's.

 Differentiate products close to customers: The product which are offered by the
organisations need to be differentiated with that of the other products (Fredendall, and
Hill, 2016). This can be done by making them unique in terms of designs, and
development.
 Outsources strategically: This principle is applicable on the distribution and the
logistics which can be outsourced with the aim of improving their process as it will
lead to reduction in the cost for the company.
 Develop IT that support multi-level decision-making: This principle suggest the use
of IT enabled process such as use of common software at the stores, with the
distributors , manufactures and the retailers. This will help them to manage the
inventory of the company effectively.
 Adapt both services and financial metrics: In this principle, the activity based
costing can be applied by the Kellogg's which will help them to analyse their
processes, the profitability of the customers etc.
All these process, principles and concepts of supply chain will help Kellogg's to plan for
various stages such as resourcing, logistic and distribution, product designs and development etc.
All of these provides various techniques and steps which are to be followed such as just-in-time,
total quality management, six sigma and many more. They ensure timely delivery of the product
and services of the company and also reduces the cost of operations.
Evaluate how integration of supply chain concepts, principles and processes improves efficiency
of the organisation
With the use of various supply chain concepts the organisation effectively determine the
activities which they have to undertake to improve the process and to achieve their objectives.
Along with these concepts various principle are applied by the Kellogg's, this ensures timely
delivery of the products at the reduced cost(Kirchhofer, VCE Co Chen and Blome, 2017). It
also facilitate effective management of the two way flow of the good and services. All of them
are integrated with each other such as the concept of logistics management facilitate the
Kellogg's is managing the delivery of the products on time by customising the logistic network
as per the needs of the customers.

TASK 2
Evaluate the importance of SCM from perspective of customers, suppliers, distributors and
retailers
The supply chain management has various importance for the organisations as they
facilitate them to reduce the cost with the help of various process and principles. Further it will
help them to improve the level of satisfaction of the customers as the goods will be delivered to
them on time. Effectiveness in the process of the supply chain enhances the flow of the goods,
services and the information. The importance of SCM in context of the customers, suppliers,
retailers and the distributors are given below:
Effectiveness in the Supply chain management from customers perspective:
With the help of effective supply chain management the delivery of the products and the
services are managed well by the distributors as they make the delivery on time and this will
improve their level of satisfaction (Wang and Alexander, 2015). It can be done with the help of
better relations with the suppliers and the transportation channel which makes them delivery on
time. This leads to effective communication due to which their cost reduces and thus it ensures
supply on the right time which is required by the customers. The SCM of Kellogg's is efficient
enough with the help of which they ensure adequate amount of inventory in their store and time
delivery of the products demanded by the customers. It makes a strong customer base as their
customers will be satisfied.
Effectiveness in the Supply chain management from retailers perspective:
With the effective supply chain management the Kellogg's can ensures the adequate
amount of inventory at the stores of the retailers. This increase their sales as the customers know
that the product will be available at that particular store. Further it reduces the cost of the
company as the effectiveness in the process of the supply chain reduces the lead time which
reduces the overall cost for them. Kellogg's build healthy relations with the retailers by way of
providing them various shelf, hoardings etc. This helps the retailers to attract more of the
customers.
Effectiveness in the Supply chain management from suppliers perspective:
The effectiveness of the supply chain management has various positive impact on the
organisation. Due to effectiveness the processes of manufacturing does not delay as the material
are made available to the production department on time. With the help of effective supply chain

management the companies identifies various suppliers and select the one which is most suitable
for them. They maintain healthy and long term relation with the selected suppliers for which they
provides various developmental programs for them. This builds the confidence of the suppliers
on Kellogg's and it ensure them the business with the company for a longer span of time.
Effectiveness in the Supply chain management from distributors perspective:
Effectiveness in the supply chain make the distribution easy and effective as they share
an effective communication and understanding with the help of various IT based software. With
the help of such software they identify the level of inventory and accordingly they place order
with them. On the basis of this the distributor takes the delivery from the manufacturer and this
reduces their cost of holding inventory in the warehouses. Also the Kellogg's has entered in the
agreement with the logistics company which makes them efficient enough to manages their
supplies.
Critically Evaluate the importance of physical, financial and information flow management
Effectiveness in the supply chain leads to effective flow of the physical resources,
financial resources and the flow of the information. This is because they have better
communication among them. It develops understanding among the suppliers, distributors, etc.
Due to this the movement of the invoices, information of the orders, level of inventory can easily
be shared with each other and on the basis of this they can analyse the areas where the
improvement is required. All such analysis will help the company to manage and monitor the
flow of the finance with which the shortage of funds and mismanagement of funds can easily be
managed.
TASK 3
Evaluation of cross functional and integrated approach of SCM with other areas of an
organisation
The organisations has to integrate their functions which helps them to reduce the cost and to
utilise the resources held by them effectively (Yin and et. al., 2016). Various functions of the
Kellogg's are integrated with their supply chain management, this improves the process of
procuring and managing the material, flow of goods & services, information etc. it will further
help them to make their decisions flexible as it will be dependent upon the actions of all the

departments. The integration of various department of Kellogg's with their SCM are given
below:
 Integration of SCM with Finance department: The finance department gather funds
for the company on the basis of estimation done by them for the requirement of the
funds. Along with this they undertake various analysis which helps them to manage
the cost of the products and services so offered by them. The SCM department of the
Kellogg's gather all the information and provides to the finance department. On the
basis of such information they formulate budgets and prepare plans.
 Integration of SCM with Production department: The production department of
the organisation manufactures the goods that they offer to their customers. SCM of
Kellogg's guides them for the requirement of the products as per the demands in the
market. Also they provides them the level of standards for quality which are required
by the customers. With the help of such guidance they manufactures the required
quantity of the goods by complying with the standards required.
 Integration of SCM with Distribution department: The distribution department is
responsible for making the goods available to the customers at different locations as
per their demands. The SCM of Kellogg's helps the distribution department to manage
the flow of goods and services effectively with the help of various techniques such as
just-in-time approach which helps them to manage inventory. It will enhance the
efficiency in the delivery of the products and their manufacturing. This reduces the
overall cost for the company.
Examine the implications of interrelationship between supply chain and other functional areas
The integration and interrelation of the supply chain with that of the other functions of
the organisation has various advantage for the company. With the help of the interrelation the
cost can be managed and controlled well. The Kellogg's can utilise their resources effectively as
the department will work with each other due to which the activities which are same are done at
one place in one department. Various techniques can be used effectively by the company such as
Just-in-time approach, total quality approach etc. All these will help them to ensure the timely
delivery of the products and services to the customers and to the production department. It saves
the efforts of the people which they would have applied if the activities would have been
undertaken individually.

Critically evaluate the supply chain concepts, principles and processes and their interrelation
with other areas of the organisation
The supply chain management facilitates the organisation to manage the flow of goods
and services, along with this the flow of information and the resources are managed well.
Various concepts, principles, processes are used by the organisation so that the entire supply
chain can be improved (Abner, Setyawan and Sin, 2018). They provides specific strategies
which can helps them to manage the distribution of the products their manufacturing processes
and even their financial management etc. With the help of this the production process of the
company can be improved as they can manufacture the product on time when they are required
as per the demand. But it increase the cost of for the Kellogg's and also it makes their process a
lengthy one.
TASK 4
Evaluate a supply chain strategy and the proposal for improvement
By analysing and monitoring the above case study it is analysed that supply chain work works as
an effective strategy that is used by Kellogg's to provide better products to the customers. Like
by reducing the prices of products it is easy for organisation to perform their work easily in
market. This is also used by management to complete their work as per management strategy due
to which brand and goodwill of Kellogg's will be improved in the external environment. It also
help customers to generate trust among the products by identifying the brand name easily in a
large store. Kellogg's is operating their business in secondary industry of raw-materials. This
includes wheat, corn, rice and sugar in order to use premium products for the production of their
product. It is also used by management to meet the proper requirement of products as per
customers needs. Further, they are approaching customers through a network channel which
includes wholesalers, distributors and then stores (Almeida Marodin and Saurin, 2015). In
context of Kellogg's, management made collaborations with TDH that helps to make better
logistic network in market.
On the other side, the organisation also formulates agreements with the FDS that leads an
organisation to reduce the freeing of harmful gases in the environment such as CO2, hydrogen
and other gases. The main motive to implement and utilise the gas and water resources in
effective manner is to improve the quality of products or services which are offered by

management. On the other side, organisation is also able to reduce the overall cost of production
process. Just-in-time strategy is one of the effective tool that helps organisation to manage the
inventory management system (Abner, Setyawan and Sin, 2018). TDG also reduces the
warehouses cost by ordering and supplying required raw-materials to formulate the resources.
Some points are mention as follow:
 The organisation has the option to collaborate directly with suppliers so good quality
products are available at low rates.
 Large number of platforms are exist in market that leads organisation to approach
customers directly without the network channel.
 TQM approach is one of the effective tools that leads organisation to maintain the quality
of products.
Justify and recommend improvements of a supply chain strategy
An effective supply chain strategy is one of the most effective tools that leads the
organisation to manufacture their products as per the quality standards or benchmark. Moreover,
it also helps management to perform their work on constant basis. This strategies also leads the
organisation to reduce the actual cost that is related with supply chain process of organisation.
By introducing this is easy for organisation to increase their brand image by providing better
products to customers at low prices.

CONCLUSION
It is concluded from the above report that the company has to manage their supply chain
effectively as with the help of which they can ensure continuous supply of the products and
services to the customers. This ensures the timely delivery of the products with better quality. It
is important for the management of an organisation to understand the importance of SCM from
perspective of customers, suppliers, distributors and retailer so as to sustain in competitive
market world. Apart from this, it is also necessary to identify implications of interrelationship
between supply chain and other functional areas so as to maintain the healthy working
environment which brings motivation among staff to contribute maximum towards achievement
of organisational goals and objectives.