OPER8340 Term Project: Kellogg's Global Supply Chain Management

This report analyzes the global supply chain management of the Kellogg Company, focusing on a recall situation involving contaminated cereal products. It examines stakeholders, including Kerry Incorporation and ARICAM, and their objectives, along with communication strategies employed during the recall. The report delves into the location of product contamination, shipping processes, and the potential impact of using Incoterms. It further explores risk mitigation strategies within Kellogg's procurement team, ethical risks related to contract manufacturing, and processing strategies used during the recall. The project also considers the recall within a circular economy model, transportation modes, legal and cargo security considerations. The report provides recommendations and identifies key success factors for improved supply chain management within Kellogg's.

Running head: GLOBAL SUPPLY CHAIN MANAGEMENT
GLOBAL SUPPLY CHAIN MANAGEMENT
Name of Student
Name of University
Author note

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Executive Summary
This report will discuss regarding the Global supply chain management of the Kellogg
Company. This report also discuss regarding various questions related to the Global
Supply Chain Management of the Kellogg Company.

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Table of Contents
Introduction..........................................................................................................................6
Discussion............................................................................................................................6
1.a) The recall situation..................................................................................................6
b) Stakeholders involved and their objectives...........................................................6
The two stakeholders of this company include Kerry Incorporation of Gridley
and ARICAM.....................................................................................................................6
c) Information communication to the stakeholders...................................................7
d.Communication of Kellogg’s with the other stakeholders....................................8
2 a. The place where the contaminated products are produced.............................8
c.Kellogg’s shipping in terms of the sale....................................................................9
d. Shipment of the contaminated products to the customers.................................9
e. What might have been occurred if an incoterm is used and why?.....................9
3. a) How the Kellogg’s procurement team have been migrated the risks
associated with the outsourcing of the product?....................................................10
b. Description of the ethical risks related to the contract manufacturing of the
Kellogg’s.........................................................................................................................11
4. Processing strategies followed by the Kellogg’s followed in conducting the
recall................................................................................................................................13
5. Recalling of the product related to the circular economy model......................14

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6. a)The mode of the transport, convenience and the equipment for the
shipment of the products related to the Kellogg’s...................................................15
b. Legal considerations related to the shipment......................................................15
b) Cargo security issues..................................................................................................18
8. Cargo security programs.............................................................................................19
Recommendations............................................................................................................19
Key success factors..........................................................................................................20
Conclusion.........................................................................................................................20
References..........................................................................................................................21

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Introduction
In the area of the commerce, the term global supply chain management is
described as the goods and services of the distribution throughout the entire tarns-
national companies and as well as the maximization of the profit and minimize the
waste.
The Kellogg Companyis the USA based food manufacturing company
(Christopher, 2014). It actually manufactures the cereal, cookies, toaster pastries,
crackers and many others.
This will discuss the regarding the different questions related to the Global
Supply Chain Management of the Kellogg.
Discussion
1.a) The recall situation
Government officers of the Guatemala are learning of the recall by using the
government Facebook account (Monczka et al., 2015). They had contacted with the
ARICAM and insisted them for the disposal of the food product in Guatemala.
Contaminated products were shipped from the USA (Hugos, 2018).
Administration of Guatemalan is firmed regarding the disposal of the contaminated
products from the United States of the America.
b) Stakeholders involved and their objectives
The two stakeholders of this company include Kerry Incorporation of Gridley and
ARICAM.
Kerry Incorporation is providing the Business to business solutions for the taste,
nutrition, functional innovation and many others (Seuring, 2013). This company will
provide this type of the solution to all the sectors of the pharmaceutical, taste and
nutrition and many others. This includes the retail and also the foodservice end-use-

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market of all the categories that is served by all the customers (Baron et al., 2014).
Their goal is to the nourishment and the delightment of all the customers at the entire
globe. They give the products to the people for the enjoyment and the feeling the
betterment. They provide the customers the products with the insights, expertise, and
the procedure of the delivery of the product which people can enjoy and feel better after
consuming these (Schröder et al., 2014). They also understands the science of the
taste and they are applying their insights for tasting with the food and the technology
and also the advancement of the knowledge which is related to the culinary for helping
their customers for creating the unique and the innovative products of the food and
beverage.
c) Information communication to the stakeholders
The communication of the Kellogg’s to the stakeholders includes the
transmission of the Information from the sender to the receiver. The efficient
communication of the needs to be ensured that the information which is not received
clearly will be very difficult to understand (Waters, & Rinsler, 2014). The information
should be sent in such a manner it can be understand by the stakeholders very easily
(Pagell & Shevchenko, 2014). It is involving the selection of the appropriate format to
transmit the messages. Examples of these includes that the media may be used include
the leaflet, the television, and also the personal letter. The feedback process of the
stakeholders is very vital because by using this feedback process the company comes
to know regarding the receivable of the information by the stakeholders (Stadtler, 2015).
For the effective transmission of the information barriers of the communication which is
also known as noise must be reduced or eliminated. Noise is used for preventing the

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user from getting the message. For example, noise may contain some jargons or some
languages for using a channel which may be either email or the internet at the time
stakeholder is involved him/her for both the internal and the external communication
(Seuring & Goldbach, 2013). Internal communication involves itself for the transmission
of the messages to the stakeholders, senior managers and many others.
Communication is in the range of the stakeholders which includes the stakeholders,
customers, suppliers, media and many others (Wang & Cullinane, 2015). An effective
communication can help the stakeholders a crystal clear direction within the Kellogg’s
and it is helping the motivation of the employees within the Kellogg’s. This can be used
to change the motivation of the public. The purpose of the communication of the
Kellogg’s to the stakeholders is to increase the commitment to the breakfast clubs in the
Cania.
d.Communication of Kellogg’s with the other stakeholders
The other stakeholders of the company include the different schools and the
Member of the Parliament (Monczka et al., 2015). The core objective of this type of the
communication is to increase the importance of the breakfast (Schaltegger, & Burritt,
2014). Awareness of the public will increase which will increase the growth of the
funding for the breakfast clubs by motivating the customers as well as the stakeholders
for buying the product of the Kellogg’s.
2 a. The place where the contaminated products are produced
The contaminated products of the Kellogg’s cereals are found in the Guatemala.
This is reported by the Kellogg’s ARICAM office at Guatemala (Turker & Altuntas,

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2014). They report that they found approximately one hundred forty pallets of the
salmonella contaminated cereal products cereal products in wholesale.
b. Shipping of the cereal products
They were shipped the product to the Mexico City. They were shipping these
kinds of the products with the help of the Kerry Incorporation in Gridley.
c.Kellogg’s shipping in terms of the sale
Kellogg’s sales 2.7 billon boxes in a year.
d. Shipment of the contaminated products to the customers
Kellogg’s very frequently ship the contaminated products to the customers. More
than thirty people are reporting as the sick after the Honey Smacks Cereal
contaminated with Salmonella (Schaltegger et al., 2014). The centre of the disease
control says that they are bringing the total 130 cases in Thirty six states in Canada. Till
date thirty-four people has sent to the hospital, but no deaths are reported yet. On
Tuesday, CDC said that, three more states are added and the illness is reported from
these states. In the month of June Kellogg had decided that they recalled the 1.3 million
cases of the contaminated Honey Smacks from more than 30 states situated at the USA
(Ivanov, Tsipoulanidis & Schönberger, 2017). This occurred due to the potential for the
contamination of the Salmonella.
e. What might have been occurred if an incoterm is used and why?
If the Incoterm is used for the Kellogg’s products then it will reduce the delivery of
the contaminated cereals to the many countries (Wang et al., 2016). These rules are

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implemented for reducing or removing the uncertainties which will arise due to the
interpretation of the rules applied over the different countries.
3. a) How the Kellogg’s procurement team have been migrated the risks
associated with the outsourcing of the product?
The risks involved during the outsourcing of the product of the Kellogg’s include:
Supplier risk, Risk related to quality, Risk related to the reputation of the company. For
overcoming the supplier related risk, the Kellogg’s company should investigate this
matter very seriously (Ivanov, Tsipoulanidis & Schönberger, 2017). They should
investigate the potential source of the suppliers and the customers and they make the
risk assessment in depth. Kellogg’s authority should check the practices related to the
business which is related to the potentials suppliers for identifying any possible
problems (Schaltegger et al., 2014). For minimizing the risks related to the quality of the
products of the Kellogg’s the company should prepare the specification of the products
in detail manner (Turker & Altuntas, 2014). It is for the suppliers and it is used to insist
for the independent quality control. To avoid the reputational risk on the Kellogg’s
product the human rights issues of the supplier should be investigated properly by the
Kellogg’s authority (Schaltegger & Burritt, 2014). It can be done for ensuring the
compliance for the global sourcing. This includes the following points:
 Time of transportation, cost and the risks related to the Kellogg’s cereal product
are much higher than with sourcing of the products which are related to the
domestic works are consequence of the large routes.

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 Differences of the culture may make the complicate the communication of the
business (Monczka et al., 2015). Otherwise it will be responsible for the delay in
the shipping procedure.
 Manual documentation of the industrial research is very complicated. It may
require some kind of the research (Wang & Cullinane, 2015). It includes the
costs related to the consultancy. Otherwise in many of the cases the
outsourcing may be a brokerage.
 Political instability might interrupt the work of the supplier and it requires the
choose of the alternative resources.
 Weather of a particular place can be a great factor in this case. It will may
create the delay in the shipping procedure.
Ideally for reducing the risk related to reputation the company should investigate
the above factors and the investigate upon the balanced sourcing strategy
(Seuring & Goldbach, 2013). It cans the mixture of the global and domestic
sources are used regarding this matter.
b. Description of the ethical risks related to the contract manufacturing of the
Kellogg’s
The ethical risks related to the product manufacturing of the Kellogg’s includes
Disconnection of the sourcing, contracting and the planning, Billing of the complexity of
the material, Issues related to the accuracy of the order.

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Disconnection of the sourcing, contracting and the planning: Once the decision of
the words is finalized the company needs to establish the contracts very quickly,
safely and in a very efficient way. Every contract policy should be signed in
proper manner and it should be stored in the database of the Kellogg’s (Stadtler,
2015). It can be easily accessed from the database for the execution of the
purchase order. When the sourcing and the information of the contract are not
integrated then the majority of the work has to be done manually. Then the work
will be very slow, inefficient and very worst (Pagell & Shevchenko, 2014). The
pricing and the terms of the contract must be negotiated during the process of
the sourcing that never be uploaded to the material requirement planning that
results in the leakage of the contract and it increases the selling of the cost-of-
goods.
 Billing complexity of the material: In this case, the challenge may occur
for the complicated and the bills having multiple levels (Waters & Rinsler,
2014). If the BOM is more complex for the company then it will be very
difficult for the commodity manager Kellogg’s company to confirm that the
correct suppliers are selected for all the items related to the BOM.
 Issues related to the order accuracy: The perfect example this
category includes the huge trend of the retailer who sends the order of the
customer and the details of the delivery directly to the stocking goods of
the suppliers. The supplier fulfills the order to the customer directly.

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c) The best Supplier Interaction model that exists between the Kellogg’s and the
Kerry Incorporation
Interaction model of the segment is the best suited model for Kellogg’s and Kerry
Incorporation (Schröder et al., 2014). This model suitable for this case because
segmentation is used for identifying the type of the customers who will response to the
particular offer. This model will identify the high spenders of the Kellogg’s and the Kerry
Incorporation for distributing among the consumers (Baron, Brouwer& Garbayo,2014).
The company authority will increase this type of the model for increasing the shopping.
Segmentation model is used to understand the specific profiles of the customers related
to the Kellogg’s and the Kerry Incorporation which will exist within the specific base of
the customers so that different actions related to the multiple marketing can be
personalized for each of the segment (Seuring, 2013). Segmentation on the
geographical regions is based on the influence and also life style related to the
consumers which are living in the different geographical regions so that distribution and
the sales strategies of the Kellogg’s and Kerry Incorporation can be done very
efficiently.
4. Processing strategies followed by the Kellogg’s followed in conducting the
recall
The processing strategies required for the Kellogg’s for conducting product recall
includes:
 Response strategy for the crisis
 Crisis and they Responsibility