MGT6801: Kellogg's Supply Chain Management Report, Spring 2021

This report provides a comprehensive analysis of Kellogg's supply chain management, focusing on the critical issues faced by the company, such as environmental risks, increasing competition, rising costs, and the demand for quality customer service. The report examines how Kellogg's has addressed these challenges through various strategies, including the implementation of just-in-time inventory systems and lean production methods. It also explores the company's approach to customer service, transportation, warehousing, and competitive advantage. The report critically assesses the effectiveness of these strategies and suggests potential improvements, emphasizing the importance of adapting to market changes, managing costs, and enhancing supply chain efficiency to maintain a competitive edge in the global market. The report also considers the implementation of efficient and fast supply chain models for further improvement.

SUPPLY CHAIN
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Critical issues emerged in a particular organization pertaining to supply chain.........................3
Ways in which the organization managed the issues or problems...............................................5
Critically assessing the findings and suggesting ways in which the organization can improve
its supply chain............................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The supply chain management basically refers to the creation and the implementation of
the processes which are essential for the delivering of the raw material from the place of supplier
to the place of production and then the final delivery of it to the end consumer. Logistics is just a
part of supply chain which involves collaboration with the channel partners for effective
coordination and collaboration of supply chain management. In this report Kellogg's which is the
massive organization having a sound position in the market is taken. This report is based on
analysing how the company has conceived, supported and developed its logistics and supply
chain management with the help of relevant concepts and models.
MAIN BODY
Critical issues emerged in a particular organization pertaining to supply chain
Kellogg's is the leading organization in providing food items of wide range to its
customers all across the world. The organization has been able to establish a successful global
network. Since, 1938, the company has opened its production plants in UK, Asia, Canada and
Australia, therefore, it is now having manufacturing plants in over 19 countries and are sold in
almost 160 countries. The supply chain of the company involves all the tasks starting from the
product development to the end delivery to the final customer.
Risk creating pressure
The various elements like the international complexity or the environmental changes and
the trade disputes are having the potential for affecting the supply chain. These factors can turn
into risk for the organization resulting into causing significant problems. The environmental
factor is a major concern for Kellogg's as it threatens to disrupt the organization's supply chain as
it procure its key ingredients like the wheat, corn, rice from the complex network of farmers
worldwide. In addition to this, most of the farmers have relied on the precise climate conditions
in order to prosper (Saberi and et.al., 2019). But the changing climate conditions creates a threat
that whether the company will be able to be competitive in the global market. In case, the farmer
are unable to produce the reliable crops then it might result into interruption in the supply chain
as the key partners of company might not be able to grow enough crops in order to meet with the
demand.
Fast competitive markets:

The supply chain of the Kellogg's has faced problem because of the increase in the
competition as the new firms are entering the retail industry with a wide range of customer
focused products has resulted into affecting the supply chain of the company. It mainly involves
the storage facility, transportation along with the customer services. This has resulted into
affecting its supply chain system. In addition, it is important to understand that the company is
currently facing problem pertaining to its future prospects which is due to change in the
customers taste and preferences and in order to overcome the situation, Kellogg's have even
decided to divest from some products not making profits in order to reduce the costs and grow
stronger (Kshetri, 2018). Along with that, the company is required to effectively analyse the
changing market and habits of the consumers so that it can come up with the products which will
help in grabbing more customers and stay competitive. Competition has resulted into delays in
the transportation of the products at the right time thus, Kellogg's requires working on this which
can be done through the way of hiring the experienced and highly qualified personnel in the
supply chain management who will assist in handling the supply chain of the company and
increasing the capacity management.
Increasing costs of supply Chain
Another important concern in regard to supply chain is that the company is also facing
the issue of rising cost which has resulted into affecting the profit margins of the organization.
The costs are just not from the one area but are from the diverse areas and excludes the lack of
visibility and accountability which will result into increase in the operational expenses (Kshetri,
2018). This rise in cost resulted into increase in the price of the end product. The major
contributors pertaining to this problem is the rise in the fuel price along with the price of raw
materials and the increasing labour cost. It also involves the increase in complexity in the
internal logistics which ash lead to high charge for storage and handling of products.
Consumer demand drive for quality customer service
Nowadays, consumers are having a wide range of products to choose from which has
resulted into disruption in every industry. The company Kellogg's is required to analyse every
touchpoint focused on providing better products and services to its customers. Thus, quality
along with speed has become very crucial for the pricing in respect to the purchasing (Koberg
and Longoni, 2019). In the current scenario, it is important for the organization to identify the
needs of the consumers so that it can provide the right quantity of the products at the right place

which will help in effective providing quality services to its customers. In the growing
competitive world, quality customer services is the foremost strategic vision as inability to focus
on it might lead to longer term impact over the financials and the market position.
Supply Chain Complexity Due to Multiple Channels
In the current times, there are various ways being available with the consumers pertaining
to buying of products as the market increases. Thus, supply chain management of the company
should adapt the changes (Ben-Daya, Hassini and Bahroun, 2019). Kellogg's is required to
identify the multiple channels which it can use in order to create and expand its market presence.
Thus, this results into the increase in the complexity of the supply chain system and mostly on
the productive management of its diverse channels within organization.
Thus, the above are the issues which the organization is having trouble with in respect to
dealing with it pertaining to its supply chain. It involves all the key aspect of supply chain like
the customer service, transportation, warehousing along with the competitive advantage.
Ways in which the organization managed the issues or problems
Supply chain management (SCM) mainly involves the coordination and integration of the
different processes within the organizations. The flow of SCM is bifurcated into three main
flows which are:
Product flow- Refers to the movement of product from the supplier to the ultimate consumer
along with return and the other service requirements (Xu, Zhang, Feng and Yang, 2020).
Information flow- Transfer and communication of the orders and the status in regard to delivery.
Finance flow- It involves the receipt, transfer of ownership, completion of consignment and
scheduling payments.
Before implementing any strategy, it is important for Kellogg's in understanding the principles of
SCM which are its main objectives as well which are stated below.
1. Adapting the supply chain depending upon the requirements of targeted customer
segment.
2. Customising the logistics network for every segment.
3. Aligning the demand planning all across the supply chain.
4. Differentiating products which are closer to the consumers.
5. Outsourcing strategically.
6. Creating IT which supports the multiple level decision-making.

7. Adopting the various metrics like the service and financial.
There are different models pertaining to supply chain which are based on the efficiency
and the responsiveness. Kellogg's have implemented Just-in time management and lean
production system in order to meet with its issues pertaining to the SCM. A detailed analysis of
the implementation of it is stated below.
Just in time inventory system
Kellogg's have implemented this inventory management system in order to effectively
manage its inventory system. This method means that making available that much amount of
stock which is made to fulfil the expected orders which also helps in avoiding the situation of
overstocking and under-stocking of the goods. This system was very essential for Kellogg's in
order to over the problem of inventory management (Ketchen Jr and Craighead, 2020). The
company is needed to maintain aright balance at different sections of the supply chain and in
addition late deliveries or the inability to deliver because of the lack of products might result into
making the retailers purchase the product from its competitors. Along with that, its collaboration
with the TDG and through the way of relocating its few warehousing facilities, which has all
resulted into making the distribution system of the Kellogg's more efficient. The computerized
inventory management system has helped it in ensuring that the shelves are always filled with
the required quantity of products and the orders are delivered on time. This has resulted into
maintaining the stocks at the minimum level and has also assisted its customers like ASDA in
reducing their stock as well.
Lean production system
The company has also implemented lean production system which helps in streamlining
the processes in such a way that it results into elimination of wastages. The computerized
wastage refers to the idea that the goods have been produced efficiently and has being
successfully transported from the warehouse to the ultimate consumers. This supports in
avoiding the situation of delay in delivery to the consumers. By collaborating with TDG, it
helped the organization in lowering the warehouse costs through the way of computerize heating
and the specialized transportation skills (Lahane, Kant and Shankar, 2020). Through
computerization, the stock-holding shows the immediately when the space is empty. This then
automatically results into generating orders for the production base to replenish stocks. Thus, on
an overall basis, through this system, Kellogg's was able to reduce its wastage along with

reducing the cost which has consequently lead to rise in the profits of the company. In addition,
it supported the company in keeping its price competitive resulting into making customers happy
and satisfied. It is important to note that this will further reduce the negative impact over the
environment leading to reduction in risk pressure.
Therefore, these are two initiatives which are taken by Kellogg's with the objective of
overcoming with the issues and problems in respect to its supply chain so that it can carry out its
business activities in an effective way.
Critically assessing the findings and suggesting ways in which the organization can improve its
supply chain
Based upon the above analysis and findings, it can be stated that in order to further
improve there are certain models or concepts or strategies which can be implemented by the
Kellogg's which will help in creating value and overcoming the issues it faces in a more better
and effective way.
The efficiency focussed supply chain models
Efficient Supply Chain Model
The efficient SC method is preferable for the industries where there is the situation of the
intense competition along with fighting for the same group of target customers for whom the
major difference in the proposal might not be the same. Therefore, the price of the commodity
plays a key role. Under this, the management will work on optimum utilization of its resources
like machinery and the various other assets pertaining to maintaining the high efficiency rate of
the equipment in order to reduce the cost (Esper, 2021). They are also relied upon the accurate
forecasting for ensuring product availability. The core aim behind the utilization of this model is
to attain the high rate of asset utilization which will lead to lowering of costs by bringing in
efficiency. If implemented by Kellogg's it will assist in attaining competitiveness as the final cost
of the product is reduced or the profit margin can be increased.
Fast Supply Chain Model
This model is best suited for the product which are having short lifecycle and thus, in
this, the management would be required to focus on the continuous promotion of the product
portfolio revision which helps in ensuring affordable cost for its customers. It is feasible for the
organization which keeps on changing its products frequently and getting them to the market
quickly before the trend is gone. The core idea behind this model is to shortening the time for the

idea to market along with the increasing the level of forecasts accuracy resulting into minimizing
the market mediation costs which will be beneficial for Kellogg's.
The responsiveness focused supply chain models
Agile Supply Chain Model
The agile model can also be implemented by Kellogg's in order to deal with the specialty
order items. This model brings in flexibility which is key component in respect to the
responsiveness pertaining to supply chain models. This is mainly employed by the industries
having unpredictable demand. Under this model, Kellogg's utilizes the “made-to-order” approach
which allows the production of the item as per the order placed by the company. This model will
be right for Kellogg's as it has the ability to allow extra capacity in case of huge orders and also
the ability of purchasing the orders in the small batches (Mangan and Lalwani, 2016). This
strategy makes use of the real time data and the up to date information in order to leverage the
current business operations and making use of the real time data against the forecasted data
which supports in improving the efficiency and the productivity of the organization. In addition
to this, it will help supply chain partners for the purpose of working together so that it can
effectively meet with the daily requirements.
Flexible Supply Chain Model
This flexible supply chain model is typically useful for the businesses which experiences
the peak in the extremely high demand which is further followed by the longer periods of the
long demand. The main characteristics of this model is high level of adaptability which is having
the capability to review its internal production related processes which helps in effectively
meeting with the customer needs and the ability and having the ability or flexibility of switching
on or off easily (Dani, 2019). It can be successfully implemented by the Kellogg's as it operates
in the market which is highly unpredictable in nature in regard to demand. Under the situation
like handling large volume of order, this supply chain model has the flexibility to operating in a
cost effective manner with the lower volumes and working at the nearly full capacity utilization
when the market demand was strong. This will assist in effectively and efficient managing the
costs pertaining to supply chain and also optimally splitting between the fixed and variable costs
of the business operation.

CONCLUSION
It can be inferred from the above that the Kellogg's is having problem in regard to its
supply chain management for which it has undertake relevant steps which will help in
minimizing the threats associated with each of the issues identified like climate change, rise in
competition, quality customer service, transportation and so forth. But for this, it has
implemented just in tome and lean production's system which has turned out to be beneficial for
it. At last, based upon the analysis, certain models and strategies is being recommended to
Kellogg's which will help in effective handling and improvisation of the supply chain
management. Thus, SCM helps in moving goods from one place to another so that it is delivered
on time to its end consumer in order to meet with the different business requirements.

REFERENCES
Books and Journals
Ben-Daya, M., Hassini, E. and Bahroun, Z., 2019. Internet of things and supply chain
management: a literature review. International Journal of Production Research. 57(15-
16). pp.4719-4742.
Dani, S., 2019. Strategic supply chain management: creating competitive advantage and value
through effective leadership. Kogan Page Publishers.
Esper, T. L., 2021. Supply chain management amid the coronavirus pandemic. Journal of Public
Policy & Marketing. 40(1). pp.101-102.
Ketchen Jr, D. J. and Craighead, C. W., 2020. Research at the intersection of entrepreneurship,
supply chain management, and strategic management: Opportunities highlighted by
COVID-19. Journal of Management. 46(8). pp.1330-1341.
Koberg, E. and Longoni, A., 2019. A systematic review of sustainable supply chain management
in global supply chains. Journal of cleaner production. 207. pp.1084-1098.
Kshetri, N., 2018. 1 Blockchain’s roles in meeting key supply chain management
objectives. International Journal of Information Management. 39. pp.80-89.
Lahane, S., Kant, R. and Shankar, R., 2020. Circular supply chain management: A state-of-art
review and future opportunities. Journal of Cleaner Production. 258. p.120859.
Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. John Wiley &
Sons.
Saberi, S. and et.al., 2019. Blockchain technology and its relationships to sustainable supply
chain management. International Journal of Production Research. 57(7). pp.2117-
2135.
Xu, S., Zhang, X., Feng, L. and Yang, W., 2020. Disruption risks in supply chain management: a
literature review based on bibliometric analysis. International Journal of Production
Research. 58(11). pp.3508-3526.