SUPPLY CHAIN MANAGEMENT

Supply Chain Management

Introduction

The inception of Giro Food Limtied spans back to the year 1969. It is a catering and wholesale supplier, reputed as an innovator in the ethnic food industry. In regard to catering, the company specializes in among others; Pizza products, Greek products, Fat & Oils, Batters & Coatings, Frozen fish, Fresh vegetables, spice & additives, and soft drinks. All the products are sourced from across the world (Girofood.com, 2016). Again the Giro Food Limited has well established and reputable restaurants which deals with; Dalls & Pulses, Dried fruits & Nuts, Herbs & Spices, Beverages & Soups, Rice & Flour, and Pickles & Pastes among others. In fact, besides operating its restaurants, the company has established cordial working relationships with other reputable and award winning restaurants. Giro Food Limited has a distribution division, operating a large fleet of vehicles, thereby ensuring after-service delivery to the clients. However, the company’s central tenet is based on the cash and carry system. The company supplies its “products to the Indian, Chinese, Afro-Caribbean, Greek and English markets” (Girofood.com, 2016).

 

 

 

 

 

 

 

 

 

 

A map of the Different Tiers in the Supply Chain

Tier 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In regard to the above map, Giro Food Limited gets its resource input from different suppliers, manufactures, later stores them in their Birmingham warehouse, and finally presents them to the end users through the restaurants and via their catering services. For instance, some of the resource inputs are obtained from the farms, tier 1. Others may be obtained from the market and manufacturing companies, tier 2. The products are later distributed through the company’s integrated distribution fleet to the respective restaurants as well as during any catering undertaking.

Derive Characteristics of Supply Chain Covering Supply, Demand and Internal Operations

From the onset, it is important noting that every supply chain, regardless of the industry or business, will be seeking to achieve excellence (Bolstorff & Rosenbaum, 2007, p. 20). As such, relative to supply, demand, and internal operations, every supply chain can be defined by the following characteristics. Firstly, the supply chain always seeks to optimize the inventory. Conventionally, the presence of excess inventory in the supply chain can be detrimental to the particular business in question. Equally, failure to meet the minimum inventory requirements in the supply chain will traumatize the system. Consequently, a good supply chain is defined by inventory optimization, which requires an extensive, accurate and precise forecast of the required items (Dubrin, 2009). Eventually, this will ensure maintaining a balance between supply and demand while sustaining the internal operations at the optimal levels.

Secondly, supply chains should be innovative and especially considering the rapid technological advancements taking place day after day. As such, the supply chains should be well placed in the innovative chain to ensure that every operation is kept at watch and achieves optimal outcome. For instance, there has been the fitting of warehouses with smart glasses aimed at facilitating the picking up processes. Eventually, this optimizes the internal operations within a warehouse, and this does not leave out Giro Food Limited.

Thirdly, the best and well managed supply chains have proper planning strategies put in place (Blanchard, 2010). It is admissible that a supply chain involves a lot of operations right from the sourcing of raw materials, manufacturing, and distribution to the end consumer. For instance, there has to be a determination of the workers to be assigned a particular responsibility at a particular section within the entire supply chain. Most of the businesses have put in place enterprise resource planning (ERP) in their supply chains to help improve their overall planning. Without proper planning, any supply chain is deemed to collapse (Tang, Teo, & Wei 2008). Again, through proper planning, there is the ability of critically researching the market and noting any fluctuations that may affect the material sourcing, manufacturing as well as any other element affecting the supply chain processes. Through proper planning, a business is able to establish a strong balance between supply and demand and this is not an exception when it comes to Giro Food Limited.

Fourthly, customization and personalization is another attribute that defines the supply chain. This defines the ability of businesses to implement different supply chain processes so as to meet the diverse needs of the end consumers (Blanchard, 2010). This means, that every process in the supply chain, is designed to specifically deal with a particular process. For instance, in the case of foodstuffs, different ingredients will be added at different stages. The same case will apply to the packaging, sealing, and branding of the foodstuffs.

Fifthly, most of the supply chains in different businesses are sustainable. This stems from the corporate social responsibility (CSR) concept, which is not uncommon in many industries including the food sector. Businesses are expected to utilize their raw materials in the most sustainable manner by ensuring that they cause zero or minimal effects on the eco-system (Tang, Teo, & Wei 2008). This largely depends on the raw materials used and the internal operations, within the supply chain. Through the adoption of the above strategies Giro Food Limited should carry out its activities, ordering, based on the following order quantity equilibrium graph.

Identification of Issues and Challenges in Supply, Demand and Internal Operations

The operations of Giro Food Limited revolve around the food industry. As such it is going to encounter the following issues in regard to the supply, demand, and internal operations. Visibility is the first issue that most supply chain managers face including those in the food industry (Worley, 2016). It is admissible that supply chain management is a complex undertaking, involving different tiers, manufacturers, distributors, suppliers as well as the consumers. The disruption of any of the above mentioned compromises the steadily running of the processes in the supply chain. For instance, there may be field losses, transport damages, as well as consumer wastages. Again, there are a cluster of other challenges emanating from cost controls, owing to the changing labor rates, fluctuating energy costs, and changing costs for the input resources (Worley, 2016).. In the case of Giro Food Limited, its operations are global implying that it has to adapt to the changing commodity prices. It is also important noting that different cultures may need different foods implying that Giro Food Limited must work towards meeting these localized needs. Eventually, this may demand a change in the company’s supply chain, and this is not always an easy undertaking. Also, the mere fact that the company has multinational operations means that it is exposed to relatively many legal requirements and changes and especially considering that it deals with foodstuffs, which are highly sensitive to human health (Eastham, Sharples & Ball 2007). Additionally, planning and disaster management requires regular redesigns, which may interfere with the already established supply chain processes. Finally, the globalization concept coupled with the desire to expand its markets, Giro Food Limited, will be required to adopt the emerging technologies so to produce safe and high quality products. Unfortunately, this is an expensive undertaking in terms of staff requirement, expenses, and the overall changes to be done on the already existing systems and processes in the current supply chain (Eastham, Sharples & Ball 2007).

Competitive Strategies Considering Products Attributes and Customers’ Requirements

According to Michael Porter, there are only two approaches that a company can use in achieving competitive advantage; Differentiation and Cost leadership. It is from the above that the proponent, Michael Porter, derives the cost and differentiation focus. In regard to Giro Food Limited, the following competitive advantages may be derived from its overall structure and with regard to its products attributes and the consumers’ requirements. Giro Food Limited deals with a broad category of products, as captured in the preceding sections. The company has been in operation for more than 47 years, thereby, gunning a lot of experience in its areas of specialization. The company has been offering high quality foodstuffs, drinks and beverages through its catering and restaurants’ approach. As a catering and wholesale supplier, the company has always maintained quality products. Eventually, this enables the company to enjoy a competitive advantage, thereby expanding its markets to the international markets. Again, the company has been able to offer a wide range of products rather than focusing on an individual product. Fortunately, all the products are centered towards the food categories, which enable the company to broaden its expertise while boosting its competitiveness. Nevertheless, Giro Food Limited has been very conscious in regard to its pricing strategies. Although the company is not the price leader in the food industry, in the countries it operates, it has put in place strategies that aim at achieving the above mentioned objective. For instance, it introduced “Winflo”, which despite offering a wide range of products aims at providing alternative brands at relatively cheaper prices (Girofood.com, 2016). Distribution is an important element in business operations. As such, products Giro Food Limited can be obtained from its restaurants as well as other award winning restaurants. Again, its catering services are available for wedding, festivities, and other kind of outdoor parties. Finally, the company has adopted the “cash and carry” approach. In connection with the above, Giro Food Limited, offers after-service delivery to consumers across all the areas it conducts businesses (Girofood.com, 2016). All the above, derived from its business structure, helps the business to have an added competitive advantage.

Supply Chain Strategies Covering Supply Chain Drivers

In coming up with the most effective supply chain strategies, Giro Food Limited must put into consideration the five different supply chain drivers. These include; inventory, production, transportation, location, and information. In the view of the above, the following supply chain strategies may be deemed most efficient. These will span from the sourcing, operations, and route to market strategies (In Ramanathan & In Ramanathan, 2013). Firstly, there is a need to put into consideration the “agility” supply chain strategy. In this case, Giro Food Limited will be working towards creating a balance between supply and demand and especially considering the unpredictable food market fluctuations. In other words, through the “agile” strategy, the company is well placed to optimally address issues of responsiveness which spans across its inventory, production, transportations, pricing, and location, for instance, how to price its products and when to present them in the market. Secondly, there will be a need to make optimal utilization of the “lean”, strategy that primarily aims at cutting down any wastage of products (In Ramanathan & In Ramanathan, 2013). For instance, in the case of Giro Food Limited, the idea will be to mitigate any issues of wastage during the storage and transportation process. Thirdly, there will be the use of the “Leagile” strategy, which combines both the lean and agile supply chain strategies. The approach is mainly used in the “projection of unpredictable demands as well as long lead times” (In Ramanathan & In Ramanathan, 2013, p. 11). In regard to Giro Food Limited, the strategy will mainly be used in the projection of long run market situations in the different locations that the company supplies its food products, either in the form of catering or restaurant services. Lastly, it will be optimal for Giro Food Limited to utilize the “Risk edging” strategy, which is mainly used for functional and evolving processes (In Ramanathan & In Ramanathan, 2013). Giro Food Limited will utilize the strategy so as to try and mitigate any effects of supply uncertainty. As such, the company will be in a position to closely monitor its inventory, production, pricing, and transportation processes so as to achieve optimal gains at relatively reduced losses.

 

 

Analysis of the Synergy between Competitive and Supply Chain Strategies and Identify

Gaps

In regard to Giro Food Limited, there is a synergy between the competitive and supply chain strategies as demonstrated in the ensuing section. The demand and supply of products will shift from time to time and the ability of a company or business to produce a wide range of products places it a relatively higher competitive position. This is because, at a particular time, some commodities may be having relatively lower demand while others have higher demand. Giro Food Limited is well placed in optimizing this opportunity. Additionally, the ability to offer high quality products helps the company to mitigate any cases of wastage resulting from rejected commodities in the market. In fact, issues of wastage are addressed further by the ability of the company to offer-after service delivery to the clients through its massive transportation fleet. Also, it has been very conscious about its pricing strategies and the products can be obtained from the company’s outlet restaurants and other award winning restaurants. Also, it targets many international markets rather than focusing on the local ones, hence expanding its clientele base. This, coupled with the already established market, enables the company to mitigate its wastage. However, the idea of “cash and carry” may bring about a disconnection between the competitive advantage and supply strategies especially. Most of the clients would prefer the after-service delivery as opposed to “cash and carry” approach.

Develop Relationship between Supply Chain Issues and Challenges with the Strategic Gaps

A strategic gap is defined as the disconnection between a company’s current performance and its projected performance into the future (Chai, 2009). The primary objective of any for-profit company is to maximize its revenue and profit margins through expanded market coverage. Currently, Giro Food Limited has main operations in Europe, Asia, and Afro-Caribbean. Again, the company offers high quality haute cousins that have attracted a large number of loyal clients. However, from a strategic point of view and considering that Giro Food Limited has been in operation for only 47 years, it is arguable that it would love to expand its market and production as well to achieve the pre-stated long term objective. For instance, it could expand its market to the American, African, and Australian continents, especially considering that food is a basic need to everyone and hence could do well in any market as well as it is of high quality and commensurate with the cultures and traditions of the host society. However, to achieve this, there need to be proper planning, extensive management of the supply chain, dealing with a large base in regard to legal requirements and ensuring stiff and extensive innovative capabilities. All these challenges have been previously cited and discussed as some of the issues that face the abilities of a supply chain to achieve excellence.

A Project for Improving Sustainability

From the preceding section, the idea of Giro Food Limited is to expand its operations and ensure their sustainability in the long run. As such, the following strategies are deemed most effective in ensuring a sustainability plan for the company. From the onset, Giro Food Limited must look forward towards ensuring cost effectiveness, focusing on result-orientation, upholding diversification, maximizing the use of available resources, and ensuring efficiency to achieve short and long-term goals. However, in regard to improving its sustainability the company must continue and work extra harder in regard to its corporate social responsibility (CSR). In this case, it should into application the policies put forward by the Environmental Protection Authority (EPA). Firstly, Giro Food Limited should source its raw materials from environmentally conscious suppliers, for instance, the ones that do not use harmful chemicals in food production. In nutshell, they should focus on sustainable sourcing. Secondly, Giro Food Limited should always work towards reducing greenhouse gas (GHS) emissions. This implies continually controlling and monitoring its storage facilities to avert any cases of environmental damages through affluent and waste products.  The company’s packaging and waste disposal should always ensure reduced environmental implications. Thirdly, there is a need to ensure biodiversity by putting in place programs that aims at promoting the stability of the eco-system. Fourthly, it is important for Giro Food Limited to put in place social-economic programs such as sponsorships and philanthropy initiatives so as to promote its relationships with the surrounding communities.

Business Case for the Improvement Project

Despite operating in relatively many countries, Giro Food Limited would like to expand its market base to more continents and countries. This is aimed at expanding the company’s current target markets so as to achieve increased income and profit margins. Conventionally, any for-profit business will aim at maximizing its profits, and this demonstrates the reason as to why Giro Food Limited intends to expand its market. The company operates from one central warehouse, in Birmingham, and distributes its products through the use of its expansive fleet of distributors. It follows that an expansion in its operations, will attract some more investment expenses in bring up new warehouses, restaurants, or establishing new working relationships with award winning restaurants in its projected markets. However, up on undertaking a cost-benefit analysis, the positives will outdo the negatives especially considering the company’s ability to optimally utilize the current technological innovations in the development of its products and processes. Additionally, the company has well established global brand name, which gives it an added advantage. Owing to its high quality products, an increased number of first class restaurants will be willing to form business partnerships with Giro Food Limited.

 

 

 

 

 

 

 

References

Blanchard, D. (2010). Supply chain management best practices. Hoboken, N.J., John Wiley & Sons. http://www.books24x7.com/marc.asp?bookid=34932.

Bolstorff, P., & Rosenbaum, R. (2007). Supply chain excellence: a handbook for dramatic improvement using the SCOR model. New York, AMACOM. http://www.books24x7.com/marc.asp?bookid=22379.

Chai, N. (2009). Sustainability performance evaluation system in government: A balanced scorecard approach towards sustainable development. Dordrecht: Springer.

Daly, J. L. (2002). Pricing for profitability: activity-based pricing for competitive advantage. New York, Wiley. http://www.books24x7.com/marc.asp?bookid=14002.

Dubrin, A. J. (2009). Essentials of management. Mason, OH, Thomson Business & Economics.

Eastham J, Sharples L & Ball, S 2007, Food Supply Chain Management, New York, PA, Taylor & Francis.

Girofood.com. (2016). Giro Food Ltd : Pioneers in Food Service. [online] Available at: http://www.girofood.com/ [Accessed 8 Dec. 2016].

In Ramanathan, U., & In Ramanathan, R. (2013). Supply chain strategies, issues and models. London : Springer.

Tang, C. S., Teo, C.-P., & Wei, K. K. (2008). Supply chain analysis: a handbook on the interaction of information, system and optimization. New York, Springer.

Worley, C. (2016). Organizing supply chain processes for sustainable innovation in the agri-food industry: volume 5. [Place of publication not identified], Emerald Group Publishing.

http://extension.missouri.edu/foodsystems/tiers.aspx

 

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