International Logistics - Tate and Lyle Report - Essay Example

?International Logistics - Tate and Lyle Report Table of Contents Introduction to International Logistics 3 Purchase Process of Tate & Lyle 6 Information Flow 7 Operation of the Procurement 9 Conclusion 11 References 12 Introduction to International Logistics Global logistics traditionally was not given due attention in context of corporate strategic planning. The reason behind this had been the unavoidable cost that logistic brings to a company. However, in the recent days, with the increasing importance of the global sourcing, the logistics planning is given prime importance. It has been noted that the Chief Executive Officers (CEOs) as well as the Chief Financial Officers (CFOs) of the companies are substantially aware with regard to the rising inventory, increasing level of the working capital, along with missed deliveries and malfunctioning in the lean manufacturing performances. It can further be analysed that all the above can arise because of the poor global sourcing strategies. Therefore, the senior management tries to identify the ways through which the companies can get value as well as competitive advantage from its business (Taylor, 2006). Logistics or supply chain management is based upon two core perspectives. The first idea is based upon the fact that the end product used by the users is the effort of numerous organisations. In this context, the term organisation is referred as supply chain. The second perspective has been the fact that although the supply chain has been inexistence since a long period of time, most of the organisations have not paid due attention towards it and few businesses who have understood the importance of the supply chain have not managed it in a proper way. Therefore, this has led to disorganized and ineffective supply chain. From these two perspectives, supply chain management can be explained as the management of the supply chain activities for the purpose of maximising the value of the customers and thus achieve competitive advantages. Supply chain management tries to demonstrate the efforts made for the purpose of developing and operating a profitable supply chain in the best possible way. It is worthy of mentioning that supply chain management encompasses broad range of the activities such as development of the product, sourcing, production along with logistics and the Information Technology (IT) that assist in synchronisation of these activities. The firms that tend to make up the supply chain are found to be interrelated via physical flow and information flow. Information flows assist the partners of the supply chain to integrate long-term plans and thus monitor the day-to-day flow of the goods, up and down the supply chain. While on the other hand, the physical flow is concerned with the transformation along with movement, storage of the goods as well as services (Handfield, 2011). The report is about the worldwide supply chain management of Tate & Lyle which is one of the providers of distinct and competent ingredients to numerous sectors such as food, beverage as well as other industries. Since the company has a large manufacturing plant and innovative technology, the company is capable of turning the raw materials into competent materials for its customers (Tate & Lyle, 2011). The most innovative tool that the companies can use for the purpose of improving the logistics as well as the Supply Chain Management (SCM) processes is considered to be the electronic procurement. It is the electronic procurement that assists the companies to get rid of the challenges that the industry faces on the regular basis. Through the electronic procurement system the goods and the services can be bought online. It is via electronic business that the procurement process is converted online and thus all the geographically dispersed employees tend to coordinate online (Kothari & Et. Al., 2005). It can be mentioned that for applying the e-procurement solution, great deal of money is required. In the recent times, most of industries are trying to focus upon the cost management techniques and it is e-procurement and information technology that assist the industries to reduce the cost resulting to overall logistics processes. It can be analysed that since Tate & Lyle is one of the pioneers in the food industry, the company’s upstream policy of supply chain states that it is quite significant to have long-term and good relationship with the partners as well as the suppliers. It has been noted that the company adopts group-wide approach based upon the numerous codes of conduct. It is the group-wide approach that assists the company at offering the purchase strategies at all the levels such as global, local and regional. Since the company needs to adhere to the supply chain ethics, therefore best practices are shared among the suppliers of the company. Raw materials such as corn and sugarcane are utilised in numerous products in the company. The people who grow and produce the corn and sugarcane are also known to be the major suppliers and partners for the company. It has been noted that the company has been successful at developing mutually beneficial and long-term association with its suppliers as well who supply the corn and sugarcane. It has been noted that the company launched auditing program in the year 2007 related to supply chain that could assess the environmental, social and ethical performance of the suppliers. Furthermore, through the program the company is capable of locating the shortcomings that the company finds with the suppliers. When it identifies the shortcomings, it tries to improve the performance of the supplier by adopting numerous modern ways. The raw materials are not bought from the farmers or the sugar mills. Tate & Lyle prefers buying the corn and sugarcane from contracting parties that can be either government organisations or it may as well be cooperatives. Supplier-manufacturer association has been developed by the company for its sustainability in the market place. This kind of association helps the company to stimulate the profitability of the suppliers as well as the manufacturers. It has been observed that three mechanisms consist of the supply chain of the company. At one direction is the company’s goods and services, the payments are on the other direction while the information flows on both the directions (Tate and Lyle, 2011). It is the procurement management of the company related to the activities that are engaged for buying the goods and services which plays a noteworthy role in the achievement of the goals of the company. For purchasing the product, the company needs to pass through seven steps. They are gathering of the information, contact with the supplier, and review of the background, negotiation with the supplier, fulfilment, maintenance, consumption, and finally disposal along with renewal (Nagle & Et. Al., n.d.) During the procurement process, the essential commodities are supplied to the business operations and also the money supply is kept into consideration. Purchase Process of Tate & Lyle It has been observed that at Tate & Lyle, the search for the products for fulfilling the requirement of the specific department is done by the purchasing department and the customers as well. In order to purchase these products numerous vendors are invited so that they can bid for the product and thus negotiate in terms of prices with the purchasing department. The prices of the products are preserved in the electronic database by the buyers which are confirmed after mutual agreement. Prior to the shipment of the product, the buyer needs to compare the alternatives that is available with the suppliers and thus the numerous alternatives can be viewed with the help of the catalogues that are present in the internet. The organisation follows strict internal management standards related to the work flow while making any kind of purchasing decisions by the purchasing department. This prevents the company from any kind of discrepancies at the purchasing department. It can be stated that it is quite crucial for the companies to select the right suppliers and thus take into account if they are capable of supplying the product at the right time and place. It has been noted that at Tate & Lyle, the users are capable of purchasing the products online with the help of the electronic procurement system and the suppliers are also capable of transferring and receiving their fund with the help of this system. The company is facing numerous threats in relation to the diverse properties in most of the countries that demands vigorous kind of supply chain management system since there are requirements and issues related to the supply chain. It has been noticed that there was requirement of the integration of e-procurement with the supply chain management system. The company’s electronic technology integration has assisted it to make the procurement process simple. It achieved its goals with the assistance of the software based system. The company has recognised the importance of the automation of the supply chain management system and thus finds electronic procurement as considered to be appropriate. Numerous issues related to the procurement system can be solved with the help of the supply chain management systems. Information Flow Tate & Lyle tries to include in its supply chain management system the information flows to and from the stakeholders. It has been noted that there is proper information sharing procedure via which the information can be shared among all the stakeholders, businesses and the departments of the organisation. Therefore, this process is considered to be quite important for the success of the supply chain management system of the organisation. It becomes quite significant for the company to assess the performance of the supply chain management so that problems can be identified and thus opportunities can be accessed. It is worthy of mentioning that at the purchasing process there is requirement of the quick information sharing process for a successful organisation. It becomes easier for the company to establish good and fast relation with the suppliers with the help of the electronic procurement system. When the incorporation of the electronic commerce and/or the information technology takes place a strong collaboration bridge among the numerous trading partners at Tate & Lyle is formed. Furthermore, such kind of integration assists the company at successfully implementing the procurement management strategy at the company. It has been noted from the annual report that Tate & Lyle has encompassed the concept of supply chain management to a certain level. Since the industry of Tate & Lyle is too disjointed, while the businesses operating in numerous countries of the world at different properties and raw materials being purchased from many suppliers in the market the company are facing the threat related to the procurement management. Therefore, in this regard, the companies supply chain management can be given a deeper thought (Tate & Lyle, 2010). After the implementation of the e-procurement system at the company the leaders of Tate & Lyle have been benefited to a great extent and have thus assisted them in eliminating the challenges that it faced. Since the e-procurement system enables the company to build strong relationship Tate & Lyle is capable of having control over their suppliers and thus uphold the standards of the products. It is through e-procurement system a favourable environment is formed leading to enhanced understanding, collaboration and integration among the members and the suppliers. It has further been noted that with the assistance of the e-procurement system the rate of output has also rose to a greater extent. Customers are responding at a faster pace and thus there has been significant up-gradation in the ratio of delivery. Since the inventory level is liable to be lower, therefore the overall cost of the procurement tends to be lowered. Operation of the Procurement The coordination of the electronic commerce and the information technology along with the procurement operation are performed at numerous modes. According to the researchers, many-to-many mode is considered as public electronic marketplace, while on the other hand, if the operations are performed at one-to-many mode with the assistance of the information technology, then it is called private electronic marketplace. It has been apparent that such kinds of modes have also been applied by Tate & Lyle so that they can form their own electronic marketplace. The internal websites assist its franchises to obtain the data related to their inventories. The significance of such internal websites or the e-marketplace is that when there are multiple franchises of the company and the inventory needs to be utilised of numerous other franchises then this will assist them in saving a great deal of time and thus the franchisees may as well expect an increase in the cash flows (Zoltan Alpar, 2010). Spot/competitive sourcing and systematic/strategic sourcing are two kinds of sourcing strategies. The spot/competitive sourcing is based upon the urgent requirement while the strategic sourcing is based upon the long-term relationship that exists among the buyers as well as the suppliers. It has been apparent from the annual report of Tate & Lyle that it adopts the systematic/strategic sourcing strategy. It is to be observed that while the companies adopt the spot/competitive sourcing strategy, the industry may face the dilemma related to the dynamic behaviour along with the ambiguity in relation to the prices of the products. It is quite significant for the market makers to balance the supply and demand for the products while at their exchanges. It is systematic sourcing that makes it easier to predict the prices of the particular product since a framework is adopted for negotiating the prices among the business partners and the suppliers. By the adoption of the systematic purchasing Tate & Lyle has been capable of forming good relation among the stakeholders of the organisation (Deloitte Consulting, 2010). It is to be noted that because of the electronic procurement supply chain Tate & Lyle is capable of undertaking the upstream supply chain management systems e.g. making orders with the suppliers that needs to be dealt with the internal supply chain activities such as inventory control, scheduling up of the production and cost. Furthermore, this software helps in the downstream operation of the industry such as for sales, billing and delivery scheduling of the customers. Conclusion Most of the organisations are well aware of the increasing competition and success depends upon the incorporation as well as management of business processes among the members of the supply chain. If an organisation wants an integrated supply chain management system then all the activities of the company needs to be coordinated among them. Through innovative technologies companies are capable of integrating the numerous activities. It has been apparent from the overall report that Tate & Lyle is trying its best to enhance its processes at all the levels of the organisation so that it can gain competitive advantage. Tate & Lyle is capable of reducing the cost and thus can enhance their brand by the help of innovative technology in supply chain. An organisation having the e-procurement system needs to provide proper training to its staffs so that the overall efficiency and the effectiveness are enhanced. E-procurement system primarily is quite flexible and can be upgraded as per the requirement of the companies. This tool is serving as one of the significant means of enhancing the overall performance of the organisation. References Deloitte Consulting, 2010. Sourcing & Procurement When Reducing Spend Is not Enough. Assets. [Online] Available at: http://www.deloitte.com/assets/Dcom-Belgium/Local%20Assets/Documents/EN/Services/Consulting/dcom-be-en-sourcing-procurement-reducing-spend.pdf [Accessed August 04, 2011]. Handfield, R., 2011. What is Supply Chain Management? SCM Resources. [Online] Available at: http://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management [Accessed August 04, 2011]. Kothari, T. & Et. Al., 2005. “E-Procurement: An Emerging Tool For The Hotel Supply Chain Management”, International Journal of Hospitality Management. Vol: 24, Iss: 3, Pp: 369-389. Nagle, T. & Et. Al., No Date. The Effects of Business-to-Business Relationships on Electronic Procurement Systems: An Exploratory Study. Abstract. [Online] Available at: http://csrc.lse.ac.uk/asp/aspecis/20060001.pdf [Accessed August 04, 2011]. Tate & Lyle, 2011. Commercial Partners and Suppliers. Tate & Lyle Home. [Online] Available at: http://www.tateandlyle.com/responsibility/pages/commercialpartnersandsuppliers.aspx [Accessed August 04, 2011]. Tate & Lyle, 2011. Our Industry. About Us. [Online] Available at: http://www.tateandlyle.com/AboutUs/ourindustry/Pages/Ourindustry.aspx [Accessed August 04, 2011]. Tate & Lyle, 2010. Annual Report 2010. What We Do? [Online] Available at: http://www.tateandlyle.com/InvestorRelations/Documents/Annual%20Reports/Annual%20Report%202010.pdf [Accessed August 04, 2011]. Taylor, C., 2006. Five Reasons Why Global Logistics is Moving From the Basements to Boardroom-and Five Steps to Transformation. IBM Global Business Services. 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