Supply Chain Management - Essay Example

Supply Chain Management Introduction Supply chain operations management is a priority management goal. The research delves on United Kingdom Pringles Potato Chips Company’s supply chain. The research delves on the potato chip ingredient environment on the supply chain process. Pringles Potato Chips Company’s fast food entity’s supply chain operations management must ensure delivery of approved ingredients on time. A: Supply Chain for processed Pringles potato Chips Ingredients Consequently, the company adjusts its operations management strategies to fit each unique country market segment (Wisner, 2011). Pringles potato chips are sold in over than 139 countries around the world. The countries include our United Kingdom fast food market segment. Pringles’ food product name came from street of the same name, Pringles Street. Pringles Potato Chips products are included in the global marketing firm’s top selling products. The international firm is Proctor & Gamble, International. The Pringles potato chips products include the Fat-Free version, Hot and Spicy version, Salt & Vinegar version and the Sour Cream & Onion version (Smith, 2006). Ingredients The supply chain activities of some ingredients can be done by buying two or more ingredients from one Pringles Potato Chips supplier. For example, the Pringles Potato Chips Company’s head office can purchase all ingredients from one grocery store. One possible grocery store alternative is Tesco Plc. Tesco Plc is the largest grocery chain in United Kingdom. The company is a multinational entity. The company headquarters is in Cheshunt, United Kingdom. The company ranks 3rd in the global grocery market segment. The grocery chain ranks behind world’s two top grocery chains. The two top grocery chains are Walmart and Carrefour. As a global leader in the grocery market segment, Tesco Plc is a good alternative for the Pringles Potato Chips Company’s ingredient purchase requirements. Tesco Plc has several grocery chain outlets in Asia, Europe, and United States (www.tesco.com). Tesco Plc If Tesco Plc fails in terms of product delivery service, the company can shift to buying the processed Pringles Potato Chips ingredients from one of Tesco’s market segment competitor, ASDA Plc. ASDA is owned by Americans. The company set up its grocery chain in the United Kingdom in order to increase its global marketing presence (MacCulloch, 2008). The company’s head office is strategically located in Leeds. Leeds is within the Yorkshire, England environment. ASDA Plc is the second largest grocery chain in the United Kingdom. The company is owned by the global grocery chain, Walmart. Walmart is the world’s top grocery chain (www.asda.co.uk). With Walmart as ASDA Plc’s parent company, ASDA Plc is a good alternative to Tesco Plc. ASDA Plc is one of the possible alternative investment opportunities. As the top grocery chain in the United Kingdom, the company can easily allocate huge grocery chain store spaces for the Pringles Potato Chips products. With more spaces, the store can afford to allocate more store shelf spaces to sell the Pringles Potato Chips products. With more grocery shelf allocated to the two Pringles Potato Chips products, the current demand for the Pringles Potato Chips products is generate higher and other products’ store there is a higher demand for the Pringles Potato Chips products. ASDA Plc If ASDA Plc fails in terms of processed Pringles Potato Chips ingredient quality, the Pringles Potato Chips Company’s head office should shift to buying the ingredients from Sainsbury Plc. Sainsbury Plc is ranks third in the United Kingdom grocery market segment, after Tesco Plc (1st place) and ASDA Plc (2nd place). The company’s head office is strategically situated in Holborn Circus, London. The Sainsbury spouses, John James Sainsbury and Mary Ann Sainsbury, founded the Sainsbury chain of grocery stores (Plunkett, 2008). The store was set up during the 1800s. With a tried and true grocery chain experience dating as far back as the United Kingdom’s Victorian age, Sainsbury Plc is another good alternative if both Tesco Plc and ASDA Plc do not deliver quality services and high quality products to the Pringles Potato Chips global processed food supply chain, especially within the United Kingdom environment. ASDA Plc has all the necessary expertise to ensure the supply chain connections are not spoiled by the unscrupulous inclusion of horse meat. With the discovery of several hamburger patties being tainted with horse meat, many companies turned to online purchases to promote the produces and services of the companies. In the same light, ASDA Plc will play an important part in eradicating the hose meat scare issue. The people will learn to accept the ASDA Plc and other companies’ explanation that the products, including the Pringles Potato Chips products, are not tainted by the unauthorized inclusion of the horse meat into the final processed food product alternatives. Study of the supply chain for the ingredients found on the list of the selected processed Pringles Potato Chips Products. Processed Pringles Potato Chips ingredients. The distribution and supply chain for each of the components lists is strategically planned. First, the Pringles Potato Chips Company projects the next month’s projected sale of the Pringles Potato Chips products. Using one of the company’s menu choices as basis, the Pringles Potato Chips Company has different projections for each of the future month’s processed Pringles Potato Chips products’ demands. The projected demand is based on the prior month’s average or trend revenues. Supply Chain The owner of the Pringles Potato Chips products brand, Proctor and Gamble, maximizes the company’s supply chain marketing strategy to increase demand for the Pringles Potato Chips Company’s Pringles Potato Chips products. The company uses trains to get the ingredients from the United Kingdom and European Union ingredient suppliers. The company uses the comforts, and timely delivery benefits of the European Union trains to purchase the Pringles Potato Chips products’ ingredients. Proctor and Gamble gets the ingredients by using the trains as an effective delivery alternative (Macharris, 2011). Example to Clarify Issue As an example, the company generates the prior three month’s Pringles Potato Chips product revenues. For the month of May one Pringles Potato Chips Company was able to sell 35,000 processed Pringles Potato Chips products. For the month of June, the Pringles Potato Chips Company was able to sell 38,000 Pringles Potato Chips products. For the month of July, the Pringles Potato Chips Company was able to sell 41,000 Pringles Potato Chips products. Consequently, the Pringles Potato Chips Company should order the Pringles Potato Chip products’ ingredients to supply next month’s projected meal revenues. The same Pringles Potato Chips Company should order ingredients to fill the next accounting period customers’ demands for 43,000 processed Pringles Potato Chips products (Brennan, 2011). Moreover, one order of processed Pringles Potato Chips product is composed of more than ten ingredients. The ingredients include Pringles potato chips contain an estimated 40 percent potato ingredient. The potatoes are dried, shaped, and stored in aluminum foil. The processed potato chips are perfectly stored in air tight sturdy containers. Each container of Pringles potato chips includes an average of four tomatoes. The potatoes are fried at an average of very high temperatures. The other ingredients are corn oil, soybean oil, sunflower oil, starch, flour, salt, maltodextrin, milk and dextrose (Valerie, 2010). Next Accounting Period Further, each grocery chain or other Pringles Potato Chips sales outlet send the next accounting period’s ingredient requirements to the head office of the country where the Pringles Potato Chips products are sold. The head office of Pringles Potato Chips located in each country collects the projected next month’s ingredient requirements from all the Pringles Potato Chips grocery and other ales outlets located in the different states within each country, especially our United Kingdom market segment. The Pringles Potato Chips head office orders the outlets’ ingredient requirements from the different suppliers of each Pringles Potato Chips products’ ingredient (Wisner, 2011). Furthermore, the Pringles Potato Chips Company head office orders the ingredients requirements in bulk from the suppliers. With bulk purchases, the Pringles Potato Chips Company’s head office can benefit from potato chip ingredient suppliers’ volume or bulk purchase. The head office orders the flour requirements from the flour suppliers. The company orders the all purpose potato orders from the potato producers or sellers. The company orders the soybean oil needs from the soybean suppliers. The company orders the salt requirements from the salt suppliers. The company orders the onion powder ingredients from the onion powder ingredient suppliers. The company orders the Pringles Potato Chips ingredients from different approved potato growers. The company orders the garlic power needs from the garlic powder suppliers. The company orders the all purpose flour from the all purpose flour suppliers. The company orders the sunflower oil from the preapproved sunflower oil suppliers. The company purchases the other secret ingredients from the chosen chopped ingredient suppliers (Smith, 2006). Moreover, the head office implements the processing of the purchase documents needed to deliver the processed Pringles Potato Chips products’ ingredient requirements to each grocery or other Pringles Potato Chips products’ store outlets. The head office attaches the ingredient requirements of grocery and other store outlet to the purchase order form. The purchase order request is given to the different processed Pringles Potato Chips product requirement’s competing suppliers. Next, the processed Pringles Potato Chips ingredients’ suppliers deliver the required ingredients to the grocery and other store outlets, especially the store located within our United Kingdom market segment. The Pringles Potato Chips processing company can use its own delivery trucks to deliver the requested processed Pringles Potato Chips product ingredients to the Pringles Potato Chips Company’s sales outlets (Wisner, 2011). When the suppliers deliver the ingredients to the Pringles Potato Chips products’’ head office, the suppliers attach the head office’s purchase order request copy to the delivery receipts. In most cases, the purchases are done on account. This means that the suppliers of the different processed Pringles Potato Chips requirements deliver the ingredients to the Pringles Potato Chips Company’s production plants (Wisner 2011). Pringles Potato Chips Company’s head office warehouse. After the delivery, the ingredient suppliers will bill the Pringles Potato Chips Company for the total delivery amount. After billing, the Pringles Potato Chips store outlets’ head office pays the processed Pringles Potato Chips products’ ingredient suppliers on a later date. The company normally pays the suppliers 30 or more days after the processed Pringles Potato Chips ingredients are delivered to the Pringles Potato Chips grocery and other store outlets (Wisner, 2011). Additionally, Pringles Potato Chips Products’ head office warehouse clerk receives and records the quantity and time of the delivery of the processed Pringles Potato Chips products ingredients. The warehouse clerk signs and receives a copy of the ingredient suppliers’ delivery receipt. The suppliers’ delivery receipts indicate the quantity, date, and prices of the delivered perishable products. The suppliers of the processed Pringles Potato Chips ingredients attach the head office warehouse clerk’s signed delivery receipt to the suppliers’ monthly billing statements. The head office of the Pringles Potato Chips Company attaches the billing statements of the suppliers as basis for payments the company’s liabilities to its value chain ingredient suppliers (Brennan, 2011). In terms of suppliers, it is customary to have an average of three approved suppliers for each processed Pringles Potato Chips ingredient. The Pringles Potato Chips office asks the three competing suppliers bids for each processed Pringles Potato Chips ingredient. The head office’s purchasing manager selects the winning supplier of each purchased ingredient. The company uses established bidding criteria when choosing the best supplier (Brennan, 2011). Further, the winning supplier of each processed Pringles Potato Chips product ingredient is based on preset supplier standards (Brennan, 2011). In one purchase order situation, the winning bidder is the supplier offering the in lowest purchase price. In another purchase order situation, the winning bidder is the suppliers who can supply all the ingredient quantity requirements on time. Often, the winning bidder is the processed Pringles Potato Chips supplier offering the highest quality ingredient at the most reasonable prices. Reasonable prices do not automatic ally mean the lowest prices in the industry. The reasonable prices are those that incorporate the costs and expenses of selling the suppliers’ processed Pringles Potato Chips ingredient products. United Kingdom Food Processing industry’s Fear of Horse Meat To understand the severity of the United Kingdom food processing industry’s horse meat scare, one must delve into United Kingdom food history. Keith Thomas observed that people in the United Kingdom traditionally did not eat beef. However, as the demand for cows’ work in the fields declined, the United Kingdom residents’ demand for roast beef increased (DuBrin, 2009). The people felt that since the cows had been replaced by machines in the planting of food products. Consequently, the people shifted to breeding the cows for food. However, the United Kingdom’s current food culture does not include horse meat as part of the people’s food choices (Fairlie, 2010). McDonald’s Vice President’s view on the United Kingdom horse meat scare to the United Kingdom food processing industry. In terms of United Kingdom food processing supply chain fears, McDonald's fast food chain (United Kingdom) Vice President Warren Anderson insists that the current and future customers of McDonald's fast food outlets should not fear a repeat of the prior horsemeat scare. The vice president indicated that the supply chains of many food companies were found guilty of including horse meat as part of the food product ingredients. Consequently, the food stores selling the horse meat-based products were equally blamed. The stores were blamed for not scrutinizing their supply chains’ operational and marketing strategies. Because of the recently uncovered horsemeat issue, many supply chain partners were investigated for possible involvement in the distribution of the banned horsemeat-based food products. The Vice President delivered his timely reassuring speech to calm the uncomfortable dispositions of the community. The speech was delivered during the final day of the National Farmers’ Union Conference last February 13, 2013 (McDonalds, 2013). However, the current and future customers of Pringles Potato Chips products do not need to fear the horse scare. Each container of Pringles Potato Chips cookies does not include any meat products. Without the horse meat, the current and future customers of Pringles Potato Chips Company do not need to fear that they will follow the same path as other unsuspecting victims of the horse meat incidents. The current and future customers of the company can easily spot whether the horse meat was incorporated into each round container of the Pringles Potato Chips products (Dyer, 2004). Conclusion Based on the above discussion, supply chain operations management must be a top goal of management. The United Kingdom Pringles Potato Chips Company’s supply chain ensures delivery of quality ingredients. The Pringles Potato Chips Company prioritises zero quantity of the dreaded horse meat products inside the potato chip containers. In the United Kingdom and the world, the company having the sole right to manufacture and sell the Pringles Potato Chips products is assured, in terms of increasing the demand for the company’s products. The Pringles Potato Chips Company ensures the banning of horse meat ingredients. Evidently, Pringles Potato Chips Company’s supply chain operations management effectively assures delivery of preapproved food ingredients on time, eliminating the possible infiltration of horse meat into the Pringles Potato Chips products supply chain. References: Brennan, L. 2011, Operations Management, McGrawhill , London. DuBrin, A. 2009, Essentials of Management, South-Western Press, London. Dyer, D. 2004, Rising Tide, Harvard Press, London. Fairlie, S. 2010, Meat: A Benign Extravance, Chelsea Green, London. MacCulloch, A. 2008, Competition Law and Policy in the European Union and United Kingdom, Routledge, London. McDonalds, 2013, Comments from Warren Anderson, VP, Supply Chain, McDonald’s United Kingdom, retrieved April 12, 2013 from Valerie, L. 2010, Nutritional Information on Potato Chips, retrieved April 13, 2013 from < http://www.livestrong.com/article/323047-nutritional-information-for-pringles-chips/ > Wisner, J. 2011, Principles of Supply Chain, Cengage Learning, London. Read More