Thomas Foods International Analysis - Essay Example

ASSESSMENT-#2 REPORT Name Institution Professor Course Date Executive Summary Thomas Foods International is a food manufacturer based in South Africa. The institution engages in the production of fresh, as well as processed meat for both domestic and international markets. The CEO, Darren Thomas, did announce the institution’s collaboration with Thailand-based food giant, Charoen Pokphand Group (CP Group). The purpose of this report is to advise senior management on the implications of the proposed initiative for the company from a supply chain perspective. The report did explore the risks, issues, and challenges of this internalization and implications on the logistics and supply chain aspects for Thomas Foods International. The report did offer recommendations on mechanisms to overcome these challenges and implications of the risks. According to the findings of the research process, execution of the proposed initiative might experience diverse risks such as disruptions, delays, procurement, systems and processes, and forecasting risks. These risks tend to influence the operations or transactions of any business entity through enormous implications on the revenues and profit levels at the end of the fiscal period. It is valuable for the two corporations to consider adopting and implementing diverse mechanisms such as lean supply chain and integrative approaches in harmonizing the operations of the proposed initiative. Introduction Thomas Foods International is a food manufacturer based in South Africa. The institution engages in the production of fresh, as well as processed meat for both domestic and international markets. The organization targets large food retail channels such as Woolworths, Cole, Aldi, and McDonald’s as some of the major customers. Categorically, Thomas Foods International operates four processing plants in Murray Bridge (SA), Lobethal (SA), Tamworth (NSW), and Wallangarra (QLD). From a strategic perspective, these plants focus on the generation of efficiency in the utilization of the Australia’s livestock production system while enabling the firm to maintain its Australian brand, control, and quality of products. These aspects of production tend to adhere to the Department of Agriculture, Forestry, and Fisheries (DAFF) Regulations, as well as Halal accreditation and Meat Standards Australia (MSA) with the intention of accomplishing consistent quality and integrity. In the course of August last year, the CEO, Darren Thomas, did announce the institution’s collaboration with Thailand-based food giant, Charoen Pokphand Group (CP Group). The collaboration sought to enable setting up an additional processing facility in Adelaide. The proposed initiative aims at boosting South Australia’s food industry for export across the Asian continent and the universe. As the supply chain executive, I focused on the development of this report to advise senior management on the implications of the proposed initiative for the company from a supply chain perspective. The report explores risks, issues, and challenges of this internalization and implications on the logistics and supply chain aspects for Thomas Foods International. The report also offers recommendations on mechanisms to overcome these challenges and implications of the risks. Risk Analysis from Supply Chain Perspective Risk refers to the variation in the distribution of possible supply chain outcome, their likelihood, and subjective value (Juttner et al., 2003). From a quantitative perspective, risk refers to the probability of occurrence (loss) and the implications or magnitude of the loss. Supply chains tend to have two types of risks: internal and external risks, which have enormous implications for the logistics and supply chain of the organization in focus. In this section, the focus will be on critical illustrations of the risks in the supply chain, which might relate to the proposed initiative between the two institutions in the midst of globalization. Disruptions Risks In the recent years, supply chains have become longer, as well as more complex, thus, the platform for the increasing severity and frequency of the disruptions in the supply chain management. One of the potential risks, which might associate with this proposed initiative, is the essence of disruption of the business operations between the two business corporations. For instance, issues such as earthquakes and other natural disasters might limit the efficiency in interactions between the two business entities in pursuit of competitive advantage and sustainability in the service delivery (Jüttner, 2005). South Australia and Asian continent tend to operate on diverse labour regulations, which might be a risk in the maximization of the outcomes of the proposed initiative. Another source of disruptions in the delivery of quality services and products is the global acts of terrorism. Effective and efficient planning and supply chain management will have the obligation to carter for potential disruptions in the course of achieving the goals and targets at the end of each fiscal period. Delays Risks Secondly, the proposed initiative might relate to the delay risks, which affect the operations at the end of each fiscal period. In this context, the collaboration might cause the organizations to engage in increased capacity utilization at the supply source causing delays in the delivery of quality services and products. Additionally, the new supply source might associate with issues of inflexibility in addressing diverse demands and expectations of the consumers in the globalized economies (Christopher and Lee, 2004). The increase in the size of the organization through collaboration might associate with poor quality and increased wastes in the delivery of services from the supply source. From a supply chain perspective, the excessive handling and poor quality might be the main contributors to the issue of delay in the provision of ideal services to the consumers. Delays in the logistics might also emanate from the failures of the operations across the supply chain, thus, enormous implications on the operations of the organization. Systems and Processes Risks In the third instance, Thomas Food International and Charoen Pokphand Group will adopt and integrate mechanisms and operations to transform the systems and processes in the course addressing the demands and expectations of the consumers. Nevertheless, these transformations are essential in the course of attracting diverse risks in the supply chains relating to the operations of Thomas Food International (Seuring and Müller, 2008). For instance, the institutions have the obligation to adopt and implement new information and communication infrastructures, which might fail to work effective and efficiently because of the diverse cultural attributes. The two institutions tend to have diverse employees, culture, systems, and processes, which require a substantive level of chain integration. The level of integration of the systems in the supply chain might attract the risks limiting the ability of the institution to achieve its goals and targets at the end of the fiscal period. Forecasting Risks Business comes out as the art of forecasting and maximization of the concept in the course of achieving efficiency, competitiveness, and sustainability regarding the expectations of the consumers and shareholders. Nevertheless, ineffective forecasting can lead to attraction of diverse risks and elements limiting the ability and potentiality of the business entity to achieve its goals and targets at the end of each fiscal period. One source of forecasting risks in the supply chain is the inaccuracy of the forecasts leading to wastes in the utilization and allocation of appropriate resources to address the demands of the consumers (Tang, 2006). Similarly, forecasting risks might emanate from the Bullwhip effect or information distortion to the two business entities seeking to achieve their goals and targets at the end of the fiscal period. Forecasting risks might also relate to the existence of the small customer base regarding the new contextual situation for the proposed initiative. These forecasting risks might affect planning by the organization in addressing the demands of the stakeholders and shareholders within the supply chain cycle. Intellectual Property Risks Similarly, Thomas Food International and Charoen Pokphand Group will have the obligation to adopt and integrate diverse mechanisms and approaches to overcome intellectual property risks. Intellectual property emanates from the information sharing, as well as vertical integration regarding communication among the shareholders and stakeholders. Outsourcing HR practices might also lead to the intellectual property. Intellectual property issues might also relate to the increased cyber-attacks or the security of information (Cooper, Lambert, and Pagh, 1997). Technology continues to play a critical role in shaping the perceptions and decision-making among the consumers in the modern context. Nevertheless, technology associates with the confidentiality issues such as hacking and online frauds. These issues might affect the intellectual property of the proposed initiative concerning Thomas Food International and Charoen Pokphand Group. Procurement Risks In the course of executing the proposed initiative, the two organizations will engage in the procurement or purchasing of diverse equipment for the delivery of the products and services in agreement with the demands and expectations of the consumers. In this context, the Thomas Food International will incur procurement risks affecting the operations of the organization in the delivery of diverse products and services (Simchi-Levi, 2005). One of the potential causes of this risk is the fluctuation in the exchange rates, especially in the globalized economy. Secondly, there might be changes or fluctuations regarding the costs of the major components or raw materials in the execution of the proposed initiative. The plant might suffer from the ineffective utilization of the capacity, thus, limitations in the maximization of the revenues and profit levels at the end of each fiscal period. Implications of the Risks The potential risks from this proposed initiative will generate diverse implications regarding the operations and transactions of the business entities in pursuit of competitive advantage in the market and industry of operation in the globalized economy. For instance, the generation of disruptions from the natural disasters such as earthquakes will lead to the enormous loss of the properties and products of the company, thus, eventual reduction in the volume of revenues. Secondly, delays in the supply chain components will lead to the increased costs of transactions by the organization while causing increased damage on the image and reputation of the firm against major competitors in the industry. Similarly, delays will lead to the inappropriate minimization of the Thomas Food International to adopt and exploit its lean supply chain, thus, inefficiency in the delivery of the products and services to satisfy the needs and expectations of the consumers. In the case of procurement risks, the institutions will have the obligation to incur increased costs in purchasing their products and raw materials in the achievement of the goals and targets of the proposed initiative. This is valuable in the course of influencing the cost of operations, planning, and execution of the plans by the two corporations seeking to maximize the outputs of globalization. The institutions have the obligation of integrating the employees and diverse systems, as well as processes for the execution of the proposed initiative. The approach might associate with risks limiting harmonious existence of the corporations to facilitate the achievement of the goals and targets. Evidently, these risks contribute to the adverse implications on the revenues and profits levels, thus, the need for the organizations to consider adoption and implementation of appropriate mechanisms in the course of addressing the implications or influences. Recommendations In the course of overcoming these influences of stated risks, the institutions should focus on the integration of these recommendations. In the first instance, the institutions should focus on the adoption and implementation of the integrative approach regarding the processes and systems, as well as the culture of the new proposed initiative. In this context, the integrative approach will be ideal in the acquisition of the quality approaches from the two corporations to merge in the formation of a valuable platform for the achievement of success and valuable image (Carter and Rogers, 2008). Similarly, it is valuable to consider adoption and integration of lean supply chain approach by the institution. This will play a critical role in enabling the firm to overcome potential issues such as delays in the delivery of quality products and services to the consumers. Evidently, elimination of the operators or third parties in the supply chain will facilitate efficient movements of the products and services from the companies to the target audiences (Cucchiella and Gastaldi, 2006). Thirdly, there is a need for the institutions to consider integrating effective measures in the protection of the information sharing approaches on the internet platforms. This is through utilization of appropriate passwords for the corporations to facilitate protection of the sensitive information, thus, minimization of the risks relating to the intellectual property. List of References Carter, C.R. and Rogers, D.S., 2008. A framework of sustainable supply chain management: moving toward new theory. International journal of physical distribution & logistics management, 38(5), pp.360-387. Christopher, M. and Lee, H., 2004. Mitigating supply chain risk through improved confidence. International journal of physical distribution & logistics management, 34(5), pp.388-396. Cooper, M.C., Lambert, D.M. and Pagh, J.D., 1997. Supply chain management: more than a new name for logistics. The international journal of logistics management, 8(1), pp.1-14. Cucchiella, F. and Gastaldi, M., 2006. Risk management in supply chain: a real option approach. Journal of Manufacturing Technology Management, 17(6), pp.700-720. Jüttner, U., 2005. 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