Supply Chain Problem Essay 1

SUPPLY CHAIN PROBLEM ESSAY

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 Supply Chain Problem Essay 2

Definition of Problem

Administrators have been challenged to create streamlined international supply networks

sturdy enough to resist a particular amount of volatility. Few foresaw the months of impaired

manufacturing and circulation that ensued with the COVID-19 outbreak. In their US corporate

filings, several prominent corporations stated the measures they utilized to maintain abreast sales

and manufacturing during the epidemic (Silver, 2021, Pg. 1). Those techniques include

generating more highly popular items, growing online selling to customers, acquiring alternative,

local vendors of components and containers, and introducing flexibility into their supply

network. Food corporations such as Kellogg Co. had to pivot from supplying large amounts to

institutions and eateries to feeding those remote workers who unexpectedly had time for

breakfast. Obtaining adequate cardboard wrapping for oatmeal boxes was a challenge.

Packaging created a constraint when the Korean zone provider ran short owing to

shipment difficulties induced by the COVID-19 outbreak. The purchasing team "combed the

globe" for a potential supply of paperboard and located an alternate supplier near neighbors in

New Zealand (Silver, 2021, Pg. 32). Reduced shipping expenses assisted in making up for the

greater payment of the New Zealand paper pulp. With households remaining home and

restricting shopping excursions, the epidemic boosted Kellogg's oats, ramen, and confectionery

revenues. For the transnational, meals eaten at residence more than compensated reductions in

on-the-go outlets. While development had reduced by September, Kellogg's gains throughout the

initial nine months of 2020 grew 7 percent over the year-ago period, to $10.5 billion, discounting

the impacts of divestments and exchange rate variations.

Supply Chain Issues Highlighted in the Problem

 Supply Chain Problem Essay 3

The recent pandemic has taught several global institutions the significance of demand

management. Demand administration is the supply channel planning technique that matches the

consumers' demands with the capacities of the delivery network (McHugh, 2021, Pg. 16). With

the correct procedure in place, leadership can align supply with demand preemptively and

implement the strategy with minimum interruptions. The approach is not restricted to projecting.

It comprises coordinating supply and consumption, enhancing adaptability, and lowering

unpredictability. Before the worldwide epidemic, consumable packaged products organizations

traditionally regarded supply network-oriented operations via a price center viewpoint lens

(Russell & Swanson, 2018, Pg. 31). This is an enterprise that was encircled by dissident

capitalists pursuing the upcoming age of development but at the same moment enhanced rewards

and improved short-term profits for investors.

A third dark cloud encircling this business was commonly nicknamed the "3G Effect",

which became the existence of 3G Capital's Kraft Heinz acquisition strategy and wrung out all

kinds of expense and the sector enthusiasm of zero-based forecasting and expense management.

That reached a climax in February 2019 after Kraft Heinz disclosed a surprise multi-billion

economic disaster (Glinsky, Chopra & Lücker, 2020, Pg. 4). Five seasons of zero-based planning

extracted a projected $1.8 billion in compounded yearly spending cutbacks. Then, the sector met

the worldwide pandemic and the resultant unexpected necessity to react to substantial

fluctuations in commodity demand coupled with concurrent production network interruptions.

Stay-at-home customers contributed to merchandise demands for basic things via non-traditional

avenues such as internet buying (Milne, n.d, Pg. 21). Restaurant and organizational merchandise

demand were drastically lowered in the early stages of 2020 viral transmission since companies

and eateries were compelled to halt activities.

 Supply Chain Problem Essay 4

In 2021, North America-oriented goods demand originates from both avenues, and firms

such as Kellogg's have been hurt due to the absence of adaptable manufacturing sourcing,

logistics, or wrapping capabilities (Berndt, 2019, Pg. 54). Increased adjustments and complexity

in planning procedures are a significant revolutionary necessity. In other terms, the incidence of

the epidemic and the additional repercussions to high consumption with restricted capability in

manufacturing, logistics, and distribution services demands have curtailed the ability to satisfy

such needs. Simultaneously, expenses are growing, and again, the answer appears to be one of

fiscal reorganization and enhanced performance-related reductions.

While the epidemic has blossomed and faded around the globe, the effect on the

worldwide supply system is significant and continuous, about the chairman of packaged-food

behemoth Kellogg Co. The biggest problem is not creating the fundamental materials required to

produce things. Still, instead of transporting those commodities where necessary, Chief

Executive Officer Steve Cahillane stated in an appearance (Veil & Ambrose, n.d, Pg. 16). There

are restrictions to the number of things firms can create with anything from transportation boards

to truck operators in limited availability. Of Kellogg's greater than fifty worldwide factories, no

single of them has not been touched in some manner or fashion. The CEO named numerous

categories "bouncing up against ability," notably the alternative-meat company Morningstar

Fields, Eggo, and various cereal companies, like Frosted Flakes (Madhavi & Wickramarachchi,

2021, Pg. 18). He added that the firm is still completing its commitments, but it is also increasing

extra manufacturing capability.

Kellogg is one of many packaged-food firms that has witnessed consumption increase

during the epidemic as customers stay home and dine there more regularly rather than eating out.

While the surge has begun to fade gradually, sales remain solid. Cahillane commented after his
 Supply Chain Problem Essay 5

business, which sells Pringles French fries and Carr’s biscuits, announced quarterly revenue that

surpassed analyst forecasts (Borenstein & Kellogg, 2021, Pg. 21). Kellogg currently forecasts

revenues in a band of flat to 1 percent on an industrial footing for the whole year, which

separates things like exchange fluctuations and mergers. That is a tiny increase over the

corporation's previous expectations.

Consumption is still robust, though, and Kellogg is exploring methods to increase

manufacturing capability in defiance of Covid-related restrictions. To establish a new plant in

Poland, the business, which would ordinarily employ a hundred experts on the site, was equipped

to execute most of the operation electronically, utilizing new technical tools (Veil & Ambrose,

2019, Pg. 11). With Latin America's fast development speed, firms such as Kellogg's are always

required to modify their go-to-market approaches and the logistical assets and skills needed to

fulfill end-consumer requirements. As per Victor Muñoz, Kellogg's LatAm's Ongoing

Development Administrator, a specific difficulty was establishing capabilities to complete the

requirements of a fast-changing customer demographic successfully.

One of the primary supply network problems that Kellogg's management group

confronted was if their comparative superiority in production was sufficient to withstand the

pressures from rivals. An examination found that the company internally concentrated on

administrative effectiveness and was not tightly tied to the real company plan (Boon-Itt, Wong &

Wong, 2017, Pg. 21). Consequently, the organization is missing out on possibilities to fulfill the

demands from businesses, shoppers and distribution channels. The findings, founded on the

initial four organizational stages of the SCOR paradigm, Plan, Supply, Build, and Ship, indicated

that the lowest advanced activity in the area was that of preparation. Thanks to Kellogg's

worldwide position, procurement, production, and transportation were all extensively established
 Supply Chain Problem Essay 6

techniques. Still, the scheduling element proved to be the solitary largest cause of inefficiencies

in the dispersion chain.

The issue for Kellogg's was to establish competence to successfully supply the

corporation goods throughout the area to meet diverse regions, varied customer demands, and

various platforms. A TRACC evaluation noted the absence of a defined approach and

connectedness across the different nonmanufacturing operations, most particularly those in the

logistic chain ecosystem (Boon-Itt, Wong & Wong, 2017, Pg. 24). During the change over time,

the LatAm management board, with the distribution network head's exemption, was all

innovative to the Kellogg's company, which meant there were various maturity degrees, varied

aspirations, and distinct experiences. One of the management team's initial problems was the

absence of consumer diversification. The many customer outlets each had to give varied service

standards following a unified burning foundation, profitability development. Having created

internal capabilities on the production side, Kellogg's realized that Agile concepts are extremely

relevant to supply chain management.

Elements of the deployment route map, such as constant development, cooperation,

lowering lead periods in personnel operations, etc., were effectively entrenched, which enabled

the Lean move from production to supply chain very smooth and systematic (Walker & Wilson,

2017, Pg. 56). Consequently, plant service ratings display a significant upward slope, indicating

an average increase of 10 percentage units, with Brazil experiencing a remarkable reversal of

over 50 basis points. The application of the Operational Excellence TRACC fosters cross-

departmental integration and collaboration and guarantees a thorough picture of all procedures

(Walker & Wilson, 2017, Pg. 25). Equitably, the emergence of Lean in organizational systems is

confirming to not only render it more convenient and productive but that it is indeed a vital
 Supply Chain Problem Essay 7

additive in accomplishing a genuinely Lean supply sequence, one where client expectation is

predicted and fulfilled ''on time and accurately'' with lesser overall commodity prerequisites. This

is evidenced by a 94.5 percent decrease in unexpected orders and modification demands over an

eight-week timeframe, including a commitment to financial consistency, value-added

measurements, and transparency of effect to schedules.

Notwithstanding these obstacles, Kellogg's revenues grew 2.6 percent to 3.56 billion

dollars in the latest quarter. Economists had projected sales of 3.43 billion dollars. The modified

net income surpassed forecasts (Shovityakool et al., 2021, Pg. 23). Like in the early months of

the season, household utilization stayed robust, the morning cereal giant stated. Nevertheless,

there has been a progressive transition as customers grew progressively more independent of

constraints: Kellogg's noticed the earliest indications of a resurgence in its out-of-home network,

notably in on-the-go munchies and packed items. Cahillane anticipates supply chain issues to

remain far into 2022 but ultimately subside (Jana, 2021, Pg. 12). That is precise; he added that

there had been no basic shift in global consumption, merely supply restrictions. Therefore, the

firm is betting on sustainable revenue growth of 0 to 1 percent for the whole year, which is a

little rise over the firm's prior prediction.

Conclusion and Recommendations

Kellogg stated in a release that it maintains a duty to its company and customers to

sustain its operations operating with alternative means. It has called in paid staff from the

walkout security service AFIMAC to support activities at the factories. Matching and integrating

monitoring with supplier administration allows both operations to respond to the current

environment swiftly, whether it is a rapid request surge or unanticipated supply interruption

(Kapoor & de Villa-Lopez, 2019, Pg. 12). Demand instability generated by macro phenomena
 Supply Chain Problem Essay 8

such as the coronavirus epidemic impacts every component in the worldwide supply chain, from

primary commodities acquisition to establishing emergency stock requirements to arranging

logistics. A knee-jerk approach for many firms in situations of supply chain interruption is to

deploy a 'firefighting' approach to maintain service standards. Nevertheless, being prepared for

anything implies businesses can successfully respond to crucial occurrences to prevent costly

reactive operations in moments of disturbance. It is thus essential to ensure that all the parts of

your distribution chain jigsaw fit perfectly together.

 Supply Chain Problem Essay 9

References

Silver, S. 2021. How Kellogg's, Nike, and HP handled 2020 supply chain disruptions. Financial

Management. https://www.fm-magazine.com/news/2021/jan/coronavirus-supply-chain-

disruptions-kelloggs-nike-hp.html

McHugh, K., Kellogg Rural Leadership Programme Course 43 2021.

Russell, D.M., and Swanson, D., 2018. Transforming information into supply chain agility: an

agility adaptation typology. The International Journal of Logistics Management.

Glinsky, V., Chopra, S. and Lücker, F., 2020. I am managing disruption risk over the product life

cycle. Foundations and Trends® in Technology, Information and Operations

Management, 14(1–2), pp.101-120.

Milne, Bryan. "Kellogg Rural Leadership Programme."

Berndt, A., 2019. BREAKFAST GONE BAD… the case of Kellogg’s rice Krispies®. Emerald

Emerging Markets Case Studies.

Veil, S.R. and Ambrose, K.L., 3 Exemplar supply chain crisis cases. Crisis Communication,

p.347.

Madhavi, B.R.H. and Wickramarachchi, R., 2021, September. Decision-making models for a

resilient supply chain in FMCG companies during a pandemic: A systematic literature

review. In 2021 International Research Conference on Smart Computing and Systems

Engineering (SCSE) (Vol. 4, pp. 216-222). IEEE.

Borenstein, S. and Kellogg, R., 2021. Challenges of a Clean Energy Transition and Implications

for Energy Infrastructure Policy.

 Supply Chain Problem Essay 10

Kapoor, S. and de Villa-Lopez, B., 2019. Providing sodium information on a restaurant menu: a

case study from Kellogg Ranch part II restaurant. Journal of Culinary Science &

Technology, 17(5), pp.385-414.

Veil, S.R. and Ambrose, K.L., 2020. 16. Fixing the broken link: Communication strategies for

supply chain crises. In Crisis Communication (pp. 343-362). De Gruyter Mouton.

Boon-It, S., Wong, C.Y. and Wong, C.W., 2017. Service supply chain management process

capabilities: Measurement development. International Journal of Production

Economics, 193, pp.1-11.

Jana, P., 2021. Lean supply chain management. In Lean Tools in Apparel Manufacturing (pp.

381-398). Woodhead Publishing.

Shovityakool, P., Jittam, P., Sriwattanarothai, N., and Laosinchai, P., 2019. A flexible supply

chain management game. Simulation & Gaming, 50(4), pp.461-482.

Walker, R. and Wilson, J., 2017. Nokia's Supply Chain Management. Kellogg School of

Management Cases.