24 Eylül 2010 Cuma

Kellogg's Case Study

1.Name the three sectors of the supply chain. On what occasions could certain sections of the primary sector operate as retailers?

The three sectors of the supply chain are named as primary sector, which provides raw materials, secondary sector, which manufactures the product and tertiary sector, which provides services.

In general, tertiary sector operates as retailers. The function of this sector is, selling products to the consumers. On the other hand, the primary sector mainly provides raw materials and sends them to the manufacturers. However there are some special occasions where primary sector can operate as retailers. For instance, some raw materials can be sold directly to the consumers, without completing the supply chain. It depends on the raw material. For example, coal can be directly sold to power stations or a fisherman can sell his fishes to customers who randomly pass by.

So in occasions like this, the primary sector operates as retailers.

2. Give three examples of how Kellogg’s demonstrates good supply chain management. How can Kellogg’s make improvements both for its business and for the environment?

Kellogg’s demonstrates an effective supply chain management. The main key of their success is that they work in their specialist area, manufacturing, to provide better products and services to their consumers. However there are some significant strategies that they follow which increase their success. Firstly, they have the right marketing mix. They produce the right product, which covers the needs of the customers. Moreover, they use a system called ‘just-in-time’, which is an efficient stock inventory system. They manufacture limited products to diminish warehousing costs. As a result, they don’t have a stocking problem. Furthermore, to lessen the waste of the company, they use an inventory system named ‘lean production. By the use of this system, they eliminate waste.

3. Why is it important for Kellogg’s to build good relationships with businesses in the tertiary sector?

The tertiary sector is the sector that brings money to the company. After completing the first two steps of the supply chain, they must sell the products they have in order to earn money and add value into their profit. It is essential for them to build good relationships with businesses in the tertiary sector because that is the step where they introduce their products to the world. Public relations are also important. If they are well-liked by the consumers, the tertiary businesses such as supermarkets, shops etc. would like to purchase the products of Kellogg’s, which would certainly help the company to grow.  

4. Evaluate the benefits of large manufacturers like Kellogg’s handing over the logistical side of their business to specialist companies like TDG.

Handing over the logistical side of their business to specialist companies creates an opportunity for Kellog’s to concentrate on the field that it specializes in. Since Kellogg’s is a manufacturer company, which means that their function is to construct products, they must operate on the area where they can do best. Trying to cover all the sectors of the supply chain would distract the company and would lessen the capacity.

1.   After reading this article, I understood that Kellogg’s strategy of only concentrating in it’s own sector is very logical and efficient. However, doesn’t having many companies working for their primary and tertiary sector cost a lot? Doesn’t it affect the profit of the company?
2.   Why doesn’t a huge and successful company like Kellogg’s doesn’t grow in other sectors? 

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