Supply chain management incorporates logistics interactions taking place within marketing functions including those within production channels. Meaning that Supply chain management incorporates all activities associated with the flow and production process of goods alongside information flow from manufacturer to ultimate end-user. The process incorporates functional activities such as transportation, inventory, and control.
At times it becomes difficult for single firms to control the entire product flow channels from manufacturing to ultimate consumption points. However, activities along the supply chain vary from firm to firm depending on organizational structure utilized, management principles as well as the importance of individual operational activities (Kotler and Keller, 2007).
Business logistics and supply chains are considered vital subjects due to their eminent contribution towards a firm’s competitive strategy as well as revenue collection. Supply chain management usually incorporates activities such as transportation, inventory management, purchasing, warehousing, packaging, and production processes. However, for success to be realized strategic planning and decision making should be given much emphasis. This is since managerial efforts required should enable availing of products and services to customers within the desired place at the right time and in the most cost-effective way.
Logistical activities usually form vital processes within organizations and are a result of the synthesis of many concepts and principles. This document attempts to discuss various elements required to assist in the effective management of Kellogg’s supply chain. The ideas, techniques, and principles presented are considered to be of fundamental importance to business logistics practices. The main focus is on important management activities within the supply chain such as planning, control activities, and interrelated transportation as well as inventory strategies.
In contemporary society production and consumption usually takes place at strategic locations. In some regions like developing countries, efficiency in production and economic standards are considered generally low, such kind of regions require a well-developed and inexpensive logistics system capable of encouraging trade with other rich regions of the world. Also, efficient logistics systems enable the identification of opportunities within the world of business since logistics is known to be at the core of any form of trade. Logistics is concerned with the flow of goods and services from manufacturing to distribution and finally consumption.
Transportation services are considered essential in providing physical movement of products from source to finished products. However, transport can at times be disrupted by a firm’s financial strains and natural disasters making the logistics pipeline appear obsolete. The provision of instant production and timely delivery of goods to customers requires the use of inventories. The extended supply chain incorporates those members of the supply channel besides normal suppliers and customers.
These include suppliers of immediate suppliers or customers buying products from immediate customers. Efficiency information management along these channels enables maintenance of required support of all other logistics activities needed for planning and control. Logistics involves the creation of value amongst customers and stakeholders within the chain of production and supply. Products and services are considered value-less till they satisfy the intended need in terms of time and place.
The percentage of value-added within the supply chain is questionable based on the kind of logistics used. The nature of value-added is dependent on the willingness of customers to pay more for provided products and services. Customers usually expect rapid processing and delivery of their orders, calling for firms to embrace world-class logistics performances within the domestic and international markets. Such demand has made firms to develop global strategies based on product design and availability of low-cost raw materials as well as labor (Kotler and Keller, 2007).
The act of globalization and internationalization of companies usually depends on logistics performance and accumulated costs. However, integration of the supply chain in such circumstances work based on the nature of strategic positioning applied for the organization. Firms target an increase in their profits hence ending up utilizing foreign suppliers and using foreign destinations as motivating factors within the supply chain. However, such outsourcing processes call for high-level management processes on operational costs to add value (Kotler and Keller, 2007).
In this case study, it can be recognized that Kellogg’s spend a lot of resources and time in differentiating their products from those of like competitors within the market. It can be realized that logistics affect vital processes within a firm’s supply channels, yielding different levels of customer services capable of operating in different market segments. Improved operations assist in increasing market share and profits through the generation of higher sales margins.
Kellogg’s case study reveals the nature of value business operations create in products and services. In the manufacturing process, the form value is created in the process of converting inputs to appropriate outputs. Secondly, time and place value is controlled by logistics since it involves efficient flows in transportation, information as well as inventory. Thirdly, possession value is created in the process of assisting consumers to acquire appropriate products and services within recommended segments. Various mechanisms are used to achieve this value which includes; marketing communication mix, pricing techniques, and technical support which are controlled by the management.
The majority of consumers within the current global market, demands quick customized responses. This has seen an increase in the number of automated and computerized systems such as the internet increasing possibilities of delivering goods within the shortest time possible.
However, suppliers within the supply chain should consider offering diversified products capable of satisfying individual customer needs. Concepts of quick responses have been applied in internal activities to meet market demands. It is important for businesses such as Kellogg’s emphasis on marketing and production dimensions as well as other supporting functions such as accounting and engineering. All these areas of operation should deeply consider logistics within every area of operation.
Marketing strategies focus on placing products or services within convenient distribution channels capable of facilitating buying and selling processes. However, differences may occur in operational objectives within marketing and production leading to fragmentation within logistic activities. Responses on the use of integrated marketing and communication mix strategy would assist in creating key responsibilities such as quality control, production planning, and control within various market segments.
Kellogg’s supply chain can be considered an efficient supply chain since uncertainty in demand is catered for by elaborate annual plan they have for domestic and global customers. Each participant within the supply chain is involved in the production process hence has idea about the level of production required for complete satisfaction of the demand chain. Such coordination is considered as one of the factors that ensure successful operation of the supply chain fitting the overall strategy of Kellogg’s.
The company at the same time needs to apply some changes capable of improving crucial activities within the supply chain. Annual meetings schedules are necessary for the purposes of finding solutions to problems faced during the year, hence finding out better plans.
Kotler, P & Keller, K 2007, Marketing Management, Pearson, Upper Saddle River.