Tate and Lyle Company’s Logistic Challenges

Tate and Lyle are one of Britain’s oldest brands and best known for their sugar products such as Golden Syrup and Black Treacle. Their largest refinery is in Silvertown, just beyond City Airport. The refinery processes 3,500 tons of raw sugar cane every day, which is transported by ships that arrive at their dock every week, requiring the co-operation of the Port of London’s tugs to ensure their safe navigation of the Thames. The Silvertown Refinery is just one of the stages in the process of getting Tate and Lyle products from the field to the table and thus coordination of their activities involves a lot more than seeing the ships safely into their docks. In the effort to ensure that goods move from one point to the other, Tate and Lyle Company utilize the workings of supply chain and logistic company and outsource others and as a result, they encounter numerous challenges.

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A supply chain refers to the system of distribution options and amenities that procures goods and transforms these goods into outputs for consumer use, an observation made by Ganesan and Harrison (1995).

Tate and Lyle’s logistics may be enjoying growth based on the economic development of the country, conversely, there exist several challenges on prospects ranging from structural tribulations to legislative inadequacies. This has led to the company outsourcing some of its logistics requirements to other companies such as Abraham Lyle and sons limited the following are the major logistic challenges facing Tate and Lyle.

Britain is indeed one of the states with an excellent infrastructure system, despite the large projects being undertaken by the company; the infrastructures connecting the Silver town Refinery’s upstream supply chain and the next tier downstream to the company are insufficient. There are complaints about the lack of integration of the logistic sector and information technology this slows down the logistical operations of the company.

The logistics market in Britain is highly regulated and the rate at which it is opening to world competition is very slow. The regulations are imposed by the state at different levels and that these regulations vary from boroughs thus hindering the sufficiency of the networks.

The boroughs control every activity in Britain and getting the go-ahead for any logistic depends heavily on the strength of the networks with the state bureaucrats. still there exist some underlying degree of cronyism, which demands that companies should build some paramount links with their boroughs.

Most industries in Britain including Tate and Lyle have concentrated on production and marketing while ignoring the important role that is played by the logistic department and as a result, they hold very few workshops and training on the same at a practical level. They have not realized the importance of acquiring new techniques in logistics and supply. In compound with the government, failure to implement strategic regulatory authorizations to promote this program has led to inefficiency in the sector.

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In addition, there is unreliable information and communication system outside the logistic centers the IT standards in the sector are low and the integration of the system with the pieces of equipment is poor.

The British logistic industry is fragmented and dominated by goods and poor quality transport standards and warehousing infrastructure this, in turn, provide a little base in building a world state industry.

On the other hand, the cost of transporting materials in Britain is high due to high tools levied on roads also other logistic costs such as warehousing, and distribution charges make the whole process expensive to most companies including Tate and Lyle.

Most stocks are damaged or get lost due to poor warehousing facilities for example it’s estimated that over 20% of the Tate and Lyle sugar spills every year due to poor handling and management.

In Britain, there exists an economy that is characterized by a wide variance in development. This in turn is a barrier to distributions there exist a major imbalance of goods flow hence increasing the logistic cost.

Domestic taxation has also proved a challenge to most companies in Britain including Tate and Lyle this is because goods are subjected to unofficial borough border taxes. This is particularly evident when moving the goods from the upstream to the downstream.

In the effort to curb the challenges Tate and Lyle and other equal companies have been forced to be reluctantly resulting to drop in sales.

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Tate and Lyle have also been involved in advocacy to push the government towards reducing taxes.

Through the organization of logistic providers, the organization has submitted grievances to the government on the state of the logistic sector. This is aimed at highlighting the acts that stress the industry and for the government to interfere and this includes the domestic tax that is imposed on inter-borough movement.

The company recently introduced the bi-annual workshop and training for its logistic professionals this is aimed at equipping its staff on the modern logistical techniques.

In addition, the company has greatly considered the cost of the materials they are considering outsourcing cheap materials and services to maximize profit.

The company has also cut down its investment in the same logistic and chain supply until the 2011 anticipated economic recovery.

Tate and Lyle are also investing a lot in market surveillance and legislation to abide by the state laws on noise and exhaust emission this in turn will reduce the penalties that increase the logistic costs.

Recently the company embarked on investing in information technology integration with its warehousing infrastructure this includes the reconstruction of a modern state of art warehouse fitted with complex modern folk lifts this is intended to reduce the spills of the sugar due to poor handling and mismanagement.

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The company with other companies has also written to the government to prevent unfair competition from non-compliant companies and products. With this, the company expects to recover from the global logistic challenges as the economy recovers probably by an introduction and use of mass customization in their effort to reduce production costs and increase the production rate. Unfortunately, companies that have practiced monopoly end up facing turf wars when rival companies put their act together. Price wars intensify leading to loss of revenue and decline of quality and profits as the companies try to edge out each other. This denotes constraints in the business environment often triggered by monopolistic practices.

The theory of constraint highlights that organizational achievements are tied up to some small constraints and that there always be a constraint in an organization. A constraint is any barrier towards the achievement of the organizational goals this can be reviewed as challenges facing the organizational development. Constraints can be internal or external at times the market may demand more from the organization than it can deliver this such a constraint can only be removed using mass customization a trend that Tate and Lyle should utilize.

On the same note, an external constraint occurs when the company produces more than the market can accommodate. According to Department for schools, children, and families, (2010), the lack of continuous training of the staff in the logistic sector is a problem that gradually brings down the level of efficiency enjoyed by the company. Another drawback is the poor equipment, state policies, and insufficient warehousing system. These are some of the challenges that contribute to the internal constraint of the company. This theory best explains the logistical challenges facing Tate and Lyle, that the organization needs to identify the constraints, decide on how to exploit the constraint to the company benefit, and direct all the decisions in the organization towards removing or changing the constraint. That an organization must remove a constraint if it has to acquire maximum achievement scholars refers this to as the process of ongoing improvement.

Mass customization refers to the application and use of a computer-supported manufacturing system to produce customized products, the system is flexible and reduces the cost of production. Chase, Jacobs, and Aquillano (2006) argue that ‘mass customization is a method of effectively postponing the task of differentiating a product for a specific customer until the latest possible point in the supply network.” Other supply chain scholars define mass customization as the production of customized products to suit clients’ needs at the lowest possible production cost.

The concept of mass customization has succeeded mostly in the electronic manufacturing industry and the service industry such as the call centers. There are four major types of mass customization namely collaborative, adaptive, transparent, and cosmetic customization. Tseng & Jiao (2001) suggests collaborative customization as a measure, which is a situation where the client is asked to provide information about how he or she wants a product to be like to serve his or her needs; adaptive customization involves the production of standardized outputs for the clients to make any necessary adjustment on their own. Transparent customization involves giving clients goods that are customized without informing them that they are customized while cosmetic customization involves the production of the same products but marketing them in a different unique manners as projected in context by Duarte (2001).

Aquilano (2006) explains that mass customization has more advantages than disadvantages Tate and Lyle utilization of this concept will see them utilize on the available market by maximizing clients satisfaction.

The utilization of mass customization will see the company cutting the cost of inventory and materials this will be possible by ensuring that goods reach the market on time and that production will be less expensive. Here, reorganizing the efficiency code of ethics is a great way to make gains inefficient. Noguchi and Hernandez-Velasco (2005) point out time saved as essential, and that it can help the organization realize more value in sales due to timely delivery and faster sales, especially if the demand is high and the supply speed meets this demand.

In addition, they will benefit since they will produce on orders thus reducing the warehouse cost and other related expenses.

Through mass customization organisations such as Tate and Lyle will adapt to different demands quickly hence reducing the costs due to delays.

Mass customization will also enable Tate and lye to supply in full time at the lowest possible cost thus lowering the inventory risk.

Tate and Lyle are one of the oldest brands in the United Kingdom producing sugar can use mass customization to their advantage. Mass customization can be used in the packaging of sugar process and use of customized folk lifting, they can also apply the concept in the packaging branding, and weighing this will highly decrease the cost of their products and increase the production rate.

Adsit (2009) observed that today, corporations are facing multifaceted problems. The need to adjust to new technology to have efficiency maintained is becoming compulsory. Supply chain management is an important area of management. It is a core process in customer-driven markets. Many organizations are struggling to adjust to demands, from both consumers and the changing business environment. Core processes require transitional change. This is a shift from traditional ‘supply chain management practices to modern-day practices. This is achieved through the incorporation of strategy and technology.

Production rate is also becoming a problem. Pine (1992) points out that to meet the increasing demands for products, companies are trailing their competitors to survive tides and meet the challenges of production. Again, technology comes in handy to resolve such a business impasse. It is all about the management policy backed by good practices and good knowledge about how to drive an organization to the next level of growth that facilitates the transition from slow production to efficient production. As such, as argued by Dawes (1994), good knowledge of management practices and technological needs can go a long way to make an organization function efficiently.

Reference list

Adsit, D. (2009). Mass Customization and the Transformation of the Call Center Industry. Web.

Aquilano, J., Chase, Jacobs (2006). Operations Management for Competitive Advantage (11th Ed.). New York. McGraw-Hill/Irwin.

Dawes, J, et al (1994). A Review of Strategy Typology, Southern Marketing: Theory & Applications AMI, Australia.

Department for schools, children, and families, (2010). R11- Brief guide to the financial management competencies needed by School Staff. Web.

Duarte, J.P. (2001) “Customizing Massachusetts Institute of Technology Mass Housing: a discursive grammar for Siza’s houses at Malagueira”, Ph.D. Dissertation.

Eliyahu M. (1984) the goals, New York, York press.

Ganesan, R & Harrison, B, (1995). Introduction to supply chain and logistics. New York. McGraw-Hill.

Noguchi, M & Hernandez-Velasco, C.R., (2005). “A ‘mass custom design’ approach to upgrading conventional housing development in Mexico”. Habitat International press. 29(2) p 325-336.

Pine, J (1992). Man Customization: The New Frontier in Business Competition. Harvard Business School Press, Boston, MA.

Tseng, MM & Jiao, J. (2001) Mass Customization, in G. Salvendy (Ed.) Handbook of Industrial Engineering, 3rd edition, New York: Wiley, pp. 684-709.

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