Running Head: ASSIGNMENT ACFI 5056 Global Supply Chain Management [Name of the Writer] [Name of the Institution] Assignment 2 ACFI 5056 Global Supply Chain Management Introduction Ferrero is one of the leading brands in the world when it comes to the production of the branded chocolate. Their confectionary products are consumed all around the world. Founded in 1946, it is one of the more enigmatic firms in the world as not a lot is known about their supply chain operations and how they conduct their business. The composition of the company is also interesting as it includes about 38 trading companies. The company is legendary in the way that no other confectionary company has witnessed the same level of growth what is being witnessed by Ferrero. The supply chain of Ferrero will be discussed in the below sections (Myerson, 2012). Upstream Operations of Ferrero When it comes to the management of upstream supply chain management. It deals with the flows of the materials that are used, the way final goods are being looked at. The related information that is needed for the company, resellers and final consumers is also a big part of the management of the upstream supply chain management (Branch, 2009). Locating the Raw Materials In confectionary industry, most of the times, locating the raw material is one of the biggest problems that is being faced. Ferrero at the moment has lot of options that they can really look after when it comes to the management of the supply chain. The cocoa, palm and milk as well as hazelnuts are brought in by the method of the free range (Jacobs et al, 2010). The sugar Assignment 3 that is used is non GM and the palm and oil that is used is brought keeping in mind environmental sustainability. Downstream Operations of Ferrero Coming towards the downstream operations, one of the features of the Ferrero is that there is strict adherence to the regulations during the production process. The company in its production is moving towards generating their own power plant that is enough to take care of their energy needs in a better manner. There is a liquid biogas plant in their facility as well as the bio gas plants (Olson, 2012). With the installation of these things, they have ensured that there would be greater efficiency in their operations (Branch, 2009). Not only that, the carbon emissions in their operations are about 30 % lower as compared to the confectionary operations of a regular plants but at the same time, the efficiency of their operations have increased by 12 %. The only thing that they can look after in a better manner is their waste management policies as this is where there is a lot left to be desired (Cousins et al, 2007). Logistic Partners of Ferrero and Nature of the Relationship As far as the logistic partners are concerned, it can be seen that Ferrero has been involved with some of the leading firms in the world and their relations have been based on providing superior product (Mangan et al, 2011). The hazelnuts are being outsourced from countries such as Italy and Turkey. Ferrero has been involved in number of initiatives around the world, such as being a part of the World Cocoa Foundation as well as the International Cocoa Initiative. They also have certifications from Rainforest Alliance Network. They have also signed with the Assignment 4 Harkin Engal Protocol. What it does is that it protects the human right during the conduct of the supply chain in their general operations (Christopher, 2011). They have also gone in the partnership with the International Labor Office. It has helped them to eradicate child labor in Ghana and other African countries (Sanders, 2011). So when it comes to the relationship with their other partners, they seem to have been managing rather well (Manners et al, 2014). Deal with Hershey’s Another landmark deal for them is that they have got a great supply chain boost last year. This is due to the fact that now they have entered into an alliance with the famous confectionary brand Hershey’s so that they can aid their candy supply chain (Chopra and Meindl, 2012) . At the moment, the arrangement is such that Ferrero and Hershey’s have entered into a warehousing and distribution agreement in Northern America (Cohen and Roussel, 2013). Not only with their combined synergy they are likely to increase their output, but at the same time, it will also give an opportunity for Ferrero to ensure that they further reduce their Carbon Dioxide emission (Chopra and Meindl, 2012). That can be achieved by this arrangement as they would not need lower trips now to reach to their customers. So when it comes to the relationship with their suppliers, Ferrero seems to have ticked all the boxes. Management of the Relationship with their Partners The relationships that have been developed by Ferrero are based on the fact that they are sharing their supply chain processes with their partners all around the globe. What it does is that it adds extra value to their operations and they are able to lower the cost significantly with the help of the cost optimization in their supply chain. Ferrero is not the only company though that has gone into a strategic alliance with their partners (Harrison, 2010). There are many companies Assignment 5 around the world that are doing (Schary and Larsen, 2001). This sort of arrangement are being done around the world to make sure that companies are now looking to improve their efficiency due to the fact that in the last few years, the transportation cost that is related to the supply chain has increased at a drastic pace. This integration of the operations is not only carried out in their international operations. At the moment, the Australian businesses, Ferrero Australia and Ferrero Australasia are operating under the same name at the moment, Ferrero Australia. What Ferrero has done now that they have merged their supply chain operations with these firms as well. This is another example that how Ferrero has been bringing down its cost with the usage of the Supply Chain in a better manner. With the help of this merger, Ferrero would be able to bring together the commercial and manufacturing operations of their company. So that is more or less a key theme in their supply chain relationships and operations all around the world. Assignment 6 References Branch, A.E., (2009), Global Supply Chain Management and International Logistics, Routledge Chopra, S., and Meindl, P., (2012), Supply Chain Management: Strategy, planning and operation, 5th edition, Pearson Christopher, M. (2011) Logistics and Supply Chain Management, FT/Prentice Hall Cohen, S., and Roussel, J., (2013), Strategic Supply Chain Management: The five disciplines for top performance, 2nd edition, McGraw-Hill Professional Cousins, P., Lamming, R., Lawson, B. and Squire, B. (2007) Strategic Supply Management: Principles, Theories and Practice, FT/Prentice Hall Harrison, A. (2010) Logistics, Management and Strategy: Competing through the Supply Chain, FT/Prentice Hall Jacobs, F.R., Chase, R.B., and Aguilano, N.J., (2010), Operations and Supply Chain Management Global Edition, 13th edition, McGraw-Hill Higher Education Mangan, J., Lalwani, C., Butcher, T., and Javadpaur, R., (2011), Global Logistics and Supply Chain Management, 2nd edition, Wiley Manners-Bell, J., (2014), Supply Chain Risk: Understanding emerging threats to global supply chains, Kogan Page Myerson, P. (2012) Lean Supply Chain and Logistics Management, McGraw-Hill Olson, D. (2012) Supply Chain Risk Management: Tools for Analysis, Business Expert Press Assignment 7 Sanders, N. (2011) Supply Chain Management: A Global Perspective, John Wiley & Sons Schary, P.B., and Skjott-Larsen, T., (2001), Managing the Global Supply Chain, 2nd edition revised, Copenhagen Business School Press Waters, D., (2009), Supply Chain Management: An Introduction to Logistics, 2nd edition, Palgrave Macmillian Waters, D., (2011), Supply Chain Risk Management: Vulnerability and resilience in logistics, 2nd edition, Kogan Page
