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1)    Executive Summary-

ABC Fertilisers Limited is a proud Australian company and a leader of WA fertilizer industry which has been operating from the past 80 years. ABC Fertilizers Limited, one of Australia’s prominent fertilizer Production and Supply Company, has its legacy running since the 1920’s. The company uses supply chain management processes to compete with uprising customer seasonal demand for fertilizer, and achieve competitive advantage in the industry. The report brings forth the challenges faced by the company in various operational, functional, administrative and sales sectors both within and outside the company. After the boom of Globalization, supply chain management has become a vital part of any business which uses logistics and have complex operations. Supply chain management (SCM) is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. The report describes the various challenges faced by a company such as the logistics, Inventory, Operations management, Procurement process, Warehouse Management etc.

The report consists of the evaluation process of the performance of the supply chain management. The performance can be evaluated by the company with the help of quantitative and qualitative measures. The evaluation will help the supply chain company to overcome the poor performance. The performance measurement criteria consist of the customer satisfaction, supplier performance, integration of material flow and the information. The performance is also evaluated on the basis of finance of the company as well. It is analysed that the performance evaluation helps in further improving the strategies of the company for the better competitive advantage.

The report also analyses the strategies that the supply chain Management Company should adopt in order to perform better and improve continuously in the process and procedures of the supply chain management. The report gives the structure, benefits and the limitation of different strategies that can be used and applied to the company’s supply chain to improve the quality of the end product and services which will definitely increase the profitability of the company. The strategies explored in the report are lean and agile strategy which analyses the lean management followed by agile management. Next is a logistics strategy where the points are explored on logistic management that the company should apply. The purchasing and the procurement strategies as well as the marketing strategies for the supply chain are also analysed in the report.

It is vital for the company to have sustainability in the global supply chain as it will help in maintaining the competitive advantage. In this report the factors are considered that will help the supply chain in developing and maintaining the sustainability of the company.

2)    Introduction-

ABC Fertilizer Limited is a fertilizer production and supply company in Western Australia. It has its head office located in Kwinana, about 40km from Perth.  ABC’s provides products and services for use in broad acre cropping, livestock, horticulture and dairy operations. The dispatch facilities are located in 4 major centres in southwest of WA – Bunbury, Geraldton, Albany and Esperance. Through both its manufacturing and importing activity, ABC provides a wide range of highly competitive products and services for use in broad acre cropping, livestock, horticulture and dairy operations. In order to maximise the productivity of rural producers. The company had issues related to the logistics, cost of poor quality products and supply and demand of the products. The report is the analysis of strategies of the supply chain management and also the factors that can help in developing and maintaining the sustainability of global supply chain.

3) Problem Analysis-

Structure and the Measures of the Supply Chain Management

1.       Basic Process Overview

The company uses Supply chain Management (SCM) process whose main stakeholders are supplier, manufacturer, distributor and the customers.  The suppliers provide the raw materials to the manufacturer who in turn manufactures the products and sends this along to the distributors and eventually the product is delivered to the customer.

Starting from the suppliers, raw materials are imported that contain 80% of superphosphates, and trace elements and additives make up the rest. The additives may be added by the farmers who have requested the product, to suit his needs.  The goods are manufactured and can be stored in pellets in warehouses up to 2 years. The goods can be sold in either Bags or truck loads.

There is another category of products - Liquid Fertilizers. These are expensive, although easier to manufacture. Unlike dry fertilizers, these can be stored for more or less 12 months.  At the customers end, these are most often mixed with herbicides. These make up the sales for 20%.

Raw materials for products – 350000 tonnes of raw materials (ammonium nitrate) is delivered by sea.  250000 tonnes is produced from single production plant and it takes more or less 9 months from the time of ordering to the time of delivery of raw materials (6 months planning + 3 months shipping time + delay that is caused by mechanical failure or natural hazards).  The company has its own delivery port and ships usual dock once per month.  Raw materials are stocked in warehouses and it is always ensured extra safety supply stock is present to overcome delay in delivery that may be caused due to supply shortage.

Finished goods are kept in Warehouses called “heap”, which may be 100000 tonnes in weight and almost 30m high. From there it is sent to the dispatch centres. Trucks that is ordered by the customers line up in a queue and a measured amount is filled into the truck to be dispatched to customers

Sales – The selling cycle occurs in September. Customers form “contracts” with the company – intension to buy the product rather than commitment to buy it. Additionally, the service provided for ad hoc purchasing of fertilizers is also available

Pricing – there is no retail price, rather a complex formula to calculate the price which has current production run, time of the month, produced amount purchased, etc., as factors. This shows customers changing costs of production and distribution and also benefits from the fact that prices are not easily discernable.

Contracts- T

Understanding the problem-

• All managers are concerned about the information systems, which are only linked by monthly reports.  Spreadsheets are very wide spread and seen as vital to allow each part of the business to function.

• Dispatch is unhappy about the new distribution network.  Delivery times are long and stock needs to be moved too often.

• The current information system is considered obsolete and is not supported by the manufacturer any more.

• Hardware and communications infrastructure is out of date

3.1 Structure of the Supply Chain Management

Supply Chain management is the integration of supplier, manufacturer, distributor and the customer. The supplier sends the raw material to the manufacturer who in turns manufactures the products and then sends the delivery to the customers.

ABC is one of the biggest manufacturers and suppliers of fertilizers in Western Australia and the production and processing of the fertilizer is one of the largest. (Green, N. M. (2004). The market of the fertilizer is so big that they export the fertilizer to all Western Australia and some outside Australia too. (Henry & Rothwell (1995). Fertilizer productions have gone up in the Western Australia as the consumption of fruits and vegetables has up in the Country. The number of small manufacturing enterprises (SME) is still large in number throughout the supply chain. The firm is considered as small manufacturing enterprise if the number of employees is less and therefore the number of SME are more as they have around or more 100 employees.The competition in the market is high as there are large enterprises that have almost 90 percent market share in Western Australia. The fertilizer market in Western Australia has more profit as compared to any other state. (Beamon, BM (1998). Also the raw material in the fertilizer processing is cheaper. The size of the enterprises is small yet the number is more. Therefore, the competition in the market is tough. (Wijnands, Meulen & Poppe (2007). Also, the company is providing custom fertilizer which can be prepared as per farmers need to the market hence the fertilizer sold is comparatively more. It is very important for the supply chain management to have their own transportation so that they do not rely on the outsourced companies. The supply chain management is based on the demand management. (Buhr, B. L. (2003). As mentioned earlier, the demand of the fertilizer is high therefore it is vital for the company to cope with the demand and supply management in order to sustain in the market.

3.2 Measure the Performance of the Fertilizer Supply Chain management

ABC can evaluate the Supply chain performance in terms of Quality and quantity and following parameters can help in evaluating the supply chain performance for the company:

3.2.1 Qualitative Measures would include the following:

Supplier Performance: it is important for the company to have the supplier who is efficient and have good time management. Apart from this the relationship between the supplier and the company is also important. (Sadler & Hines (2002). It is important to have good relationship between the fertilizer supplier and the fertilizer processors.

Integration of material flow and the information: In the company the supply chain management should be able to communicate the information correctly and also the transportation of materials should happen smoothly. (New, S. (2004). The information exchanged should be accurate, adequate and timely.

Risk Management should be effective: another way in which the company can evaluate the performance is by the risk factors minimization as there are number of risks involved in the supply chain. If the risks are managed properly, they increase the sustainability of supply chain in the market. (New, S. (2004).

Satisfied Customers: Customer plays an important role in the supply management as the end product goes to the customer. They should be happy and satisfied with the end product and also the services. (Chen, IJ & Paulraj, A (2004). The customer satisfaction can be divided into three elements like before transaction satisfaction, satisfaction at the time of transaction and satisfaction after the transaction. The customers who are satisfied will give more business.

3.2.2 Quantitative measure would include the financial and non financial performance measures like:

• Many managers complain that the whole business revolves around the production process.  Production point out that this is because they make the product and without them there would be nothing to sell.

• The CEO is concerned with falling market share and attributes this to improving quality from competitors, and a higher cost base for ABC.

The non financial measures will include the level of customer service, level of inventory and utilization of resources. (Slone RE. (2004). Also the waste management is one of the evaluation factors in the manufacturing industry and especially in fertilizer supply chain.

The financial measures check the performance of the supply chain on the basis of maximum profit and minimum loss. (Henry & Rothwell (1995).

4. Supply Chain Improvement Strategies

It is vital for the supply chain to deliver and prepare the new manures at the perfect place and at the correct time keeping in mind the end goal to pick up the opposition advantage and furthermore it is critical for the survival consequently there is a need of techniques and their application. Once these methodologies are comprehended by the organization then just the utilization of inventory network will be effective. The systems that can be connected to enhance the production network in the ABC incorporate the accompanying:

4.1 Lean and Agile Strategy to the Supply Chain: Leanness is used in the supply chain in order to increase the performance and improve the performance and also helps in competitiveness in the market. However agile is the next step to the leanness, which needs to be applied after the lean. The lean and agile together form leagile supply chain where they both are beneficial to the company and especially in the fertilizer supply chain as all the parts of the fertilizer can be used. The wastes of the lean production are essential for the agile production. Therefore, both of them clubbed together can be capitalised.

Benefits:

•The use of lean and agile in supply chain of the organization will lessen the work time as the organization will give careful consideration to the esteem added work and less to the non-valued work.

•The quality and nature of work is increased as the wastage is less and the esteem included exercises are amplified

•It additionally facilitates the constant change of the nature of item and services.

•Competitive favorable position is managed as the use of agile and lean will build the profitability of the organization.

Limitations:

• The training cost will be high.
• For lean and agile application, it is important to have skilled labour.
• Efforts for improvement have to be made at all level in supply chain.
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4.2 Logistic Strategies: The way to accomplishment of the supply chain is specifically identified with the logistics of the organization. In this way it is crucial for the organization to have a strategy set up. It is vital for ABC to settle on the choices deliberately on the logistics. The methodologies should be moved toward the premise of dissemination focuses, transportation modes that the organization will utilize.  The organizations like ABC uses more vehicles of the consumer or a third party as it is more practical. It is essential to pick the right 3PL as logistics is the imperative piece of the production network. On the off chance that required, the organization can change the outsourced calculated organization and can get the new strategic organization. The organization ought to check for the offices offered by the strategic organization, innovative progression of the organization, the organization's storage room and furthermore if the 3PL is fiscally solid.

Benefits:

• It is good for the smaller enterprises to have 3PL as it eliminates the investment in the logistics.
• Access to the resources, processes and technology increases.
• Customer satisfaction is increased.
• Logistics cost as well as the logistic operations can be identified clearly.
• With the 3Pl there is a possibility that they are flexible to the changing market trends.( Lummus, Krumwiede & Vokurka (2001).

Limitations:

• Because of the distance between the clients, the human touch is missed.
• It is the possibility that there is the difference in opinion and perception of the third party provider.( Heizer, J & Render, B (2005).
• Logistic functions are not controlled.

4.3. Purchasing and Procurement Strategies: Purchasing and procurement plays a vital role in the supply chain. The reduced rates of the raw material can increase the margin of profits in the end product that is fertilizer. If the fresh fertilizers are purchased as considerable prices, it is apparent that the profit will be more and this will increase the competitive advantage of the company. Also, it is very important to have the clear objectives for the purchasing and the procurement. (Lummus, Krumwiede & Vokurka (2001). Purchasing is related to the raw material purchase from the farmers and the procurement is related to the outsourcing companies. Total Quality Method (TQM) should be adopted by the company here the vendor provide the services and the products with zero defect and error. (Hitt M, Boyd B, Li D. (2004). The purchasing department should have a mix of farmers who supplies fertilizer so that the optimization is more.

Benefits:

• If the purchasing and the procurement strategies are followed, it is apparent that the operation cost will reduce as the purchase of the raw material will be at low price.
• The service quality is improved if the strategies are followed.
• The supplier relationship with the company will be stronger if both the departments will work effectively. (Hitt M, Boyd B, Li D. (2004).

Limitations:

• If the purchase strategies are wrong then the possibility of increased inventory will increase. In the industry of fresh fertilizer the company cannot afford to have more inventory as it will affect the business and the profits. (Wagner & Kaufmann (2004).
• Similarly, the procurement department made the contract without evaluating the third party can bring trouble to the company.

4.4 Marketing Management Strategies: The marketing strategies of the company should include the customer value, customer value delivery and customer value delivery process. (MacIntosh and MacLean. (2001). The strategies should include the understanding of the customer and their needs and requirements.

Benefits:

• Brand recognition is developed.
• The company will have a roadmap to reach to its targeted customers.

Limitations:

• The challenge is to understand the customer’s requirements and delivering the products with the consistency.
• Another limitation is the delivery of fresh fertilizer as requested by the customer; this could be affected if the logistics are not in place.

5) Strategy Implementation:

The globalization had influenced the routes in which the organizations were overseen deliberately and furthermore operationally. In spite of the fact that the globalization of supply chains has happened, the dangers and difficulties have risen for the same. The hazard begins at the low quality of the item and closures at the supply diversions. (Meyer and Cramon-Taubadel (2004). To add to these dangers are the political, social and the ecological issues which emerges because of the work procedure. The issues and the effects that are considered fluctuate from waste diminishment, recuperation of the items, working conditions, youngster work. (Handfield, Walton, Sroufe and Melnyk 2002). The organizations that neglect to addresses these social and ecological issues rendered themselves in operational dangers. (Samaranayake P (2005). It is imperative to have a worldwide store network in the organization that can manage the opposition in the market. The manageability can help the organization in reacting to the requests of the clients, can confront any supply diversion and can moderate the dangers. Keeping in mind the end goal to manufacture a supportable inventory network it is vital to take after the structure that includes three stages. The means included are recognizable proof of the inspirations, evaluation of levers and change of practices. (Corbièr-Nicolliere, Ferrari, Jemelin, and Jolliet (2003).

• The CEO is concerned that his team aren’t working collaboratively.  They all seem to be self-centred.

Distinguishing proof of Motivators: It is essential to recognize and address the social, political and natural issues in the organization's store network. Once these issues are comprehended, it will be anything but difficult to set the objectives and organize the work. The reasons that are refered to are right off the bat the clients, as it is basic for the organization to hold the client by giving the final results on time and of good quality. (Lee HL. (2004). Second is the consistence that is comprehend and taking after the tenets and controls and furthermore the administration laws. Third is the cost that is most extreme profitability by right acquiring, relief of dangers and the productivity to perform. Fourth is the upper hand, with a specific end goal to have supportable production network, it is basic to have an upper hand over alternate contenders. (Davis and Spekman 2004). Fifth is the still, small voice that is the organization ought to take after the qualities and center standards of the organization.

Evaluation of Levers: There are add up to seven levers that can help the organization to create and keep up a supportable production network. (Wawszczak, Hermans and Cesati, (2003). These levers are isolated into inside and outside levers. The inward levers incorporate reason, arrangement (the approaches ought to be all around reported and conveyed generally to the representatives) and individuals and the outside levers incorporate associate, accomplices, open strategies and the power.

Change of practices: this will incorporate set of accepted rules foundation, getting the outsider accreditation, determination of the providers and observing of the providers.

Figure 1. Building up a Sustainability of Global Supply Chain

Making the desires genuinely: It is fundamental for the organization to improve the capacity of the organization keeping in mind the end goal to anticipate the issues and the difficulties which may emerge in the production network. (Keeping an eye on, Baines and Chadd (2008). This should be possible by examining the issues identified with nature. Additionally, include the partners while making the code of behaviors so that the approaches are more improved as far as specialist and appropriateness. It is essential to welcome the providers to the organization and have discussions with them. Attempt to figure the social and social issues if any with the provider.

Choice of the Supplier: it is imperative of the production network to have the providers on the rundown. Additionally, the organization ought to less depend on them and focus more on the conference of the provider and furthermore the improvement. (Fisher, M. L. (1997). It is basic for the organization to have point by point enter execution markers in interview with the provider. These KPI's ought to be benchmarked to the providers and furthermore inside in the organization for later investigation.

Provider's Evaluation and the Development: It is critical to illuminate the providers of the desires that is whether they are met or not. (Delgado, Narrod and Tiongco (2008). The providers ought to be assessed on the premise of meeting the due dates and preparing the work.

Learning and Improvement: advancement of straightforwardness and furthermore the responsibility is critical in the inventory network. The organization's execution ought to be checked on the premise of practices of administration and furthermore the desires. (Godfrey PC, Hill CWL. (1995). It is basic for the organization to constantly enhance their store network rehearses through the correspondence and taking the quality measures.

6. Conclusion

In the above report, the analysis has been made on the strategies and there benefits and limitations. It is analysed that it is vital for the company to have the good strategies if they want to maintain their sustainability in the competitive market. The approaches to the application of the strategies are in concern with the fertilizer company that is ABC. It is analysed that the company should use these strategies in order to maintain and improve the performance of the supply chain and also develop and maintain the sustainability of the supply chain. If these factors and approaches are applied by the company, they would be able to reduce the cost of the productivity and also meet the customer requirements. Company will also be able to enhance the logistics for the company and for the distribution system. The strategies for the operations will also help in the supply and demand management.