Issue:
The core issue Unifine Richardson (UR) faces is their sole honey supplier, Harrington Honey (HH), will run out of Chinese honey in a little over a month because the Canadian Food Inspection Agency (CFIA) recently found traces of chloramphenicol (a banned antibiotic associated with causing a sometimes-fatal blood disorder) and rejected the contaminated honey. Until China finds a way to detect contaminated honey, Unifine Richardson cannot sell any of its current Chinese-Canadian blend. Because of the CFIA’s findings, the global supply of honey will decrease by 20%, thus causing an increase in price. Harrington Honey will not be able to maintain the honey stream.
The price of honey, globally, has already been on a steady incline
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Additionally, a dual-supply strategy should be considered so that the company can use a hedging tactic to minimize the cost. Unifine Richardson only used one supply source, Harrington Honey. Depending so heavily on one supplier left the company vulnerable to risk. “The best supply chains identify structural shifts, sometimes before they occur, by capturing the latest data, filtering out noise, and tracking key patterns. They then relocate facilities, change sources of supplies, and, if possible, outsource manufacturing” (Lee, 2004). The company needs to look for alternative suppliers that acquire their honey from Mexico. The source location will not have a significant impact in their operations and UR will keep its delivery on time.
It is advisable that the UR purchasing manager contact its large customer to explain the current price increase, and understand what their needs are. The honey is primarily used as a dipping sauce for chicken wings. How critical is this dipping sauce to this customer to justify the 60% total increase? If the customer wants to maintain the honey purchases, or decides to cancel, UR needs to know ASAP. This customer represents 80% of their honey sales and it is possible that they might want replace the honey for a substitute product. For this customer, the honey could be a noncritical item, and might be replaced with salad dressings, which UR has the ability to offer. By creating
There is a growing threat from generic competition due to their global operations that can achieve lower-cost of supplies. Also the threat
Performance cycles can be improved through the use of the 25 percent and 15 percent suppliers. The new suppliers would need to be reliable and punctual. Small deviations create large problems therefore, a higher premium for consistency would be well worth the extra expense in the long term.
Second, always make sure there is an alternative source. As I mentioned before, this is much easier with single source procurement (but not sole source), since other similar suppliers could be able to supply similar products with more or less that same quality as the previous suppliers.
Company X thanks the FDA authorities for their thoughtful observations during the inspection of our manufacturing facility that concluded on 08/xx/15. Corporation X considers these observations very seriously and shall assemble a task force team to take all the crucial decisions to correct deficiencies and ensure public wellbeing. Company X shall initiate product recall on immediate basis, and shall notify consumers, employees, suppliers and regulatory bodies of product recalls as quickly as possible. The Company shall immediately stop advertising the brand. The Company shall prepare a cohesive communication plan by issuing consumer alerts, announcement ads, advising public not to take any kind of Flower Power products. The Company shall remove
The FDA has recently taken action against Sara Lee Company. Sara Lee is known to make whole grain white bread under unsanitary conditions. The company fails to comply and was warned previously about global free trade when a loaf of Sara Lee whole grain white bread contains ingredients from India, the Netherlands, China, and Switzerland. Along with honey from either Vietnam, Brazil, Uruguay, Canada, or Mexico and wheat gluten supplied by France, Poland, Russia, or Australia. However, Sara Lee did not comply and the FDA has taken actions to protect public safety by filing a complaint against the company. According to Halbert & Ingulli (2012) after consideration of tort and class action suits we turn to the warranties made under the Uniform Commercial Code This is in response to past complaints and to prevent further health issues
The second main issue to consider is whether to source in Hong Kong or China. Sourcing in Hong Kong provides Wally more flexibility because its minimum order quantity is 600 units compared to 1,200 units in China. The ability to order fewer units allows Wally to order units in a less risky manner. In either case Wally orders combinations of products so that he minimizes the chance he'll order too much of any one product. Lower minimum order quantities allow Wally to order lower amounts of more products. Since he believes he will sell many of each product, enough to cover the minimum order cost, Wally can lower
However, regardless of its advantage, sole sourcing of supply is usually considered as risky decision since the company has to rely on the sole supplier. Therefore, it may result in a catastrophic event which is delay in shipment or stop production if the sole supplier has problems in terms of producing machines. Also, the supplier may become complacent or financial problems may occur if ACE increases the cost of production. Thus, maintaining the strong relationship between companies is crucial.
In today’s business world, production cost was an increasing concern for companies working to stay competitive in the global marketplace. The top management must search for a global solution to drive down costs and reduce difficult activities associate with inventory management and production management. Global sourcing aimed to exploit global efficiencies in the delivery of services and goods across geopolitical boundaries, including low cost skilled labor, low cost raw materials, tax benefits, and price breaks. Whelan Pharmaceutical was the best example to illustrate how the company chose the best manufacturing site for global sourcing from different perspectives.
It is significant for Beez r Us to develop its distinctive assets to compete with other companies. As an organic honey producer, Beez r Us has obtained an organic certification for its products. Because of its unique and natural floral on Kangaroo Island, Beez r Us can produce higher quality honey than other companies, which can be its core competence. This is a unique asset for Beez r Us, which is hard for those large honey manufacturers
An effective supply chain is the key to creating business value, and with expansion on the horizon. Good planning and willingness to adapt to changes are key to maximizing our results. In order to do this we have come up with a plan that will make Lady Americana mattresses a household name in our target expansion markets. In the state of Oklahoma, Lady Americana has already become a brand that has a bed in almost every home. The current systems in place are effective for todays operations, below are some challenges and recommendations to improve upon this to create an effective supply chain, that will grow with you as your business does.
The bee & honey shortage in the U.S. wasn’t the only worldwide problem. There were increasing ramifications of tainted honey from China and this lead to changes in the Chinese
Another alternative should be to create a plant in Europe so now they don’t have top ay all the taxes they have to pay so they can export their products, in that way they will be able to give better prices to their clients, and they will supposed to have a better service and more quality because they where the pioneers in those products.
What is the right supply chain for your product ? is the question asked by Marshall L. Fisher in his article titled, “What is the Right Supply Chain for Your Product ?” published in March-April 1997 issue of the Harvard Business Review. Author raises the question stating the fact that new ideas and technology implemented haven’t lead to improved performance. Performance has not become better but rather in at least some cases, has worsened due to costs rocketing to unprecedented levels.
We are all aware about the importance of supply, manufacturing and operations chain for any business. It becomes even more important if we are crossing the borders and entering international marketplaces as we are
3: How can supply chain strategy help John Wolf reduce investment and space requirements while maintaining adequate service levels?