Environment On Supply Chain Process Assessment Answer



Supply chain management is conceptualized as the backbone of current business organisations. The supply chain strategy rolls out by depending on product availability, market coverage, and revenue recognition. The customers become much interested in knowing the method of purchasing any particular product when this is introduced to the market. Any glitches found in the product can drop out the sales parameter of the organisation. Therefore, it is necessary to design the transportation and delivery process of the products in an effective way.  Business organisations can make the remarkable profits by adopting the most effective supply chain management. The customers for this supply chain management process are the people in New Zealand who tend to consume the organic and processed milk for maintaining good health. The customers are even focusing on receiving a good distribution channel for the delivery of the milk.

The study will explore the supply chain management procedure of Mainfreight Warehouse & Logistics located in New Zealand market. The company needs to undertake a fruitful and commendable delivery process for Anchor Milk Dairy Product. The study will propose a suitable supply chain framework for the organisation to ensure beneficial profits. The other possible optimization process of supply chain management will be discussed by analyzing the environmental impacts. The study will also highlight the financial implication for the proposed supply chain process. Furthermore, the research paper would present the suggestions to control the policies for the stock items.

Background of the Company

Mainfreight Warehouse and Logistics ltd. is a global logistic service provider (Sbc.org.nz, 2017). The company has been associated with the delivery and logistic process of the products with the properly managed warehousing services. The company has been serving both the international market and the domestic market in (Emmanouilidis, Taisch &Kiritsis, 2013). The mission of the company is to continue expansion of the global footprint with the most effective logistic services. The headquarters of Meinfreight is based in Auckland, New Zealand. The company maintains the unique work culture by associating almost 6400 staffs. In a broader look, it has been noticed that Meinfreight is embodying the “special people, special company” (Mainfreight.com, 2017). The 100 year vision of the company is widely focusing on the approaches in supply chain process with the help of efficient employees. The company operates within diverse market that ranges from goods, retail products, home appliances, furniture, dairy products, foods, and beverages. The logistic program is linked with the global system for fulfilling the needs of the potential customers. The high coverage of the company is beneficial for the shipments of the products to the clients on timely manner (Ifama.org, 2017). The company is generally capitalizes from on the changing demands of the customers. The company maintains the proper communication and coordination through emailing, telephoning and meeting the customers directly. The maintenance of the coordination between the warehouse and the shipment point is much remarkable in the supply chain process.

Mainfreight is also concerned about the categorization of the globally based customers. The logistics services are mainly depending on the value based approaches for the money paid by the customers (Stadtler, 2015). Therefore, the company is even focusing on using the high impactful and fully advanced technologies for the supply chain process. Especially, in case of establishing the high transit technologies for the inventory management is quite beneficial for providing the customers proper goods and services via logistics process. The use of the GSM network is providing the customers a platform for placing their order through the websites. This initiative is much helpful in making the company more strengthen in participating in the global competitive landscape. Currently, the company is focusing on undertaking the effective supply chain management procedures to deliver the high quality Anchor Milk to the clients with the help of advanced technological suggestions. The study will thus discuss the suitable supply chain management and integration management for supplying the Anchor Milk and make profits. Accordingly, the effects of environment will also be discussed to understand the fruitful method of supply chain process. The financial implications will be suggested for the proposed supply chain procedure in this case.


Selection of the suppliers who can meet the expectation level of the consumers is not an easier approach. It requires following the proper considerations that sometimes involves initial costs. In order to select the suitable supplier for the supply chain process, it is essential to pay attention on the following criteria.

  • The judgment of the stakeholders’ opinion is essential before selecting the suitable supplier for the supply chain process (Monczka et al., 2015). It is necessary to judge the capabilities and compared prices for the potential suppliers. The supplier selected for the supply chain process requires ensuring the delivery commitments, resource savings capabilities, reliable and much responsive towards the work.
  • Measurement of the supply process is essential for selecting the preferable supplier for the process (Wisner, Tan & Leong, 2014). The supplier program is one of the beneficial methods of selecting the efficient supplier for the products.
  • It is necessary to gather the feedback from the suppliers by utilizing the self-assessment questionnaire. The supplier assessment criteria would refer to the performance gaps that will be fruitful enough in identifying the operational segments.
  • Development of the partnerships between the manufacturer and the suppliers would be essential for selecting the proper supplier for the product. Communicating with the suppliers will be beneficial in such cases (Dekker et al., 2013).
  • The supplier quality management is needed to be ensured by depending on the materials and ingredients. If the relationship with the supplier is strong, it can be ensured that the supplier would provide the high quality services.

These steps are essential to select the potential suppliers for the supply chain management. Similarly, it is notified that Mainfreight Ltd. has been supplying the different ranges of products by ensuring high quality and effective inventory management. Therefore, the company can be the suitable supplier to distribute the Anchor Milk to the customers in the New Zealand market.


Mainfreight Ltd. needs to pay attention to the establishment of the network. The following diagram can be beneficial in defining the necessary supply chain process for supplying Anchor Milk to New Zealand market

Diagram 1: Supply Chain Diagram for Milk Supply

(Source: Pagell & Shevchenko, 2014)

Mainfreight Limited has to face the direct competition with APL Logistics and CEVA Group Plc. The corporate strategy undertaken by these logistic companies is much threatening for Mainfreight to maintain the sustainable position. Therefore, it is essential for the company to undertake the significant method of supply chain management. The above diagram explains the different stages that are needed to be considered while undertaking the supply chain process of milk. These stages include cooperatives, farmers, supermarkets, and the processors. The processing is as follows:

Stage 1: The involvement of the farmers is necessary in this stage. The cows at the dairy farm need to be milked for two times in a day. The milk is then needed to be stored in the refrigerator for next two days.

Stage 2: The tankers of the refrigerator need to collect the milk from the silo that is placed in the diary farm. The milk will then be transferred to the processing factory for the packaging purposes.

Stage 3: In the processing factories, the pasteurization process is performed. The pasteurized milk is stored in the refrigerator silo after processing for one more time (Aya?, Samanlioglu & Büyüközkan, 2013). It is one of the most helpful for making the milk free from the harmful bacteria.

Stage 4: The processed milk will be transported to the refrigerated tanker for manufacturing milk. The manufacturing process needs to be performed in a sequential manner.

Stage 5: The manufacturers usually provide the focus on producing diverse dairy products made off milk. After packaging the milk, it is then induced into the pallets and delivered to the refrigerated trucks.

Stage 6: The final stage determines the transportation of the milk pallets and then into the refrigerated trucks. These pallets will then be delivered to the retail outlets of the supermarkets.

Maintaining such supply chain process flow will be much beneficial in delivering the high quality Anchor Milk to the customers all across the country. However, it is even essential to identify the needs of the customers and establish the effective relationship with the clients, such as the retailers (Mylan et al., 2015). The maintenance of these stages would be effective enough in scheduling the supply chain process in a significant way.

Supply Chain Optimization

The seasonal changes in the milk composition and milk supply require the proper and intact planning in the supply chain process. It is essential to propose a suitable supply chain management framework that will be beneficial for Mainfreight Ltd. to restructure the inventory management. It is to be indicated that composition of milk depends on several factors such as, selection & breeding, feeding capacity, environmental impacts, psychological pathways, and manipulating the rumen micro-organisms. On the other hand, Sel and Bilge (2015) opined that the decisions for manufacturing need to be made by concentrating on the demands and market price of the products. Apart from such demands and process, it is even essential to understanding the processing restriction and the manufacturing capacity as well. Mainfreight Ltd. has been well organizing the supply chain network with the evaluation of the highly advanced technologies. However, it is essential for the company to pay attention towards the proper implications on the dairy product supply chain process.

According to Govindan et al., (2014), DSCM (Dairy Supply Chain Model) was utilized for studying the market demands for some of the specific dairy products. It also focuses on the changes in the milk composition by the farm that has the clear impact on the manufacturing performance of the dairy industry in New Zealand. The development of the supply chain process model will be beneficial to understand the proposed process for milk supply. The model suggests four main features of DSCM. These four major features are:

  • Schedule for Milk Supply and Optimization Process
  • Profiles for Product Demand
  • Policies for Inventory Replenishment
  • Restrictions in the manufacturing process

1) Schedule and Optimization of Milk Supply

At the initial stage of this process, the weekly volume and the compositions like casein, fat, and whey protein and lactose are supplied to the processing plants as per the proposed schedule. The optimization process in this schedule is deciding how the farms schedule the processing plants within the proper model and structure (Pagell & Shevchenko, 2014). With the help of the optimization routine, Mainfreight can even decide the remarkable and profitable product mix for supplying milk on weekly basis. After scheduling the products, these will be placed in the inventories until the orders are filled up.

2) Profiles for Product Demand

The preparation of the product demand profile is based on the specification and needs of each product. The consumption rate of the product is outlined every year by considering the capability of distribution use that has the clear reflection on the consumption variability. Hence, it can be suggested that the company can categorized the products by understanding the product demands for each of the features (Seuring, 2013). For example, customers prefer the use of lactose or high minerals while consuming milk. Hence, the processed milk needs to be of high quality and it also needs to be checked in the inventory management.

3) Policies of Inventory Replenishment

The policies of inventory replenishment depend on the periodic ordering of the products for maintaining the proper level of inventory management (Govindan, Soleimani & Kannan, 2015). The policies are largely focusing on the safety and target levels of the final products that are to be delivered to the clients through supply chain process. Mainfreight Ltd. needs to pay attention to the unit of inventory replenishment policies of delivering Anchor Milk.

4) Restriction in manufacturing process

During the manufacturing process, the maximum and the minimum product batch sizes are affecting the replenishment policies. These effects are mostly seen when the order is placed for filling the inventory. The minimum batch size of the products is 1000 unit whereas the maximum batch size of the products is 10,000 units (Hülsmann, Scholz-Reiter &Windt, 2011). This situation can restrict the manufacturing process in a significant manner.

The dairy simulation sub-model was previously outlined for replicating the liquid milk manufacturing process and distributing in the inventory movements. This model is also useful for creating the demand profile along with the policies of inventory replenishment for the final products for meeting the needs of the consumers. On the other hand, the dairy optimization model is developed for optimizing the return of any specific schedule associated with the milk supply process (Lewis et al., 2013). The dairy products can be manufactured by the changing the quantity and the type of the schedule. These two models are technically linked with each other. It is essential to ensure the weekly inventory levels for meeting the demands and expectations of the customers regarding the consumptions of milk. The information will be then transferred to the inventories’ files. The company can use the Dairy Optimization Sub-Model for defining the optimum product mix that is meeting the needs of the potential customers in the market (Sabri, 2015). The results are needed to be taken into account to ensure the feasibility of the market mix.

Impact of Environment on Supply Chain Process

It has been observed that majority of the dairy products are consumed in the place where those are actually produced. Milk, being the most demanding dairy products, serves the society as the nutrient products and the key plank of food security. The start contrast of milk in New Zealand is less than 4% of the consumed milk than the other countries. The population of New Zealand is quite small and it produces almost 21 billion liters of milk per year. Even though not exclusively, the client base is mostly in off shore areas in New Zealand (Ross 2015). The supply chain process of milk in New Zealand is even sometimes depending on the other countries that are not much self-sufficient for the dairy products. The focus on the global trade of the dairy products in New Zealand is thus much significant. However, it has been observed that the impact of the environment on the supply chain process of milk is quite recognizable. The growth of the pasteurization is much dependent on the weather. The New Zealand farmers need to undertake a range of effective management practices for making the profitable balance between the demand and supply of the feed (Christopher, 2016). The farmers can even reduce the milking process by if the pasture falls short to supply. It helps in reducing the number of cows by drying off early and gathering the unproductive cows. During the early season, the farmers attempt to boost up the growth of pasture with the help of nitrogen fertilizers and feeding supplements to the cows. However, it is notable that the supply chain process sometimes has the potentiality to cause the environmental degradation, be it during the manufacturing or disposal process. The existing policies related to the environmental factors are mainly concentrating on the large scale of the pollutions (Crosson & Needles, 2013). For example, the dairy farms are supposedly creating environmental pollution more specifically. The product stewardship is introduced for protecting the supply chain process from the marketing effects of environment. The product stewardship is conceptualized as product-centered approach that is applied to protect the social and environmental consideration. It involves the product life cycle procedures like product manufacturing, retail uses, disposers, sharing responsibility for the environmental benefits, and improvement of the quality of life. In terms of managing the environmental impact, it is necessary to reduce the carbon footprints during the product packaging process. These carbon footprints are responsible for creating the environmental pollution hence, it is essential to recognize the cost-effective solutions to mitigate the issues associated with the environmental impacts.

Mainfreight Ltd. is even focusing on using the high impactful and fully advanced technologies for the supply chain process. Especially, in case of establishing the high transit technologies for the inventory management is quite beneficial for providing the customers proper goods and services via logistics process. The use of these technologies is much helpful in managing the environmental impact. The concentration on building the proper relationship with the client and managing corporate social responsibility, the effects of the environment can be reduced. Many of the manufacturers are seen to be more conscious about the productivity and these impacts of the environment (Cheng & Choi, 2010). In such cases, it will be much effective to reduce the costs of the supply chain process and foster the market innovations. Providing the proper value based services to the customers will be ensuring the lesser number of the environmental effects. The retailers also need to maintain the proper responsibility in developing the product stewardships. The improvement of the packaging system will be effective enough in reducing the environmental impact and establishing the remarkable supply chain process.

Role of the cost in determining the Purchasing behavior

It is essential to undertake the systematic approach to establish a value added supply chain process. Mainfreight Ltd. needs to ensure the procedure of cutting the costs to influence the purchasing decisions of the customers. The following aspects can be taken into consideration to minimize the costs and attract the customers towards the products.Understanding the basic needs and demands of the customers are essential for the suppliers. Once the suppliers can understand the expectations, the effective customer services can be planned accordingly. The value added services provided to the customers would be effective enough to incur costs and undertake an effective supply chain process (Emmanouilidis, Taisch & Kiritsis, 2013). Structuring the supply chain strategy is necessary by documenting the expectation criteria of the customers and the existing functional process of the company. The recognition of the needs would be helpful enough in improving the supply chain procedure. The enormous competition in the market is persuading the suppliers to undertake the innovative procedure to influence the buying behaviour of the customers. The technological inventions are usually providing the customers more opportunities to select the suitable products among the number of choice. Pricing the goods is thus necessary for attracting the customers. Keeping the high prices of the goods would not be preferable to the customers in most of the cases. Hence, keeping the low cost of the products will attract more customers. In order to do so, the company needs to cut down the operational costs. The complete market research and identifying the innovative procedures would be beneficial in influencing the buying behaviour of the target customers.

Implication of TCO

In general term, TCO is conceptualized as the cost ownership that is more inclined towards selling the products at a very low rate by comparing to the costs of other company products. Many of the organisations try to manufacture the goods at a cheaper rate. The cost savings from the operational activities requires maintaining flexibility in the integration process. However, it is to be determined that the organisation requires deploying the workforce as well as the product delivery process during the manufacturing process (Crosson & Needles, 2013). The return relieved after selling the products will thus be much profitable in usual cases. It is much helpful in improving the supply chain process and will help in retaining the customers. Another most beneficial approach of TOC is the improvement of the communication transparency. It helps in establishing the linkage or communication between the customers and the suppliers. Hence, the TOC implication is much beneficial for the supply chain process.

Control Policies for the Stock Items

According to Ross (2015), the process of inventory control depends on the supervision, coordination, distribution, storage capacity, and recording the materials. However, Mainfreight Ltd. needs to consider some of the Control Policies for the items to be stock in their supply chain management. The implications are provided below:

  • Establishment of the annual stocking policies would decide the minimum and maximum stock level. During the distribution or logistic process, it is essential for the firm to cross-check the policies whether it is correctly maintained. Accordingly, the firm will get the idea about the available stocks of the products.
  • Preparing the inventory budget will be essential for the inventory stocking. The preparation of the inventory budget is essential to ensure the capital expenses on the inventory management. In fact, the firms would get the idea about the different departments that need some exclusive budget planning.
  • The company requires maintaining a perpetual inventory system. The inventory system is helpful in organizing the supply chain process in a sequential way.
  • It is important for the company to calculate the turnover ratio to store the product stock. Reviewing the calculation report, it will be helpful in structuring the financial planning for the future prospects by investing the profit amount.
  • Establishing the optimized purchasing procedures requires the adequate number of the control (Lewis et al., 2013). It is the responsibility of the management to adopt the suitable purchasing procedure that has the linking with the demand pattern data.

Maintenance of these policies would be beneficial for Mainfreight Ltd. to store the product stock items. On the other hand, the concentration on the secure and safer approaches will also be necessary for the company.


The study aims to identify the remarkable procedure of supply chain by Mainfreight Ltd. The company is much renowned for the efficient logistic process and shipment facilities. Mainfreight Ltd is undertaking the most effective supply chain management process to supply Anchor Milk to the customers of New Zealand. The study discusses the commendable supply management flow that is helpful enough to supply the milk to the people across the country. The value added services provided to the customers would be effective enough to incur costs and undertake an effective supply chain process. Structuring the supply chain strategy is necessary by documenting the expectation criteria of the customers and the existing functional process of the company. The recognition of the needs would be helpful enough in improving the supply chain procedure. The enormous competition in the market is persuading the suppliers to undertake the innovative procedure to influence the buying behaviour of the customers. The study also suggests the establishment of the proper relationship between the suppliers and the customers


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