MOD007698 011 Supply Chain Nina Van Diest Vegan Choc
Introduction
This study will give a clear understanding of supply chain management by emphasizing their function and capabilities to dispose of a product in the marketplace. It will investigate the risks that are faced while manufacturing a product and showcasing it in the marketplace. In this study, Nina Van Diest is a chocolatier who wants to expand the chocolate business in the international market. Therefore an entire acknowledgement of opportunities and future growth of the expansion by identifying the competitors in the market will be explored in the study. Porter’s value chain and SCOR has been used in the assessment along with that new strategies are also identified for the betterment of the supply chain.
Scenario Analysis
Current situation
Nina Van Diest is a chocolatier and she wanted to expand their entire production to different countries. The ingredients that she uses in her production process are out of stock. Therefore it has caused an entire stoppage of the production line of her business. On the other hand, Nina Van Diest wants to ensure that each of her goods needs to be environmentally friendly and can be recycled easily. As the range of products has also expanded, Nina Van Diest is searching for suitable traceability to the end supplier. Supply chain analysis will help in delivering the product to the appropriate people at an estimated timeframe. The activities of initiating the purchase of production, transportation and raw materials are analysed by building a roadmap of the supply chain. It will help Nina Van Diest to easily identify each of the risks and also to make improvements in their marketing and production process.
Internal analysis
SWOT analysis
| Strength | Weakness |
| Nina Van Diest chocolatier has a huge experience in this field as the chocolatier used to work in the largest food production in Europe. Chocolatiers have ideas on how this industry works.
|
The nearby chocolate firms are delivering raw metals to the established companies and they might not be able to supply enough material to Nina Van Diest chocolatier. Hence, gathering resources could be high priced and not having financial repoces is a weakness. |
| Opportunity | Threat |
| One of the TV directors helped Nina Van Diestoffered to produce a short video of the product and the coolater can use this for advertising and marketing the product on social media.
|
The organization management is not able to find any potential for this Nina Van Diest’s product line vegan chocolate bar. The competition in the market is huge as their supply chain is strong and on the other hand, the suppliers bargaining power is high. |
External analysis
Porter’s five forces
Competition in the industry
The first of the five forces analyzes the number of competitors and the ability to undercut the chocolate business (Chen et al. 2019). Nina Van Diest has chocolate business in a limited area but there are other multinational chocolate companies like Nestle, Ferrero Group as well as Mars Wrigley Confectionery who already have a global apply chain. In terms of the current business environment, there are a wide number of rivalries, along with the number of equivalent services and products it offers.
Potential of new entrants into the industry
The power of this chocolate business can get affected by the force of the new entrants into the marketplace. The chocolate business can use a strategy of investing less money and time into the market and be an effective competitor. However, an organisation that has strong obstacles entering the market is identified to be ideal for the existing companies within the industrial base as the company would be able to negotiate better terms.
Power of suppliers
This model also addresses how easily the suppliers can acquire the cost of inputs. It can be affected by several suppliers in terms of their key inputs of service or goods, also how much it would cost a business to switch to another supplier (Samiee and Chirapanda, 2019). On the other hand, there are several suppliers or low switching costs of the company that can keep their input cost minimum and improve their profit.
Powers of customers
The ability that consumers have to drive the level of power or prices lower is one of the important five forces. It can affect several customers a business has and it becomes impossible for the company to find a new marketplace or customers for its input.
The threat of substitutes products
The last five forces mainly focus on substitutes. The substitution of services of goods that can be used in place by the business in terms of the service or products poses a threat. Therefore the industry had to produce goods for which there are no close substitutes that will be more powerful to enhance prices and also to imply favourable terms.
Current capabilities within supply chain management
The chocolate industry is increasingly growing in recent times. The enormous demands of chocolates in the overseas markets are giving an opportunity for the chocolatier. They are diversifying the business into new horizons rather than remaining in a stagnant position of the existing market. Therefore logistics plays an important role by giving detailed information about the local market opportunities and demand. Chocolate is a perishable food item. It needs to have safe and timely transportation to the destination (Koberg and Longoni, 2019). Therefore it is extremely important for an efficient logistics system for the chocolate industry. On the other hand supply chain management is also a process of delivering each of the products from the raw materials to the end-users.
Recognising the visibility and risk
By building a roadmap of the supply chain and obtaining an analysis it will help Nina Van Diest to get an idea about the providers of raw material, transportation and manufacturing. It can be analysed to be the potential risk that is created by every entity in the chain. In terms of chocolate production, it is important to identify the availability of cocoa beans (Martins et al. 2019). Therefore it is important for the manufacturer to recognise every entity in the supply chain to get better visibility. Also, help to create a database of global suppliers. This information can be extremely helpful in conducting a long-term relationship with each of the suppliers and will also help in getting every raw material even when the sources are scarce.
Building a map
The most adequate way of analysing the product or material flow is by using the supply chain. It will help Nina Van Diest to get a quick reference of the marketing and processing with the help of mapping. However relevant information or data is needed from every stage of the supply chain to conduct a reliable supply chain map (Vargas-Hernandez and Vargas-Gonzalez, 2021). A supply chain map for the chocolate industry will help to track the supplier of all the raw materials from different locations.
Supply chain management
Supply chain management mainly deals with production, transportation, distribution, and sourcing. It will provide input to the business administration, data collection and optimisation of the entire process and many more. Supply chain operation management has several members who need to have certain skills like strong problems, good communication ability, in-depth business knowledge and analytical ability.
Key Trends Changing the Supply chain Management
Poorly and inefficient functioning of the supply chain can impact negatively on every aspect of the chocolate business. The following are the key trends that are causing significant impact and change to supply chain performance and design
Demand planning begins at the end of the cycle
Aaj capacities on resources for manufacture have increased. Most of the companies have moved from focusing on efforts on in house production planning and adopted more of a demand-driven focus to manage and influence demand more effectively and efficiently (Yasa et al. 2020). By rationalizing what this chocolate industry is best at making, delivering and selling and aligning the Salesforce with that mindset is considered to be a critical aspect to adopting a demand-driven model. Therefore this approach will help the chocolate company to create a more customer focus mindset that will eliminate sacrificing any kind of operational efficiency.
Globalisation
The business landscape will rapidly become more global. This is due to the enhancement in communication as globalisation is impacting dramatically and the business is transacted and managed even on the most local levels (Barkah and Raharja, 2018). However, sourcing of materials, manufacturing, invoicing, returns and distribution has also had a significant impact on the enhancement of integrated supply base and global customers. Therefore this chocolate industry has found existing technology and processes that are not flexible enough for the new business environment.
Opportunities with the future growth of the company
Sufficient capital and efficient management are the two key ingredients without which a profitable and sustainable business can not be possible for the chocolate business to expand. However, in the current time, it is important to explore the upcoming business ideas to develop a futuristic approach. According to the report of WEF, World Economic Forum, the working environment will change in the coming future and it has been also analysed that outsourcing business will run effectively in the coming decade. Canada, Australia and America are working independently but they have a shortage of workers. If they recruit employees locally then they cannot make a good profit because of its high operating costs (Kanten and Darma, 2017). Therefore to maximize profit and reduce the startup cost the industry needs to outsource the project to a number of people of emerging countries at quite a cheap cost.
Supply chain strategies
SCOR
It is identified from the SCOR model that has been developed to identify the organisational actify in an organization to satisfy the customers. The model has plan, source, make, deliver and reutin process five essential steps. This is a standard tool for supply chain management. In this part, the identified business processes of the stakeholders in the industry in terms of the cocoa supply chain are mapped to the SCOR model. It will highlight the proposed approach (Tukamuhabwa, Stevenson and Busby, 2017). The mapping of various business poses in order to the SCOR model levels has been elaborated below-
SCOR level 1 business process of chocolate business supply chain
As it has been mentioned in this study, the SCOR model level 1 is entirely aggregated into the main 5 management processes which includes return, deliver, make, plan and source. In this phase, the management processes have been explicitly defined for the supply chain of the chocolate business.
SCOR level 2 business process of chocolate business supply chain
From the model of SCOR, level 2 has three necessary production strategies that include MTO (Make to order), MTO (make to stock) and ETO (engineer to order). By analysing the case study it has been identified that the chocolate business of Nina Van Diest operates under the make to stock strategy.
SCOR level 3 business process of chocolate business supply chain
The level 3 processes demonstrate the sub-process that is performed to imply the level 2 processes. As per the previous session, it has been indicated that level 2 processes are centred all over the production strategy of MTS (Asamoah et al. 2021). This means that the level 3 process must contain each of the subprocesses that are essential for executing in level 2 processes.
SCOR level 4 business process of chocolate business supply chain
This section represents the entire translation of level 3 processes into a particular business operation. According to the case study, it has been identified that the level 3 process is mainly derived from the SCOR model to a line with the supply chain of inventory business processes.
Value chain
Value chain analysis
Primary activities
Inbound logistics
Nina Van Diest has created a good inbound logistic system. The company has maintained a strong quality check when the raw materials arrive at the company. The company has strong connections with production houses and warehouses where it can maintain and supply finished and raw materials back and forth.
Outbound logistics
The company has maintained a highly efficient logistics system. But in the rent tomes it has failed to capture the scene and needs to heavily invest on a modern setup that helps the company to connect with point of sales more quickly.
Production
The company mainats its production hub at one place and ensures both handmade craftsmanship along with machineries. The company can invest in new machinery and technology for this sector. The company needs to develop the process and reach new market with mass production setup
Marketing and sales
The marketing and sales department of the company is strong. The company has developed a significant marketing strategy. The company has invested and has used tactics of endorsing the brand with clabristes and polar shows rtp increase the demand
Service
Support activities
Infrastructure
The Nina Van Diest organisation system is competent to the current primary activities of the company. The company needs to develop the infrastructure in order to meet the current requirements. The
Human Resource management
HRM at the company is strong yet the company now needs to develop and take into consideration the new prospects of recruitment and selection. The company needs to bring in AI and other advanced technology into the process. This shall help in finding the best match for the position in the company without bringing in any biases in the process.
Technology development
The technological development of the company is weak. The competition in the market has shown that there is enough scope for using technology in the choice production process. The company can use various technologies available such as 3rd printing into the system to create more advanced and better quality confectionery .
Procurement
The company purchases the raw materials of cocoa from Africa and forms one of the best farmers. The company has put forward strong policies, results and regulations to filter out the best and most ethical producers to source the products. The company also needs to take into account the need for better audit of the third party vendor so that it maintains the ethical and legal regulations of employment and labour rights.
Figure: Porter’s Value Chain
Source:
Advantages and disadvantages of the strategies
Supply chain outsourcing
Once this chocolate business has outsourced supply to the third party then it becomes easier to spend more time on focusing and building the business strategy for the future (Min, Zacharia and Smith, 2019). The outsourced supply chain management will take the responsibility of supplying the products that are demanded by the buyers. On the other hand, there is also an increase when a third-party business tries to use cheap material. This kind of practice can be detrimental for the business and can also significantly affect the sale.
Risk management
Risk management is a process of controlling, assessing and identifying threats to the organisation’s earning and capital. There are several risk factors that stem from a variety of sources which includes legal liabilities, financial uncertainties, strategic management errors, natural disaster and technological issues. Risk management is a necessary tool for understanding and disseminating information about the risk management decision. This information and understanding will allow this chocolate business to conclude the decision that will impact their values and interest. By contrast, unlikely events take place and can create a great loss.
Competitors analysis
Competitor analysis helps to find out the market share, competitive features, customer review and pricing. The main purpose of competitor analysis is to acknowledge the competitor’s weaknesses and strengths in comparison to the owned businesses and to recognise the gap in the market. This will reveal their product in broader trends in the market which will help to conduct a consumer base (Lupton et al. 2020). On the contrary, competition always decreases the market share and forces lower prices to stay competitive.
Impact of future technologies
Technology has already made several elements of business-like communication, advertising, sales, manufacturing and purchasing more effective and easier for businesses. New digital technologies help to increase the performance of tasks more effectively and efficiently. In this emerging world, technology plays a major role and it can be used by the company to protect the financial data and any confidential executive decision that leads to competitive advantages. However, it is identified that despite the best control data breaches do take place.
Different strategies which could affect the supply of parts from manufacturing to the end customer
Competitive Marketing Strategy for Chocolate business
In accordance with the case study, Nina Van Diest can use some marketing tactics that will help the chocolate business to outpace the market. A major driver of chocolate is the innovation process by pushing it to the envelope towards a new flavour direction. If Nina Van Diest uses the strategy of innovative new flavour in their chocolate which is a part of product development will be easier for the business to capture. On the other hand, Nina Van Diest can also exploit the consumer interest in wellness and health by talking about the anti-inflammatory properties of dark chocolate (Nummi, 2021). In simple words, a chocolatier can include a new segment of chocolate that will drive healthy ingredients which will make corresponding health claims.
Conclusion
The global supply chain involves distribution of goods as well as service in the international market. Hence, it is essential to establish a global supply chain to provide service in the international market. In this case a small company must include regulatory police to extend their market. On the other hand, there is the existence of other multinational companies who already have a supply chain in the global scale. Here the bargaining power of the suppliers is high and the small companies face several challenges to gather raw materials. It is essential to find proper resources in the region so that the costing gets reduced and profit gets enhanced. From the above study, it can be concluded that Nina Van Diest has a chocolate business and she wants to expand her businesses in global terms. Therefore to identify the current situation of the business environment and the capabilities of supply chain management have been elaborated in the study. This will give a clear understanding of internationalisation and will recognise the risk factors of expansion. Supply chain management plays a major role in all parties involving direct or indirect for fulfilling the requirements of the customer.
This study has conducted a road map of supply chain management that will help this chocolate business to identify the key trends and the future growth of the company. Moreover, strategies of the supply chain will help the chocolate business to deliver and plan the distribution and improve operational efficiencies. The supply chain strategy is basically an operational strategy that will help this chocolate business of Nina Van Diest transform from raw materials to a finished product. It streamlines the flow of each thing to any unexpected natural disaster. In global terms, every logistics of an organisation is managed by the managers of the supply chain. It is performed with effective supply chain management to diagnose the disruption of problems for seamless movement of products or goods. In addition to his ability, it is necessary to acknowledge the supply chain collaboration as it is the ultimate way to gain visibility. Supply chain and collaboration is an aspect of having a collaborative multi-tier supply chain management and planning solution.
However in simpler words Thus, it can be concluded that supply chain management plays an important role in achieving the business objective. It is a fundamental economic concept that is related to the number of goods available at a specific price from point of origin to the point of consumption.
Recommendations
The company can apply profit gross margin to get an idea of how it is going to achieve its goal in the international supply chain. In global supply chain management the process runs through online and the business is established on an intricate web of expenses as well as income. Though on the other hand, the expansion of business must not exceed a comfortable financial margin of error. Or else the whole income of the business can falter. In global supply chain management the business needs to be conscious to make sure that net result does not fall outside of the comfortable zone for expense in case a 3PL is used in the global supply chain management. Also taking advantage of big data could be helpful for the small company as this will include advanced marketing techniques. Here the big data would not just analyze the supply chain practices on the global scale but also it will review it. This strategy will be helpful for Nina Van Diest to extend its market on the global scale with the help of global supply chain management.
From the above study, it can be recommended that outsourcing the business and management will help the chocolate business of Nina Van Diest to grow more. It will help in minimising the overall cost and mostly focus on the core competencies. A good strategy for the supply chain will help to meet the demands of the customer more effectively and will avail greater flexibility in operating and maintaining the supply chain. Supply change management aims to provide a smooth result and it focuses exclusively on the core competencies rather than expensing assets and time on logistic management. While the expansion of the business, this chocolate business can face different risks. This includes exchange rates, politics and interest rates. The internal risk can be under control which includes non-compliance, information breaches, lack of insurance and many more. According to the study, it can be recommended that this chocolate business needs to create a break management plan that should always be prioritising the threats or risks that are to be controlled. This will help the business to capture a wide base of customers even in global expansion. On the other hand, competition also plays a major role in terms of expansion therefore it is important for this chocolate business to focus on its core competencies and outsource the best products to the foreign market. Consumers always tend to access a greater variety of products, increasing attractive prices.
Therefore it is important for this chocolate business to become more consumer-centric and cater to changing buyer desires and needs to a greater extent. This chocolate business needs to identify and understand how the potential and existing consumers rate the competition. This will be easier for the business to develop effective competitive strategies in the target market. However, the target market of this chocolate business is a good indication of their ability to be considered as a competitor. It can be possible that the rivalries offer similar products but they have a targeted base and have different market segments. In this case, the company might not be considered to be the rival. According to the case study, it can be recommended that before initiating the expansion this business should make a list of product benefits and features in order of competence. This will help to indicate what the other competition is providing and featuring to the customer. Moreover in this emerging world digital technologies also play a major role to reach a wider audience for promoting brand loyalty. Technology can improve the productivity of the company and it also helps to satisfy the customer. In order for the chocolate business, Nina Van Diest can sell her chocolate through e-commerce which will help to reach and build a wide customer base.
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