Analysis of Food Supply Chain Models

Analysis of fargon Supply Chain ModelsChapter 1 Introduction1.1 Globalization in Food Industry backgroundSince last decade, Globalization is a trend in the provender exertion due to growing potential markets in various develop countries and ever-changing consumption pattern of the people. Integration of international pabulum markets and increasing expansion in international markets of the firms is the most signifi hindquarterst trends in human beingswide economy. exchange liberalization and scientific progress gave rise to globalization. Even though consumer diets are gradually changing globally there are variations in diet obtain patterns around the world which is mostly based on income levels.The focus of food retailing industry in developing and developed countries was different with obeisance to consumers and the fictional character of food demanded. The trend was that the developing countries retailers focused on high value food while the developed countries retai lers focused on meeting consumer demand with respect to quality, security and choices. Thus various retailers are now looking at exploring new markets and using more opportunities in different kinds of developed and developing markets.Retailers shake the information regarding the consumer preference and the standard of living which in and then applied for explore in segmenting the market according to market demand, affordability as well as quality. Hence food retail sectors is continuously growing and making innovative sale placements. The global food retail sale has increased up to $2 trillion yearly and the top 15 global supermarket companies account for more than 30 percent of world supermarket sales.Bourlakis (2004) opines that The current changes are driving food picture chains to take up coordination in the midst of producers and retailers to aid modifying products to meet consumer demands. The food render chain progressed from series of shorter, independent transfers to more unified, coherent relationship between processors, manufacturers and retailers.Lubbers (1997) refer to the term globalization, meaning the global sourcing of raw materials combined with local marketing. Stalk and Hout (1990), Christopher (1992) and Hewitt (1994) suggested that The keys to long-term competitive advantage in todays grocery are flexibility andcustomer response. To maximize a competitive advantage, all members within the Supply Chain should seamlessly work together to serve the end consumer (Towill, 1997).The do of globalization (i.e. open markets), the market entranceof new competitors, and stricter governmental requirements for food safety and environment friendlyyield place increasing demands on management.This study will examine near of the food supply chain models, evaluating it whether the consumer preferences are bringing changes in the global food supply chain model. Further effort will be make to analyze the changing patterns of traditional and evolv ing model for existing food supply chains and how it affects the sale and demand of foods in the market.With the introduction of supermarkets in the 21st ampere-second more and more traditional grocery outlets have suffered a fall in share from 40 percent in 1995 to 36 percent in 2005 and thus their was rise of supermarkets (Neff 1997a).Thus globalization has come into picture where more and more supermarkets are establishing in various countries due to decline in international trade barriers and more opportunities for investments as well as growth as a multinational.1.2 Statement of The ProblemThere are various factors which affect the global food supply chain pattern and every stage of supply chain undergoes some kind uncertainties which cause inefficiencies in firms logistics. Food industry is a similar facing various issues regarding proper planning of statistical distribution system which incurred a high cost to the retailers. Due to high competition and growth in the retail sector, many manufacturers and retailers have understood that there can be significant amount of cost reduction by making rectifyments in logistics.This can be achieved when the suppliers and the manufacturers work together to give better value to the consumer by maximizing costumer satisfaction and minimizing cost of distribution. Thus there is a take up to designing a supply chain model.UKs Milk supply chain is one of the complex food supply chains.UK is considered as one of the largest milk producers in EU. However, the major concern for UK is that even if the UK is mainly self-reliant in milk, the value of UK exports of milk products is significantly lower than the value of imports and in 2007 the UK had a trade deficit of about 881m in dairy products. (Defra, 2007).Several reason have been estimated which has led to issues in dairy sector in UK.Thus the above issues raised a demand for come along in-depth investigation. They thus form the introduction for this study.1.3 P urpose of The StudyThe purpose of study is to examine the food supply chain model present in global food industry as well as UKs milk production and supply chain in particular. Specially, the purpose of the study wasTo identify the changing food system pattern in food manufacturing and retailing globally.To highlight conventional and developing model for existing food supply chains and to asses its affects on the global food market.To find out the socio-economics impact of changing pattern of food supply chain on society.To study the supply chain models and to examine how the model could be designed more effectively and efficiently in order to improve supply chain uncertainties.To examine the reason of decline in the milk supplies in UK which leads to decrease in milk exports and increase in milk import even if UK is self sufficient in milk production.1.4 question QuestionsTo provide focus and direction for the study and to successfully carry it out, the following research question s have been raiseda) Do the changing pattern of food distribution system have an effect on consumer and retailers relationship? (b) If they do, in what ways it effect the consumers? What changes should be undertaken to improve on distribution system?Which are the important factors for food supply chain developments and the important characteristics of the food retail sectors, and their effects on the food supply chain?What is the need to redesign food supply chains model?What are the strategic, tactical and operational decision made for food supply chain decision corresponding production and distribution?How globalization in food industry has helped in growth of the world economy?Has the retail sector become more powerful then food manufacturing sector?What are the issues in Milk supply chain in UK? What is the reason for higher import of milk?What is the percentage of production of impact milk products in UK? What are the demand and supply of these milk products?1.5 Significance of The StudyThis research work is to look at the current supply chain process in UK and evaluate the food supply chain model in order find out the changing patterns of global food supply chain which affects the consumer. Thus the study is significant for the following reasonsFirst it will help shed light on the ongoing transformation in the food industry globally. It will also help us to understand certain issues which exist in different processes of supply chain management. Also findings from the study whitethorn serve as a basis for evaluation of entire food supply systems which has shifted from national to global retailing. This will help them to adopt feasible measures to improve the relationships between retailers, manufacturers and consumer.The study will also contribute to existing acquaintance on what encouraged the retailers, distributors and manufacturers to improve on the efficiencies of existing food systems. This could help tone up retailing internalization which will further help in focusing more on increasing sale growth and market share than on profitability. The growth in private label and consumer interest brought about new changes in food retailing. In this way, the study will serve as basis for further research on the topic in the various countries as well as all over the world for the particular type of food product supply chain.Further case study is performed on UK dairy industry. It will address the positive as well as negative aspects in this sector. It also points out the market share for each dairy product and issues in dairy sector. The study also suggests the scope for emerging innovations in this sector.1.6 shaping of The StudyThe study is organized in following wayChapter one provides general information of the study, the research problem, purpose of study and research questions and objective of study. It would also present information on the significance of the study, limitation and organization of the study.Chapter Two prese nts background information and key characteristic of food supply chain globally.Chapter terce presents a review of available literature related to supply chain. In particular, literature on the concept of changing global supply chains perspectives as well as the socio economic effect on the people due to change in food supply chain as well as relationship between society and changing supply chain will be studied.Chapter four focuses on the dairy food supply chain model, its characteristics and future of the dairy supply chain sector. It will also focus on issues in production of milk and milk products.Chapter five presents the summary and conclusion of the research findings. It also discusses the findings and implications of the present study and provide a conclusion.Chapter 2 Backgroud2.1. Introducing global retail industryLast year in 2007, national statistics confirmed that there were 55,540 retailers having around 103,000 retail outlets globally. The worlds major food retail c ompanies are Wal-Mart Stores, Inc., Carrefour congregation, The Kroger Co, Metro AG and many more. This company originates from different countries like US, France, Germany but they have made their mark in international markets also.Wal-Mart being the leader has expanded in over 9 countries and operates nearly 1,300 outlets across trades union America, South America, Europe and Asia. After acquiring the large market share in developed countries, these major retailers are looking at developing markets like China and India. There is extreme competition in retail markets because companies are always looking for acquisition prospects for further expansion.White et al., 2004, opined that there is speculation that Carrefour, the worlds second biggest retailer by revenue may be in the sights of Wal-Mart, the only retailer that is bigger, which unsurprisingly, recently signalled it would like to start expanding more crisply in Europe. Reduced trade barriers and regulations have facilitat ed the global companies to enter the markets of developing economies like India while in China the government has increased the barriers in order to increase the competition between the global companies. food market and Food retailing are getting concentrated.According to the Euromoniter report 2007, the mature markets of Western European and US markets along with growing saturation in Eastern Europe have turned retailers focus to the BRIC (Brazil, Russia, India and China) markets, which show extraordinary growth potential.Retailers are developing retailing strategies by doing market research specific to a particular geographical region and then using technical innovations and marketing knowledge to develop in that area. There are large formatted supermarkets, hypermarkets and a few small sized formatted stores and grocery stores. Private labeling of the retailers brands are the growing trends now a days and they have become successful as well due to the quality of products they pr ovide at much cheaper rates.Worldwide Top 30 Grocery Retailers, 2006Table1.Rank/ CompanyCountry of OriginRetail Banner gross revenue 2006 (USD mn)Market Share (%)Net Sales (USD mn) (1)Grocery Retail Banner Sales (%)Domestic Sales (%)Foreign Sales (%)1 Wal-MartUSA376,4306.3344,99245.678222 CarrefourFrance122,2142.097,73973.947533 Metro GroupGermany87,3601.575,13148.045554 TescoUK86,8271.578,45173.375255 Seven I (2) lacquer79,1011.341,60067.866346 AholdNeth.77,5461.356,29984.418827 KrogerUSA69,5491.166,11170.5 speed of light08 SearsUSA64,8331.153,01211.888129 CostcoUSA64,7371.158,96361.0802010 TargetUSA62,5841.059,49030.4100011 ReweGermany56,4480.954,51575.3683212 CasinoFrance55,2980.925,75274.7584213 Schwarz GroupGermany55,1600.950,22482.6544614 AEON (2)Japan55,1570.941,43155.5901015 AldiGermany54,1040.949,94883.5534716 AuchanFrance53,6080.948,40862.6505017 WalgreensUSA49,8740.847,40936.099118 EdekaGermany48,5250.840,27785.493719 CVSUSA46,0920.843,81430.0100020 Safeway (USA)USA43,77 00.740,18575.4831721 LeclercFrance40,4350.736,43261.494622 ITM (Intermarch)France36,9310.633,97676.9901023 SainsburyUK36,0710.631,36075.6100024 Woolworths (AUS)Australia34,2550.631,24372.1891125 SuperValuUSA32,2780.637,40673.0100026 TengelmannGermany31,5660.529,25562.0584227 Coles G