Case Study on "Report on Corporate Responsibility for CEO"

Case Study 14 pages (3842 words) Sources: 14 Style: Harvard

[EXCERPT] . . . .

Products and Services That the Company Outsources From Other Countries

The problems facing our supply chain

Remedial actions to solve the supply chain issues

Human rights abuses and perceptions of inequity

Poor government structures

Competitive advantage through improved and streamlined supply chain process

Environmental problems

The information that needs to be given to the stakeholders

Explain the actions that you think the company should take to address these issues

Recycling

What information do you need to make available to stakeholders?

What opportunities might environmental issues create for your company?

This is a case study of a food manufacturing company that is headquartered in Yorkshire in the North of England. The company underwent a merger and is experiencing problems with its value chain process. The supply chain management department is also in chaos. In this paper we analyze the problems and the solutions to the company problems with an aim of improving its competitive advantage.

The products and services that the company outsources from other countries

The worldwide food industry has experience a rapid growth as a result of various factors. There has also been an increase in competition among the players. This has therefore prompted most of the companies adopt various strategic measures aimed at increasing profitability through the strategic outsourcing of some of their major resources. The costs as well as benefits of outsourcing are numerous. There are three main motivating factors that can make the company to resort to outsourcing some of its resources. The company may be out to seek a political agenda as pointed out by Kakabadse and Kakabadse (2000). This is however unlikely because the outsourcing for political goals is mainly in public companies. The main reasons for outsourcing services would be to cut costs. In the cost drive approach to outsourcing the company would take actions aimed at reducing the business operating costs while maintaining the same level of job performances or better ones.Theoretically speaking, outsourcing should be embraced when the cost of the suppliers is extremely or rather comfortably low to allow for the delivery of a given service at also price after adding overheads, transactional costs and profits .The level of efficiencies of the outsourcing process is controlled and improved by the employment of specialization as well as economies of scale as pointed out by Domberger and Fernandez (1999).

The products and services that the company may outsource from abroad

Due to the nature of the food business, the company may outsource the following services from other countries;

As a result of the complexity of the value chain process in the company, it is necessary for the company to have strategic business partners in order to improve the efficiencies of the company in all of the countries of operations. The need to outsource some of the global activities of the food giant is motivated by the need of concentrating on core competencies and delegating the non-core competencies to other firms. Three main reasons acted catalysts to the adoption of outsourcing of certain activities in the firm. These include, the need to gain more leverage, the need of quick adaptation to the relatively new environment in the new markets of Middle East and Africa and the need to be quickly engaged in a fair share of corporate social responsibility. These make it necessary for the company to outsource logistics, machines and raw materials. In order to improve in the level of on-time delivery, the company may need to restructure its logistics through a third party in order to include a single but efficient Load Control Center (LCC). This will not only improve the efficiency of on-time delivery but also stabilization of costs as well as the reduction in the number of necessary carriers. This is because without the existence of LLC system, the company losses the control of deliveries in its logistics as well as lack a method of gauging its own performance. The application of technology as well as the installation and deployment of special software such as RedPrairie can help in the management of deliveries in a real time and more centralized and organized fashion.

The perishable nature of some of the inputs used by the company makes it extremely necessary to rely on freshness of the products. This makes it necessary to outsource the raw materials for time and cost efficiency. This makes the harvest to manufacture transfer process to be shortened. The purchasing function is also designed at operational and strategic level. This means that the suppliers must be selected and evaluated through a rigorous process of contract negotiations as well as the streamlining of other key elements of the value chain process. The machines to be used in the manufacture of company products are also to be produced by others. The firm must be outsourced in order to allow for the leveraging of custom designs as well as functionality to meet the needs of the company as illustrated by Demetrakakes (2004).

The problems facing our supply chain

In order to survive in any global business venture it is necessary for every company to become competitive through the use of faster, better and cheaper techniques of producing goods and services. The concept of project management is one that should be utilized in order to improve the capabilities of an organization objectives (Kerzner, 2002).This is necessary for the improving the success rate at the firm. Unfortunately, our company is dogged with a number of supply chain problems such as human rights abuses, perceptions of inequity, environmental issues, poor government structures, lack of legal enforcement, boycotts as well as other negative publicity issues. These issues negatively affects the performance our business since it means that our rating on the triple bottom line assessment for evaluating the social, economic and environmental dimensions of the company. As Heizer and Render (2006) pointed out, supply chain management is the process of integrating all of the activities that are necessary for the procurement of all the materials as well as services for later transformation into goods and products to be used by customers. Our project management department lacks the necessary manpower and skills necessary for successfully organizing the supply chain process seamlessly. The inefficiency of the supply chain makes the firm to lose competitive advantage as their competitors continually gain it with an ever increasing demand from the customer base. The situation is worsened by the fact that the company experienced a merger that kind of interrupted some of its core operations. The change that comes with the merger results in job cuts and other effects that interrupt the supply chain process and hence reducing its efficiency.

Remedial actions to solve the supply chain issues

The supply chain issues identified above can effectively be mitigated in order for the firm's operations to be streamlined for maximum efficiency and profitability. The solutions are however unique to the different problem types.

Human rights abuses and perceptions of inequity

The elements of human rights abuses as well as perception of inequality that emerged as a result one of our key strategic partners located in Brazil's source of raw materials (firms) was very damaging to the reputation of our company. This extremely damaged our reputation and triggered massive boycott of our products and services globally. The strategic partner in question employed child labor in its farms with massive exploitation of human labor by grossly underpaying the workers (even the underage ones).In order to mitigate the effects of this, our company decided to cut links with the concerned company that caused the breach and then embarked on a massive corporate social responsibility (CSR) drive across different parts of the world. We stated activities such as monthly tree planting drives in major cities, erection of medical clinics in most of the low income regions the world in which we had major market. Our company acknowledges and publicly issued a statement of apology to the affected individuals. They were also compensated in a bid to rebuild the brand loyalty. We also employed a celebrity endorser in order to act as our spokespersons and hence help in creating a clatter in the bad publicity noise and hence diverting the attention of the customers. Sherman pointed out that celebrity endorsement works by standing out from the ensuing clutter. The result is an improvement in the process of communication by the elimination of unnecessary noise.

Poor government structures

In order to improve the level of corporate governance, it is necessary to carry out a performance audit of the company's governance and appropriately act on the deficiencies. What is best suited for this problem is the total restricting of the firms organization structure and a focus on change leadership.

Competitive advantage through improved and streamlined supply chain process

Wilding (n.d) pointed out that a streamed supply chain and collaboration are two very effective ingredients for creating a competitive advantage. This is illustrated in the diagram below

Source; Wilding (n.d).

The engagement of CSR activities are also important t for gaining competitive advantage as pointed… READ MORE

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