Essays on Principles or Logistics and Supply Management - Kellogs DC Case Study

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The paper "Principles or Logistics and Supply Management - Kellog’ s DC" is a good example of a management case study. In the modern-day supply chain environment, the distribution facility is interlinked with the supply chain. In addition to functioning as a storage warehouse for inventory, it concentrates on adding value to the goods to be redistributed to the retailers, wholesalers or directly to the customers (Krmac 2008). Distribution centres have hence become a critical part of the supply chain. Indeed, they are instrumental in confirming industry standards, replenishing stores, packaging and effectively managing inventory.

This report examines the case of Kellogg’ s: National Distribution Centre that is currently managed by Linfox Logistics, a major logistics company (Linfox 2013). Indeed, in the present case scenario, logistics activities are depicted as playing an essential role in adding value. In which case, warehousing and distribution centres are a critical part of logistics systems (Dexion 2012). Logistics value proposition Logistics value proposition refers to integrated efforts aimed to value-addition to logistical operations to ensure customer satisfaction at the least total cost. Logistics that are performed in this manner create value to a distribution centre.

Essentially, a wide range of logistical services can be achieved if the distribution centre is willing to apply the required relevant resources to ensure they provide logistical services at the lowest total cost (Bititci 2004). In the modern-day operating environment, the cost and not technology is the limiting factor. For instance, a company can maintain a dedicated inventory at close proximity to its major customer base. Additionally, to promote faster and cost-effective order processing, a company can maintain a dedicated communication on real-time between a supplier’ s logistical operation and a customer.

Because of the enhanced logistical readiness, a distribution centre can deliver products within minutes of identifying the needs of the customers. Therefore, developing logistics value proposition relies on reviewing and analysing the costs, benefits and the value that a business can deliver to the customers (Baker 2004). In the case study, Linfox for Kellog operates a distribution centre at Botany that is almost 43,000 square feet in size that use more for the company’ s cereal products manufactured at the Botany manufacturing facility (Linfox 2013).

Kellog’ s transports truckloads of breakfast cereals to the national distribution centres in Perth and Asia Pacific markets near the customers. The products are afterwards distributed to the chain stores inconsistency with the demands of the customers at the least total cost. Linfox Kellog’ s distribution centres have robotics, storage and retrieval systems, IT hardware and conveyer belt, all which are aimed at cutting labour costs and promoting efficiency (Dexion 2012). Consequently, the logistics value proposition can be interpreted as a promise to deliver value to the customer the least total cost, and the belief on the part of the customer that value will be created.

It can further be depicted as the positioning of value, in which case “ Value = Benefits – Cost. ” Role of Warehouse and distribution centre Although the terms distribution centre and warehouse have often been used interchangeably the two terms are not synonymous. Indeed, the difference between the two is based on their major functions. A warehouse can be defined as a commercial building used for storage of goods that are to be redistributed to retailers or directly to the customers.

Conversely, a distribution centre may refer to a warehouse of r any other speciliased building that aside from storing goods, concentrates on adding value to the goods, which are to be redistributed to the retailers, wholesalers or directly to the customers. In principle, a distribution centre deals with the entire order fulfillment or processing element (Tseng, Yue and Taylor 2005).

References

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Baker, P 2004, "Aligning Distribution Centre Operations to Supply Chain Strategy," International Journal of Logistics Management, Vol 15 No. 1, pp111-123

Bititci, U, Martinez, V, Alboresm P & Parung, 2004, "Creating and Managing Value in Collaborative Networks," International Journal of Physical Distribution and Logistics Management, Vol.34, p.251-268

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Cooke, J 2013, Kimberly-Clark connects its supply chain to the store shelf, DC Velocity, viewed 3 Oct 2013, http://www.dcvelocity.com/articles/20130410-kimberly-clark-connects-its-supply-chain-to-the-store-shelf/

Dexion 2012, Linfox Kellogg’s: Award winning technology, viewed 3 Oct 2013, http://www.dexion.com.au/media/casestudy/18.pdf

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Kimberly-Clark 2012, Kimberly-Clark’s World Class Supply Chain, viewed 3 Oct 2013, http://www.kimberly-clark.com.au/en/careers/teams/world-class-supply-chain/

Krmac, EV 2008, Intelligent Value Chain Networks: Business Intelligence and Other ICT Tools and Technologies in Supply/Demand Chains, viewed 3 Oct 2013, http://cdn.intechopen.com/pdfs/18527/InTech-Intelligent_value_chain_networks_business_intelligence_and_other_ict_tools_and_technologies_in_supply_demand_chains.pdf

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Linfox 2013, Linfox Logistics and Kellogg's, viewed 3 Oct 2013, http://www.linfox.com/Services%20and%20Solutions/Case%20Studies/Kelloggs.aspx

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Tseng, Y, Yue, W & Taylor, M 2005, "The Role Of Transportation In Logistics Chain," Proceedings of the Eastern Asia Society for Transportation Studies, Vol. 5, pp. 1657 - 1672

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