Supply chain management in ASDA

Supply chain management is the "Management of activities that produce materials and services, transform them into intermediate goods and final products, and deliver them through a distribution system." (B. Render and J. Heizer, 2016). I have chosen to analyse the supply chain of whole milk from ASDA. I will be going through the process by which the milk product is initial obtained to the distribution, transportation and how it would be obtained by the end customer/consumer.

Theoretical Model

Farming

ASDA's whole milk initially starts off with British farmers (Asda, 2019).

Crops are grown and monitored in the farm to ensure that the dairy cows are nutritious and healthy, this increases the chances of enabling the cows to produce milk of a high standard.

Milking

The cows are then milked, this milk is then transported to a milk processing plant (according to ASDA they work with ARLA foods)

Processing

The milk is sanitised, inspected and packaged for ASDA stores. For whole milk a percentage of butterfat is removed and then added back to the milk (Fen-Farm-Dairy, 2019).

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Key Issues Within the Supply Chain

The farmers within the industry are suffering financially due to the low price of milk. This has caused farmers to blockade distribution centres which evidently causes a major problem within the dairy milk industry (BBC, 2015). The low price of milk means that the farmers are not generating as much revenue and profit compared to what they were doing so before. This would easily cause farmers to feel demotivated in ensuring that a sufficient amount of milking occurs, which would lead to a much lower quality of their services.

This would have an overall negative effect on ASDA's reputation, especially with regards to their stock of whole milk. It could cause ASDA to have less milk stock available resulting in less sales, more unsatisfied customers and a reduction in the overall profit and revenue of ASDA.

If policies and incentives of the government were in more favour of beef rather than milk, then it may be more beneficial to slaughter cows rather than milking them. However, this would cause a major issue as it would lead to a decline in the overall supply of milk within the market. This would have a negative effect on the whole economy and cause many other businesses to suffer financially.

There is a negative aspect to the living conditions, health and well-being of the dairy cows. Farmers are admitting to the emotional suffering of dairy cows (M. Chiorando, 2018). Dairy cows are suffering at the hands of farmers, this is a controversial subject and can be seen as ethically and morally wrong. This has been placed on the BBC, so awareness of this has been created. This can easily cause viewers and many customers to feel the need to refrain from purchasing any dairy products like whole milk.

Potential Improvements and developments

Both ASDA and the farmers can conduct more qualitative research.

To improve the supply chain of the whole milk at ASDA, both the farmers and ASDA as a company could ensure that they monitor and control their technological resources more frequently. This helps in ensuring that they have the latest software's and technology within the industry. This will therefore reduce the amount of errors that occur and increase the overall efficiency of the overall milking of cows. This will have a positive effect on both the farmers, distributors, retail stores and the customers. If the technological resources within this field is up-to-date, then this would mean that more milk can be produced at a much faster rate, and this could lead to farmers deciding to lower their prices. ASDA retail stores will then be able to reduce their expenses and reduce the overall cost of the whole milk which they sale. Lower pricing would then attract both existing and new customers and will encourage them to purchase the products; therefore resulting in a lot more sales, profit and revenue.

ASDA should ensure that they always refrain from purchasing milk supplies from those that have a negative reputation regarding the health and well-being of dairy cows. They should only purchase from those with a good reputation regardless, sell for the lowest price and that are operate putting into consideration what is the ethically and morally right. This helps in keeping a high standard of corporate social responsibility. This would cause ASDA to be exempted from being viewed as a participant to animal cruelty. Their reputation will therefore be of a high quality. This will help them in meeting customer satisfaction, which will then increase their sales, profit and revenue of whole milk and the various other products that they sell.