Managing Global Logistics and Supply Chains
The grocery retail company
You work for a global sourcing company as a key account manager. Your main responsibility is to manage the sourcing and distribution of fruits on behalf of a UK-based grocery retail company (of your choice), as well as several other retail companies in mainland Europe. The retailer has many grocery stores in major and small cities across the UK. Fresh fruits are one of its most popular and profitable products. The fruits sourced by your company are normally processed and packed in factories outside of the UK (which you don’t own). These are then shipped to and stored at a UK warehouse (which you do own). From your warehouse fresh fruits are delivered either to the retail company’s distribution centres (“cross-docking”) or directly by you to some of their retail stores. Your company is liable for any damage, shrinkage and waste generated in the processes of storing and delivering fruit to the retail store. You are also responsible for ensuring all fresh fruits are sold at profitable prices (in the retail store) and that their “sell-by” date has not expired. Your company does not own any farms or fruit processing / packaging factories. The processed / cut fresh fruits for the retail company are currently supplied by rival food processing companies who source their own fresh fruits.
Motivated by the need to provide more choice to meet customer needs, the retail company would like to source several new varieties of overseas fruit. The retail company aims to use a greater variety of reliable suppliers of quality fresh fruits. They have identified that greater product variety (consumer choice) is a major factor in attracting shoppers into their stores. At the moment your company does not own any processing and packaging factories, but the retail company would like your company to consider this option (processed/cut fresh fruits), if it is going to make the offering of new fruits hard for the other grocery retail companies to compete. The retail company may consider sourcing new varieties of fruits from their existing fresh fruit processing (cutting) suppliers and your direct competitors, if your company is not able to provide them with a competitive offer / solution.
Table 1 Existing fresh fruits sold by the retail company (excluding the cut fresh fruits)
Fruits How many variety Supplied by Countries of origins
Banana 5 Competitors Ecuador, Brazil, Costa Rica
Apple 8 Your company New Zealand, USA, UK
Grapes 4 Competitor Spain, France, UK
Pears 3 Your company Spain, Italy, USA
Blackberries 2 Competitors Spain, Netherlands, UK
Blueberries 2 Competitors Spain, Netherlands, UK
Strawberries 3 Competitors Spain, Netherlands, UK
Orange 3 Your company Brazil, USA, Mexico
Grapefruit 2 Your company South Africa, China, Mexico
Satsumas 2 Your company Spain, Brazil, Italy
Tangerines 2 Your company Spain, Brazil, Italy
Limes 1 Your company China, Brazil, Mexico
Lemon 1 Your company China, Brazil, Mexico
Cantaloupe 2 Competitors Turkey, Iran, Romania
Pineapple 1 Competitors Costa Rica, Thailand, Thailand
Watermelon 2 Competitors Turkey, Iran, China
Kiwi 2 Competitors Chile, Italy, France, Greece
Apricot 2 Competitors Turkey, Morocco, Spain
Nectarine 3 Competitors Turkey, Italy, Chine
Peach 2 Competitors Spain, Turkey, Chile
Plum 2 Competitors USA, Chile, Romania
Mango 3 Your company Brazil, Thailand, Nigeria
Based on a market research study by the (retail) company, you have obtained information regarding different varieties of fruits currently being sold by the retail company (both sourced from your company and competitors (see Table 1)). The retail company is not sure which new varieties of fruits to offer and ask you to come back with a solution / suggestion.
The assignment tasks
Produce a 3,000 words report for your managing director (excluding references and appendix) which considers the following tasks:
1. Conduct research which investigates the suitability of two new types of fruit that you are intending to source to the retail company. For each fruit choose two separate countries of origin. Critically support your choices with both practical evidence and relevant theoretical arguments.
2. Suggest suitable volumes, packaging solutions and transportation mode(s) (i.e. air, sea, rail, road, etc.) for the importing of the two fruits (from overseas
farms or suppliers at the selected countries to a suitable UK location, and potentially to other European retail customers). Support your suggestions with convincing theoretical/practical arguments.
3. Suggest suitable port(s) of export in the selected countries and the port(s) of import in the UK. Critically support your suggestions with convincing arguments and additional information about each port.
4. Identify, using a process diagram, all the parties, main activities and documentations required for managing the imports of the two fruits all the way from the suppliers or farms in the selected countries to the central warehouse in the UK. Consider processing / cutting by your company if there is advantage.
5. Critically identify and discuss governance mechanisms for the ethical and environmental issues as a result of the sourcing solutions for the two fruits.
You should make the following assumptions/suggestions: locations of farms or suppliers, purchase terms (INCOTERM), payment terms, shipment volume and frequency, locations of ports, inventory policies, and other factors relevant to the above tasks. Your report should include references to the appropriate (preferable peer-reviewed) logistics management literature (textbook, journals, and websites). You referencing must apply Harvard style referencing style (see Module Handbook). Care should be taken when consulting websites; they are not all equally authoritative (for example Wikipedia is not peer-reviewed; therefore is not considered an academic reference website).