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Essay代写:The supply chain management of AMME

2018-12-06 | 来源:51due教员组 | 类别:Essay代写范文

本篇essay代写- The supply chain management of AMME讨论了AMME的供应链管理。ENGK是一家大型跨国零售商,拥有广泛的消费产品组合,每个产品都有自己的供应链。ENGK的业务遍及世界各地的婴幼儿及母亲健康产业,有很多产品线,每一条产品线都是独立运作的,都有自己的物流和供应链,但又相互补充。AMMA作为ENGK的标志性产品,见证了ENGK的成长与发展。AMMA作为ENGK的第一条产品线,拥有ENGK最先进的生产线,拥有成熟的运营流程、成熟的供应链管理流程和消费者服务流程。本篇essay代写51due代写平台整理,供大家参考阅读。

ENGK,AMME,essay代写,代写,paper代写

1. Introduction

ENGK is a large multinational retailer with a broad portfolio of consumer products, each of which is equipped with its own supply chain. The essay is to present the key supply chain processes, crucial activities, main functions and the final issue AMME in front of all concerned parties of China’s Chamber of Commerce. Firstly, an introduction of the company is given, as well as a brief summary of the multiple products line introduction of the company. Secondly, a market analysis of AMME is conducted using both primary and secondary research. Then, a competitor analysis is carried out, as well as the substitute analysis. Thirdly, the current supply chain management of AMME is presented from the gaining of raw material to its presentation in front of end-customers. And crucial elements on the supply chain are analyzed accordingly. Then a detailed presentation of production line’s production, operation processes and activities is showed. At last, an analysis of customer service and related reverse logistics process is conducted.

2. An introduction of ENGK and its production

2.1 An introduction of ENGK

ENGK is an established large company with business running all over the world in the health industry of for both infants and mothers. There are many product lines of ENGK, like the infant formula product line AMMA, the mother nourishment product line BEAUTY, and the health care service line LIFE. Each of the product lines is operating independently with its own logistics and supply chain, but also makes themselves a supplement of each other.

The main target market of ENGK is infants and young mothers, who are in desperate need for special, careful and nutritious health care. The mission of ENGK is to provide a safe, healthy, nutritious environment for both infants and young mother, from the perspectives of food, clothes, nourishment products, to fitness centre and medical clinics. Lead by the company mission, the goal is to ensure the healthy growing up of every infant and a quick recovery of every young moth both from physical and psychological aspects.

2.2 An introduction of AMMA

As the signature product of ENGK, AMMA has witnessed the growing up and development of ENGK. As the first product line of ENGK, AMMA has achieved the most advanced production line in ENGK, equipped with mature operational process, mature supply chain management process and consumer services process.

AMMA is a product line concentrating on infant formula and a targeting market in Chinese newborns industry, providing a series of formula for infants in different stages, like the AMMA-A for newborns younger than three months, AMMA-B for infants from three months to six months, AMMA-C for babies from six months to twelve months, and AMMA-supper for babies of more than twelve months. The name of the product, AMMA, is created according to the Chinese pronunciation of “love mother”. Parts of the success of AMMA can be definitely attributes to the brand name, which attracts many Chinese parents of infants with a hope for a good growing up of both infants and their mothers.

3. A market research of AMMA

The success of AMMA is largely attributed to the detailed and accurate analysis of Chinese infant industry before entering into the market. The market research can be divided into two parts, the micro-level infant formula industry analysis and the macro-level infant formula industry analysis.

According to Schwartz et al. (2010)the market research is to carry out systematic and methodical analysis of data collection, recording and evaluation, and apply the research results in the management of companies. In order to gain detailed and accurate market research, both primary and secondary researches are conducted. To collect the origin data of Chinese newborn babies, a series of online questionnaire is conducted by asking each respondent a set of predetermined questions. These questions are concerned with Chinese infant formula industry, targeting the consumers’ current knowledge about existing products and purchase channels. The questionnaire was posted online for more than half a year.

As for the secondary research, relevant data from academic research and professional websites, like Business Union, Chinese Mother & Baby Care Centre and Chinese Statistic Bureau, was collected. Professional market teams were employed to run both primary and secondary researches.

3.1 Micro-level infant formula industry analysis

AMMA targets in Chinese formula market, a market of which is about USD 12.55 billion and is growing up by 25% in 2017 (Cheng et al., 2017). The key factors for the substantial increase in infant formula are growing population, increasing disposable, fast growth e-commerce, and accelerated urbanization. According to Huang et al. (2015), the population of Chinese newborn is about 5.5 million eve year, the number of which is likely to increase since the permission of having a second child in a family by Chinese government. Thus the micro-level infant formula industry is quite juicy.

3.2 Macro-level infant formula industry analysis

According to Jing and Shan (2014)Chinese infant formula market has grown by 22%, 10% more than that of the global average growth rate, and is experiencing stable growth for years. Nowadays, the market size is likely to reach 150 billion RMB by the end of this year (Ahmed, 2017), and is growing at a rate of 21%.

To analyze the macro-level industry, Porter’s Five Forces Model is applied (Ormanidhi and Stringa, 2008).

Bargaining Power of Suppliers: The main suppliers for AMMA infant formula product are milk famers. As a great agricultural country, there are a large amount of cow breeders in China, making a quite competitive environment for suppliers. The quality of raw materials, milk in this case, varies among cow farms and cow breeders. In general situations, the bargaining power of suppliers is relatively low, because of the intense competition among average quality milk providers and the low cost of switching suppliers. However, things are quite different when it comes to high quality milk (Xu et al., 2014), the better the quality of the milk, the stronger bargaining power of milk breeders.

Bargaining Power of Customers: Because of the rigid demand for infant formula, the first call of infant formula is rather the quality than the price. Besides, the prices of infant formula are set by a bunch of imported infant formulas, thus the bargaining power of customers is low in the industry of infant formula.

Intensity of Existing Rivalry: In China’s infant formula, the main rivalries are international brands, like AMMA, not only because of the high quality of international brands, but also because of the brand loyalty forming in the process of product experiencing. The main competitors of AMMA are Mead Johnson, Danone Dumex and Nestle’s Wyeth.

Threat of substitutes: The only substitute for infant formula is breast milk. According to Lonnerdal (2000)the demand for breast milk is quite strong, meanwhile the demand for infant formula is also quite large. Despite the fact that breast milk is the substitutes for infant formula in nature, the target market for infant formula and breast milk are quite different. As for mothers who choose to breast milking their babies are likely to have amount of disposable time, like full time mothers. As for mothers who choose infant formulas, are likely to be working mothers, looking for a work-life balance in the fast-paced working environment. Therefore, the targeting market for breast milk and infant formula are not the same.

Threat of New Competitors: In the infant formula industry of China, it is quite hard for new competitors to enter the market, considering the high brand loyalty, heavy investment for the building of infant formula factories and logistics system. Therefore, the threat from new competitors is quite low in this industry.

3.3 The inner needs from end-uses in the market of infant formula

In the market of infant formula, the inner needs for end-consumers are the safety and quality of milk (Mettle, 2010). As mentioned above, the consumers’ price sensitivity is not that high, meaning that the consumers care more about quality than the price. Therefore, the product with the best quality is likely to win the market competition.

The most important quality in infant formula is the freshness and sterility of cow milk. The fresh-keeping technology is essential in the process of keeping a good quality. Except for the importance of keeping quality of raw material, the other determinant of product quality is the nutrition formula invented by the R&D department in AMMA. With both the freshness of raw milk and the effectiveness of innovative formula, a brand is quite likely to gain loyalty from consumers.

4. The supply chain management of AMMA

To gain a good quality of infant formula, the supply chain management is quite crucial in this case. According to Todorova (2004)a supply chain is the integration of independent companies with shared information about every aspect of the products, including suppliers, manufacturers, wholesalers , retailers and customers.

4.1 Supply chain types of infant formula industry

There are two types of supply chain building models in China’s infant formula industry. The first model is to milk manufacturers focused. The second model is end-users focused.

In the model of milk manufacturers focused supply chain, the building and development of supply chain is around the milk manufacturers, and therefore always far from end-use consumers. The products in the model are always ultra-high temperature sterilization milk and milk powders, making it easier and safer for long distance transportation to end consumers. This method is applied by many large manufacturers, including AMMA. The key success factor in the model is the good management of channel distribution of products. The advantages of the model are easy controls of the raw milk, wide choices of raw milk suppliers and thus high product quality guarantee.

In the model of end-users focused supply chain building, the manufacturers are always near the city, and thus near the end-consumers. In this model, the competition advantage is to easily control distribution market and always familiar with the market. The disadvantage for this model is the limitation of the number and quality of milk resources near the cities.

4.2 Suppliers and raw materials

4.2.1 Current situations in China

Suppliers are enterprises providing all kind of raw materials, in the case of AMMA, the milk breeders. There are two ways to get the milk. The first way is to collect milk for cow breeders, and the second way is to build a farm all by the company itself. According to Fuller et al. (2006), 80% percentage of raw milk is gained from the first way.

Both ways have its advantages and disadvantages. In the first way, the advantages mainly come from a variety of suppliers to choose and a relative low raw material price. And the disadvantage of the first way is also quite obvious, that is a lack of full control of the quality of raw material. In the second way, the main advantages mainly come from a good control of production quality, and the according disadvantages are heavy investment and high prices to maintain high quality.

4.2.2 Raw material logistics management

In the industry of infant formula, it is a good logistics management system that determines the quality of the products. As the raw material of infant formula is mainly raw milk, a material that easily going bad if the storage is not proper. In order to keep the freshness of raw material, a cold chain logistics is quite necessary in the situation. In Chinese infant formula industry, the lack of professional cold chain is the bottleneck for the quality development of local companies. Lucky for AMMA, the cold chain logistics system of AMMA is most the advanced imported from the USA, sparing AMMA the concern of raw material going bad.

4.2.2 AMMA’s efforts to solve the problems

As is shown above, the most difficult problem for AMMA is the problem of suppliers’ quality control problem. Considering China’s cow raising situations of small-scale and scattered cattle raising situation, the direct purchase by large infant formula companies from cattle raisers are quite limited. To solve the awkward problem, milk station appears. Milk station is a small station that connects both milk industry and cow breeders by collecting milk from local cattle breeders and selling milk to milk industry. In this process, it is the quality of milk station that matters most to the ultimate quality of products.

AMMA has done a lot of research in this field, and developed a unique quality management system to control the raw material quality in milk stations. Firstly, AMMA would choose the best milk stations from a lot of milk stations. Secondly, AMMA run quality tests for the milk delivered from the milk station frequently. Moreover, AMMA sends some of its technicians to stay and work in the milk station, in order to gain a real time inspection of the processing of raw milk. The quality management system of AMMA has been implemented and adjusted for many years, and always serves as the first guarantee for AMMA products quality.

4.2. Production process

4.2.1 Production technology

In the industry of infant formula, the production technology is quite important, including milking machine, aseptic processing equipment and advanced packaging line. Most of the production technologies are imported from developed countries, like Homeland, Switzerland and Germany. As for AMMA, the production technology is from Germany, ensuring a high quality and high sustainability in the process of production. Besides, AMMA also has a strong R&D department for the development of more effective and nutritious formula, ensuring AMMA’s products always being a satisfaction to end-use consumers.

4.2.2 Package technology

In the industry of infant formula, the process of package is also quite essential. As the last process with product exposed in the air, the sterility and accurateness of the process is quite important. Some serious infant formula accidents happen in this process, with employers’ misconduct and lack of carefulness.

As for AMMA, the process of package for infant formula is conducted in a sealed and sterile environment, most parts of which is done by automated machine, sparing the possibility of milk powders being polluted by careless employers.

4.3 Product logistics and distribution channel management

According to Toomey (2000)there are many different ways of product logistics management and distribution management. The first one is a traditional way by distributing the products to wholesalers, whose responsibility is to distribute the products to retailers and end-use consumers. The second one is a new model by distributing to both super markets and chain stores. The third one is the direct sale to consumer, including delivery to every single consumer, deliver it to pre-kindergarten and deliver it to infant & mother care carters. No matter what the distribution and logistics management system is, there should be at least one large distribution centre in charge of all the transportations and distributions. The responsibility of the distribution centre is to run and adjust the distribution situation and amount according to market changes and transportation changes at any time.

As for AMMA, the distributions system is a combination of all the three modes. The distribution channel of AMMA includes wholesales, supermarket and end-use consumers. AMMA distributes its products not only via traditional retailers and real shops, but also through the internet, namely the e-commerce. Considering the fast development of Chinese e-commerce, it is important for AMMA to hold this channel to attract consumers by running an AMMA flag-shop online. After years of practice, the consumption from online shop has consisted more than 60% of AMMA’s total sale in China. The application of e-commerce in China is quite important, considering the cut of rent, the cut of hiring extra employers and the cut of distributing fees by directly dealing with end-users. Moreover, China has become a country relying on e-commerce, with more and more people choosing to do their shopping online. And as a response to the trend, AMMA is planning to increase its investment on online shops and channels building.

4.4 The consumer service and reverse logistics

Despite the fact that product quality of AMMA is always perfect with little questionable products to be returned, the consumer service and reverse logistics are set to guarantee consumers’ satisfaction in case of special cases. In the process of reverse logistics of AMMA, once consumers raised the issue of product return, the retailers of wholesalers of AMMA should accept the product return request as soon as possible after knowing and evaluating the product return reason. Then retailers or wholesalers have two choices to deal with this situation, one is to put it in their warehouse, waiting for the next sell, and the other one is to return it to AMMA distribution centre for next distribution.

5. Conclusion

In conclusion, the success of the product AMMA by ENGK can be attributed to many factors, among which the market and competitor research and supply chain management matter the most. The market and competitor research should be conducted thoroughly before the decision of investment, and should be conducted regularly in order to get hold of the changing demand of consumers and changing strategies of competitors. The supply chain management in the industry of infant formula is quite complex. Not only has the supply chain management deal with regular logistics, production and distribution parts, but also has it to deal with the special transportation and storage needs of the raw milk. After the decision of investment is made, it is the mastery of supply chain management that determines the level of the of AMMA, including the product quality, consumer recognition and consumer satisfaction. Therefore, to run a successful manufacturing multinational enterprise, the management should take every step and every detail should be into consideration, and even a minor mistake can break the brand of an established enterprises.

6. Reference

Ahmed, F. (2017) Novel Foods Across the Lifespan: From Infant Formula to Impaction Ageing. Asia Pacific Journal of Clinical Nutrition, 11(s6), pp.112-116.

Cheng, C., Ren, A. and Chen, L. (2017) Prediction of Supply and Demand of Diary Market in China-Based on Partial Equilibrium Model. Journal of Arid Land Resource & Environment, 12(1), pp.3.

Fuller, F., Huang J. and Rozelle, S. (2006) Got Milk? The Rapid Rise of China’s Dairy Sector and its Future Prospects. Food Policy, 31(3), pp. 201-215.

Huang, S., Xin, ZQ. And Sun L. (2015) China’s Population Childbearing Willing Change: 1980-2011. Social Science in China, vol.1.

Jing, L. and Shen HP. (2014) The Analysis on the “Overseas Shopping” Phenomenon in China Infant Formula Market. China Dairy, 2(4), pp.34.

Lonnerdal, B. (2000) Breast Milk: A Truly Functional Food. Nutrition, 16(7-8), pp.509-511.

Ormanidhi, O. and Stringa, O. (2008) Porter’s Model of Generic Comparative Strategies. Business Economics, 43(3), pp.55-64.

Mettle, A. (2010) Infant Formula. Acta Paediatrica Scandinavica Supplement, 71(299), pp.58-76.

Schwartz, R., Carew, M, and Maksimenko, T. (2010) Micro Markets: A Market Structure Approach to Microeconomic Analysis. Wiley, 5(1), pp.34.

Todorova, D. (2004) Supply Chain Management. Economic Thought Journal, 9(2), pp.90-109.

Toomey, JW. (2000) Distribution Management. Springer.

Xu, CH., Pan, F and Rong, Y. (2014) Comparative Nutritional Evaluation of Infant Formula Milk Powders from Chinese and Foreign Milk Sources. Food Science, 8(23), pp.45.

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