Managing Operations Case Study 1 (Case Study Sample)

Managing Operations Case Study 1 Name: Institution: Managing Operations Case Study 1 Supply Chain and Involved Parties A supply chain refers to the different sequences and processes that are involved in the making of a product from its raw state to its finished state after which it is sold to the consumer. Firstly, growers/farmers are the first to be involved in the supply chain since they are the ones growing the product. Apart from that, there are intermediaries involved who participate in various stages of the supply chain. Intermediaries may vary in number with some at the earlier stages of processing of the product while others connect the farmers to dealers who may wish to buy the products. Apart from that, processors are also a critical part of the supply chain since they are involved in transforming the harvested cherries into coffee beans. They may range from single individual farmers with the necessary machinery to large cooperatives that can run the entire processing of the coffee beans. Government agencies also form part of the supply chain whereby they control the trade of coffee in the country by making the relevant policies to promote the production of coffee. Moreover, exporters are also included in the supply chain and their main function is to buy from producers and resell to other dealers. This gives them a lot of expertise regarding the quality of the product due to their interaction with various dealers and products. Dealers/brokers are also part of the supply chain and their main function is to supply the coffee beans to roasters at affordable prices while on the other hand, roasters are present to turn the coffee beans into final products that people can enjoy. Finally, retailers are the final group involved in the supply chain and their main purpose is to sell the finished product to consumers all over the globe. Consumer Benefits of the Supply Chain Consumers can only benefit from ‘fair trade’ if all the other involved parties create a relationship based on fairness and honesty. This will ensure that there are no illegal or hidden costs that are passed on by any of the groups to the consumer. This will ultimately mean that the prices set are decided through a process that puts into consideration all the factors involved. If the consumer receives high quality products at a reasonable price, then these trade agreements can be termed as fair for all the groups present in the supply chain. Forms of help Nestle provides to growers Nestle offers growers the opportunity to sell directly to them, hence removing the need for intermediaries who might buy the produce at lower prices than the set market standard. For instance, in the Philippines, farmers are paid on the spot after taking their produce to designated Nestle selling points after the quality has been analyzed. Apart from that, the company also agrees on standard procedures that can be used by farmers to ensure that their products meet the high quality required in the sector. Moreover, the company buys the products at a higher price than the normal market price, therefore giving incentives to the growers in the long run. This produces a ‘ripple effect’ in the local economies since the regions are able to benefit more from growing coffee because they earn according to the quality produced. Additionally, the company also ensures that there is a constant market to sell the produce after harvesting since it creates a strong relationship with growers and dealers in most regions. Role of Intermediaries in the Final Price of Coffee Prices of coffee are mostly decided by the relationship between the supply and demand of the product. Since intermediaries can be found at different levels starting right after harvesting all through to the retailing part, they can play a role in setting the prices of the product. If intermediaries buy the coffee beans immediately they have been harvested, they can process the beans to become coffee, after which they can then sell the final product to dealers or other intermediaries at a higher price. This will make the final price to the consumer considerably high. On the other hand, if intermediaries distribute the unfinished products to different parties in the supply chain without incurring any costs, the final price will be relatively cheaper since the shared cost of producing the product will be much lower. The concept of ‘value’ in the supply chain The value of a product determines how much consumers are willing to spend on it in the market. A high value product will attract even more consumers at a higher price because they are able to relate to the high quality of the product as compared to alternatives in the same market. Adding value involves a number of processes that make it more attractive to consumers in the long run. For instance, branding is a major concept that determines the value of the product since it is the first thing that the consumers see when they get the product. Proper branding and packaging will ensure that the product is noticeable and stands out from other products in the same category. Creating a very valuable brand is important when creating brand loyalty in customers, hence it is very critical. Apart from that, the marketing strategy is also important in ensuring that the product reaches the highest number of people possible. By doing this, the company is able to lure prospective consumers to the product, hence increasing its sales in the long run. Benefits of Growers Selling Directly to Nestle By removing intermediaries in-between the supply chain, growers will be able to earn more from their produce. Nestle offers a fair price to the farmers for their produce, which is way above the market price, hence ensuring that they are always making a profit from their farming activities. The company always advertises its base price for the growers produce and sets a minimum price, making sure that there is a reference level for growers. Additionally, sell...