Kelloggs Case Study

Supply chain from manufacturing to shelf

Q1: Name the three sectors of the supply chain. On what occasions could certain
sections of the primary sector operate as retailers?
The supply chain is consisted of three main sectors.
1. PRIMARY OR EXTRACTIVE SECTOR:

This sector provides raw materials such as wheat, corn for food sector, oil and coal for power
sectors.
2. SECONDARY/MANUFACTURING SECTOR:

This sector involved the production and assembling of products such as car manufacturers
and Kelloggs purchases raw materials such as rice and corn for cornflakes.
3. TERTIARY SECTOR.

This sector is more focused on services and not involved in any production activity. The
commons examples are banking, retailing, transportation and tourism.

Primary
Sector

Secondary
Sector

Raw
(( Provide Raw
Materials)

( Manufacturing of
Products )

Tertiary
Sector
( Provide
Services )

The occasions on which the primary sector operates as retailers, one of the case is the
supply of oil and fuel to power production sector while the 2nd case is the selling of hunt to
the customer by the hunters without sending it to the manufacturer.
Q2: Give three examples of how Kelloggs demonstrate good supply chain management. How
can Kelloggs make improvements both for its business and for the environment?
Kelloggs uses the mentioned three criterias to implement a good supply chain management.
(1) Kelloggs uses a system called Just-in-time to provide an efficient stock inventory system. Just-intime means that just enough product is made to fulfil orders and limited stock is kept.
(2) Kelloggs needs to get the balance right at each section of the supply chain. Late deliveries or
inability to deliver due to a lack of products might make retailers buy from competitors through its
collaborations with TDG and by relocating some of its warehousing; Kelloggs now has a more
efficient distribution system.
(3) Computerised stock holding systems ensure shelves are always full and orders are delivered on
time. This helps Kelloggs to keep stocks to a minimum. It also helps customers like ASDA and
TESCO to reduce their stocks too.
To make improvements in both business and environment Kelloggs should increase its revenue
growth, this can happen only if the employees work in corporation to maximize the profit earned.
Environmental improvements can happen if wastes are reduced at high rates. The most important waste
that has to be diminished is water. Nowadays water shortage is a big problem, and if big companies and
factories can reduce waste of water, this problem can lesson. Kelloggs is a company which can help solve
water shortage, because its a worldwide company.

Q3: Why is it important for Kelloggs to build good relationships with businesses in the tertiary
sector?
Kelloggs cares about having good relationships with its retailers in the tertiary sector such as TESCO,
MAKRO and ASDA. The retailers help Kelloggs create a good relationship between the supplier and the
customer. For example Tesco has a good display of the goods. The companies developed a Shelf Ready
Unit which prevents the staff to spend a lot time for the products of Kelloggs. It also helps the consumers
to choose easily from the shelf.
Q4: Evaluate the benefits of large manufacturers like Kelloggs handing over the logistical side
of their business to specialist companies like TDG.
There are several advantages of handing the logistical side of businesses to specialist companies, like
Kelloggs does to TDG. TDG is a specialized in end-to-end supply chain management. By working with a
professional company it makes it easy for Kelloggs to distribute its products all around the world and
concentrate/specialize on its own work as manufacturing the goods.