Strategic Supply Chain Management in Sri Lanka Retail Essay

1.0 Abstraction

With the cost of populating traveling higher and higher in Sri Lanka retail consumers struggle to maintain up with their disbursals low as possible through disbursement less and less. Food is a really basic demand of a adult male and hence people can non last without it. At this point of clip what consumers are anticipating from retail merchants are high quality merchandises at the lowest possible monetary value. Therefore companies in the retail concern should be able to turn to this point within the market.

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Therefore in order to supply the best quality and the lowest monetary value goods to the consumer companies in the retail concern should be able to roll up the food markets at their lowest cost and the best quality. For this to go on at that place has to be a really effectual supply concatenation for the peculiar retail merchants every bit good as convenience for clients to make the retail shops. Supply concatenation can be defined as a web of connected and mutualist organisations reciprocally and co-operatively working together to command manage and better the flow of stuffs and information from providers to stop users.

In the retail industry in Sri Lanka there are many rivals. But the market leader in the industry should be able to pull off the supply concatenation efficaciously and expeditiously. Supply concatenation direction is the direction of upstream and downstream relationship with providers and clients to present superior client value at less cost to the supply concatenation as a whole.

Cargills Food City can be defined as the largest retail merchant in the island in all classs. In other words it can be defined as the market leader in Sri Lanka for the retail industry, offering a slogan “ on your manner place ” to the mundane consumer in market. Therefore in order to supply the convenience of purchasing retail merchandises it has expanded its concern over the island comprising of more than 144 mercantile establishments. Besides to add to that Cargills has won many awards bespeaking its presence as the market leader in the retail industry in Sri Lanka.

2.0 Introduction

Cargills ( Ceylon ) PLC is a Sri Lankan corporate established in 1844 and built on a strong foundation of values and moralss. Guided by sure leading it spearheads the sustainable development of the nutrient industry in Sri Lanka. Prosecuting invention and nutrient safety its fabrication trade names Cargills Supremo and Cargills Finest ( processed meats ) Cargills Kist ( processed fruits and veggies ) and Cargills Magic ( ice pick and dairy merchandises ) lead sectoral growing.

Through its selling and distribution arm spread across the island Cargills distributes its manufactured trade names every bit good as internationally renowned nutrient and non-food trade names. The Cargills agriculture theoretical account has gained planetary acknowledgment for associating husbandmans and enterprisers to the market through a sustainable and inclusive value creative activity procedure.

Customers with respect to the retail concatenation would be mundane shoppers who are in demand of food market points for mundane ingestion. Customers are anticipating higher quality merchandises at a lower cost to them. Therefore the chief points clients are traveling to purchase are fresh merchandises from the supermarket. Customers presents are busy people so they go to one topographic point to make all the shopping.

Therefore if they do non acquire the fresh merchandises they will non trouble oneself to see the supermarket once more and the client trueness will be lost. Company has to hold a good supply concatenation to obtain the fruits and veggies rapidly from the farm to the mercantile establishments so that they reach the clients at the same degree of quality. Besides the company should hold a really dependable set of providers who are able to supply the goods at their extreme capableness.

Although Cargills is the current market leader rivals are shuting in on the leader. Therefore Cargills should be able to maintain on introducing new things and supplying at the lowest cost to retain the clients. Cargills is besides fabricating some merchandises which will assist them in cut downing the costs if they try to obtain it from outside husbandmans. All of Cargill ‘s multiple fabrication sites are equipped with province of the art R & A ; D installations which invariably generate merchandise inventions to please their clients. Their strength is people and R & A ; D scientists have ensured that they delight their consumers every twenty-four hours everyplace with new and advanced merchandise offerings.

Therefore bottom line would be to be in the lead the company should hold an effectual and efficient supply concatenation.

3.0 Supply Chain of Cargills Food City

CONSUMER Material Flow

Fund Flow

Information Flow







Tier 03 Tier 02 Tier 01 Tire 01 Tier 02

Up Stream Down Stream
4.0 Supply Chain Issues in Design and Management at Cargills

Supply ironss in the modern universe go through assorted hard stages. Therefore organisations should be able to get the better of these troubles and travel frontward with new developments in the supply concatenation. In recent old ages supply ironss have developed in to more faster and dependable direction systems. Agility can be defined as a new developed construct with respect to the supply concatenation. Agility is the ability to alter and react rapidly and efficaciously to market demand. To make this supply concatenation must be un-encumbered with clip devouring procedures.

Another issue sing supply concatenation would be synchronism. This is used to minimise stock list and clip in the chase of competitory advantage. Synchronized web Acts of the Apostless as one distinguishable organisation and for some companies where ownership is extended vertically up and down the concatenation that is what happens already. Co-ordination in supply concatenation direction can be defined as affecting providers within the supply concatenation design stage of the organisation. These are some of the design issues of the supply concatenation that the direction should look into.

Making extremely incorporate supply ironss requires a incorporate managerial attack throughout the concatenation and this demands really high degree of coaction and trust. Therefore when the direction chooses providers they must concentrate on the trust and the dependability of the providers.

Supply ironss are peculiarly susceptible to put on the line because of the length of the web of participants in the concatenation and the assortment of supply concatenation undertakings involved. Therefore direction should pull off these hazards with doing minimal breaks to the supply concatenation. Forming refers to what sort of a construction is required within the concern to efficaciously undertake the issues within the supply concatenation and to do the new developments within the concatenation.

Main competitory advantage with respect to Cargills would be the cost advantage. At the minute Cargills is basking both larning curve consequence and economic systems of graduated table in their supply concatenation.

Real cost per unit

Accumulative Volume

Therefore in my position the chief issues with respect to provide concatenation would be competitory scheme of the organisation, legerity, flexibleness reactivity and hazard direction issues. Therefore these three are farther explained with respect to the Cargills Food City supply concatenation.

5.0 Supply Chain Competitive Strategy of Cargills
5.1 Concept
It is clear that we are now come ining into a new epoch of supply concatenation competition. Therefore a demand arises to make value bringing systems that are more antiphonal to fast altering markets and are more consistent and dependable in the bringing of that value requires that the supply concatenation as a whole be focused on the accomplishment of these ends.

5.2 Current Situation
The current scheme used by Cargills is the concern scheme alliance. This is sing to alining supply concatenation scheme with the nucleus strategic way of the company. Therefore Cargills has adopted this scheme for many old ages. It has worked good for them but it needs to alter to an amore client centric scheme. Cargills is viing on the cardinal bases of cost, invention, quality and services.

5.3 Recommendation
Cargills should now look at the client ‘s position. This is practising a high degree of marketing placing client demands and edifice profitable concern around different market sections. Therefore concern should transform its schemes as follows.

From Supplier centric to client centric

From push to draw

From stock list to information

From dealing to relationships

From maps to procedures

6.0 Supply Chain Agility Flexibility and Responsiveness of Cargills
6.1 Concept
One of the biggest challenges confronting organisations today is the demand to react to of all time increasing degrees of volatility in demand. Therefore legerity, flexibleness and reactivity all trades with how fast a supply concatenation can respond to the alteration in demand.

6.2 Current Status
Presently Cargills is making a slightly just occupation in reacting to the alterations in the market. But since some of the merchandises the supermarket sell are manufactured by the Cargills Company itself they should be more nimble and flexible towards demand. Agility and meagerness can be best shown as below.




Low High

Thin – plant best in high volume, low assortment and predictable environments

Agile – is needed in less predictable environment where the demand for assortment is high.

6.3 Recommendation
Cargills can do the supply concatenation more nimble by utilizing the factors given below. Cargills besides need to set its scheme to altering demand besides.

Long Lead


Supply Characteristic
Hybrid de-couple through delay

Thin Plan and Optimize

Short Lead


Agile speedy response


Kan-ban uninterrupted refilling


Demand Characteristic
Therefore to accomplish legerity in the supply concatenation company should set up the undermentioned foundations.

Basic Principals of Agility Managing Agility
-Synchronize activities through shared information Up watercourse and down watercourse

-Partner with providers to cut down inward lead clip Up watercourse

-Seek to cut down complexness Up watercourse and down watercourse

-Manage procedure non merely work Up watercourse

-Utilize appropriate public presentation maps Up watercourse and down watercourse

7.0 Supply Chain Risk Management at Cargills
7.1 Concept
Today ‘s market topographic point is characterized by turbulency and uncertainness. Therefore considerable pandemonium exists in supply ironss. Many companies have experienced a alteration in their supply concatenation hazard profile as a consequence of alterations in concern theoretical accounts. As a consequence of heightened hazard organisations will necessitate to develop appropriate plans to extenuate and pull off that hazard.

7.2 Current Status
Hazards with respect to Cargills lies within perishable points they sell to the client. Besides the demand for the merchandises, treating the merchandises, pull offing the controls and the general conditions conditions can besides be a hazard to Cargills. Therefore chiefly there are five types of hazards which have been shown in the below diagram.

Environmental Hazard

Demand Hazard

Procedure Hazard

Supply Hazard

Control Risk

7.3 Recommendation
Understand the Supply ChainCargills should be able to seek and place the hazards within each of the above given countries. After that the organisation as a whole should seek to minimise the impact of hazards by pull offing it. Pull offing hazards in a supply concatenation can be done as a procedure given below.

Better the Supply Chain

Identify the Critical Path

Pull off the Critical Paths

Improve Network Visibility

Establish Supply Chain Continuity Team

Work with Suppliers and Customers to Improve Supply Chain Risk Management Procedures

8.0 Decision
Cargills at the minute is concentrating on the cost advantage side of the competition. Although this is of import to the company the supply concatenation schemes and its public presentations should alter harmonizing to the alterations of the environment. Therefore the company can be in front of the competition and increase its market section within the state.

Therefore the company should be able to accomplish this position as shown above through competitory scheme, legerity flexibleness and reactivity, hazard direction of supply concatenation.