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Assessment Title

Assignment 1

Programme Title:

Bachelor of International logistics management

Course No.:

TLB 5302

Course Title:

Introduction to Supply Chain Operations and

Procurement

Student Name:

Majeda Ali Yusuf

Student ID:

201401171

Tutor:

Emanuelle Blanchetot

8th of April, 2015

Due Date:

9th of April, 2015

Date submitted:

By submitting this assessment for marking, either electronically or as

hard copy, I confirm the following:
This assignment is my own work

Any information used has been properly referenced.

I understand that a copy of my work may be used for moderation.
I have kept a copy of this assignment
Do not write below this line. For Polytechnic use only.

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Table of Contents

Date of Marking:

1.0 Introduction................................................................................................3
2.0 Supply chain structure, function and activities..........................................4
3.0 Importance of transportation and information flows in supply chain
efficiency..........................................................................................................9
4.0 Logistics operations impact on customer satisfaction..............................11
5.0 Conclusion................................................................................................12
6.0 Reference.................................................................................................13

1.0 Introduction
The purpose of this report is to identify the functions in SC Limited
Company and explain its Tang product supply chain from raw materials
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to finished goods. In addition, the importance of transportation and

information flows from a global point of view and ultimately the impact of
all this on customer satisfaction.
Food and beverage industry plays an important role in the society as
they provide food to satisfy human needs. Companies specialized in this
industry produce, process and distribute food to consumers. In addition,
they have certain equipment such as, walk in freezers, roll in and back
freezers and huge refrigerators for storing food. As for the labor, a
successful food company hires well-trained employees with knowledge
about the food supply chain in order to assure good storage, productivity
and as result a profitability. (Bitpipe, n.d.)
This industry has a history as our ancestors used to live on growing food.
Back then, the first nation who sold their grown food in exchange for
services or other goods was Agrarian. Then as the world got closer
together because of travelers and transportations, more nations began
to know that other types of food in different countries exist. This
triggered the urge to buy and since then this industry entered the
commerce society. Today, the food and beverage industry has a high
employment rate in the US as it provides occupations for more than 1.4
million laborer per year. (Vault, n.d.)
SC Limited Company is a huge organization listed in the New York stock
exchange operating in the food and beverage industry in the kingdom of
Bahrain. The main branch of this factory located in the US. The mother
company holders decided to divide the business into two companies. The
first one name is SC Limited Company. They have not decided the name
of the second company yet but it will be bigger since it holds 80% of the
entire business. SC Limited Company was established in 2007 with
investment of $ 75 million and its factory is located in the Bahrain
international investment park (BIIP) in Hidd near to Bahrain Marine
Customs. Companies like Kraft, Adams, LU, Cadbury, Nabisco and
Christie helped SC Limited to stand on its feet. (BBC NEWS, 2012, p. xx)
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SC Limited Company produces many finished products such as cheddar

cheese, squeeze cheese, Tang, Oreo, Ritz, Cadbury Prince Biscuits, flakes
and many other famous products but the factory operating in Bahrain is
only specialized in producing Cheese products and Tang products with
manpower of 300 employees. (STEPHANIE STROMMAY, 2012, p. xx)

2.0 Supply chain structure, function and activities

The supply chain of SC Limited Company starts with the customer
service department as they receive orders for their products. Once the
customer service confirms the order delivery date for the customers as
per the production plan, they directly communicate with the production
team. The production team reviews the production plan and then fits the
order in the week that the similar line of production will be operating.
The production team in SC Limited Company is separated into Tang Team
& Cheese Team, if the order is for Tang products; the Tang team handle it
while the cheese team is handling cheese products orders. The
production team reviews the production plan on weekly basis along with
the available materials report which is being taken from the logistics
team and then they raise a purchase order to the procurement
department with the required materials for the orders. The procurement
team sends the purchase order to the financial department to make sure
that time and effort are not being wasted over minor purchases and to
confirm the quotation documents. The mission of the procurement team
is to process the POs with the most appropriate vendor and negotiate the
payment terms and any other things related to the purchase. When the
needed materials are received from the supplier, the procurement
department contacts the production team to start producing. SC Limited
has an agreement with a third-party logistics Company to store its
materials and finished goods, while SC Limited warehouse department
only job is receiving and storing at least one-week inventory of materials
form 3PL for that week production requirements. Once the production is
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finalized, the procurement team confirms it to the logistics team in order

to arrange for the logistics operations. (Monczka, Handfield, Guinipero,
Patterson, & Waters, 2010, p. xx)

In SC Limited Company, the logistics team has ceded the whole logistics
operations to Agility Bahrain while the SC Limited logistics team is only
monitoring them. After the shipment/transport being done and confirmed
to the logistics team, it is confirmed to the customer service department
that in turn will inform the customer the shipment details. Until a
confirmation from the customer that goods are received with
satisfaction, the order can be closed.
As for the wastes disposal, it is being handled by the finance
department. The first type of wastes is production disposals. SC Limited
buys hard sugar and then crush it to use it in the production. Some of the
sugar is too solid that it cannot be crushed; therefore, the hard sugar
becomes a scrap for the company and sells it to sweet factories. In
addition, the forklifts trucks have a sharp bladed hand that if the lifted
material is not protected with pallet it will cut it. Those pallets are either
manufactured in SC limited or comes with the products. The broken
pallets cannot be used so they send it to a recycling company. Same as
scrap-ruined plastic that cannot be fixed it is being sent to a recycling
company. Thus, some cheese fails at the last stage of production that it
cannot be considered as finished products. These become rework cheese
that need to be reload in the cheese process to reach the needed quality
if there are trimming edges or it needs line changeover.
The second type of wastes is disposal of assists including machines,
computers, equipment and cars. This works when a computer completes
five years old in the company they sells it to buy a new one. (Tamime,
2011, p. xx)

SC Limited is in the middle of the supply chain as it deals with suppliers

and contacts with distributors to distribute its products in order to reach
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the end users. The supply chain structure has two parts, upstream and
downstream. The downstream part is distribution of the products to end
users and the upstream part is the deals with suppliers. SC limited
Company located in Bahrain has various sizes and shapes of Tang such
as, the 102g Tang that comes in sachet, the 2.5kg, the 1.5kg and the
750g. However, I have chosen the 750g jar tang to explain its supply
chain below.
SC limited does not have tear two suppliers as tear one suppliers collect
the raw material themselves. First materials SC Limited purchases are
the component of the tang powder. One important component is crystal
sugar, which is being purchased from AL Arabia Sugar Company that is
located in the kingdom. The second is citric acid and Mp70, which is
provided by Golden Falcon general Trading. Moreover, the tang includes
salt that is bought from Al Halwachi Salt & Food Stuff Factory. SC limited
Company produces the fruits flavors internally in its factories to use it for
Tang production and the company sells it as well, however, the internally
produced flavor is also sold for other intra company related parties.
Furthermore, the glass bottles that contain the powder is supplied by
Saudi Arabian Glass Company which is a vendor specialized in making
the Glass bottles as per customer requirement and this company is
located in Saudi. Thus, Saudi Packaging Industry supplies SC Ltd
Company with the papers that covers the glass bottles as per SC Ltd
design. As for the cap that covers the bottle, it is made by Precision Tube
Company that is located in United Arab Emirates. This cap is being
provided with coordination of the procurement team to be adjusted as
per the bottle size. In addition, the logistics team contacts Bahrain Pack
Company to provide the dividers and shippers needed for placing the
items in the display boxes that are being shipped for the customers
As a final point, once all required raw/pack materials all received and
collected, the logistics team checks if the order is correct. Then, the
logistics team contacts the production department to start producing the
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finished goods, which is the tang and cheese. Afterwards, the goods are
transferred to the warehouse waiting for the logistics team to coordinate
with Agility Company to arrange for truck to be either exported directly
to the distributor or else stored in agility warehouse, as sometimes SC ltd
warehouse might not have enough storage area.
As for the downstream, SC ltd Company has an agreement to sell its
products to distributors such as, Moyya Trading, AlAwjan trading, Gulf
Trading Company and Al Arabia Trading. Each one of these distributes is
referred to as tear one distributer and hey have their own transportation
to transfer the goods delivered to them by Agility Company to the cold
stores they are dealing with. In Tang supply chain, tear two distributors
are these cold stores and they are customers but the people who buy the
product from the cold store to use it are the end users.

Information Flow

Supplier

Marketplace

SC Limited Manufacturer
Cold store
Customer

SC Limited Manufacturer

Material Flow

Distributor

Cold store

This illustration shows the information and transportation

(material) flows in SC Limited Company. (InTech, n.d.)

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Page 8 of 15

This diagram shows the supply chain structure of SC Limited

Company and its four streams

3.0 Importance of transportation and information

flows in supply chain efficiency
The transportation flow includes imports, exports and distribution in
Bahrain. Agility Logistics is taking care of the imports clearing of all
raw/pack materials from the port, which is referred in SC Limited
Company as Inbound clearing activities. Moreover, since SC Limited flow
of materials is huge, the agility logistics is taking care of storing some of
the materials, which are not urgently required as per the production
team plan, which is also being informed by the logistics team of SC
Limited Company. Once the required material is cleared from the port
and stored in agility warehouses, it starts being transferred to SC Limited
Company warehouse as per the requirement and orders by the logistics
team aligning with the production plan. The operation of transferring the
materials from Agility warehouse to SC Limited Company warehouse is
referred to Shuttling process. The number of shuttles as per SC Limited
Company logistics team is around 60 trucks per day in the peak period
while in the normal period it is around 20 trucks bearing in mind that the
factory operations are 24/7 as per SC Limited Company, the peak period
is the first 3 months before Ramadan.
Furthermore, agility trucks are being offloaded of imported raw/pack
materials then being loaded with the finished products to be stored in
agility warehouses, since it has been agreed between SC Limited
Company logistics team and agility to store the finished products in
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agility warehouses. Once an order is received to ship the finished

products from SC Limited Company logistics team, it is shipped directly
from agility warehouses to the ports or by land. The process of
transferring finished products from agility warehouses to the port or by
land is referred to as outbound operation activity. As for distribution of
the product in Bahrain, from the same finished goods in Agility
warehouse they collect the pickup orders for the distributors SC limited
Company is dealing with. The customer service team has already
confirmed the delivery date and place. Then, the customer service
department passes this information to Agility Company to precede the
logistics operation.
There are different modes of transportation, but out all of them roads
transportation is the best for SC Limited Company. However, for
purchasing from outside suppliers the company uses sea transports
although it takes a long time but usually the company do not need these
materials urgently or else the company orders more material from the
supplier, which they are sure it will be used. As for distributing the
products, this manufacturing company is located in Bahrain; therefore,
its entire customers are in either Bahrain or Middle East countries,
however, special rates are charged for any country outside the
mentioned boundaries. Road transporting is the best in terms of price
and in flexibility because in case any issue occurred in the order, they
can resend the truck since the cost is low. In additions, risk associated
with road transports are much less than transporting by air nor sea, also,
the trucks turnover time is very short and one truck can take few days to
complete delivery while in other modes of transport it might take weeks.
Nowadays, road transportation are able to deliver products to almost
everywhere in the world. The logistics services dropped the world
barriers and made it a small global village connected through a chain of
transports. The headquarter of SC Limited Company is based in USA,
and it has reached global level because of dealing with suppliers,
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vendors, distributors, and customers from all over the world. Therefore,
having worldwide customers expands the business, which impacts
positively on its financial profitable performance.
As for the information flow, it plays a crucial role in the supply chain
external processes. In downstream, information about customers
prevents losses and increases customer satisfaction. For instance, Indian
people do not like cheese but like Tang. This is important information
makes SC Limited Company knows whom to target to distribute its
products. As for upstream, more information about vendors helps
choosing the suppliers whether it is better to get milk from Australia,
Somalia or Sudan. Furthermore, the production team job is to label the
products before sending it to 3PL warehouses in order to transfer the
information of the box contents on an attached piece of paper with the
product boxes. In other words, information is important in the business to
improve quality of the product, reduce costs and delivery time.
Electronic Data Interchange system is used in SC Limited to exchanges
business documents with other companies. Documents such as, invoices,
purchase orders, receipts, sales order and purchase acknowledgement
that is between a consignee and a consignor in the purchase order
process. The second usage is within SC limited to speared data between
various departments. For instance, the logistics team informs to the
production department that the materials are delivered by sending a
letter to a data center where they are converted to a language readable
by a Web browser. Then, a notification arrives at the other device without
any delays, errors or costs. The third usage of EDI system is transferring
funds automatically as the date and price of payment is written in the
PO. As for receiving money from distributors, SC Limited accepts credit
card and cash payments after sixty days from delivering the goods . (Free
Encyclopedia of Ecommerce, n.d.)

Aside from EDI system, SC Limited has two other systems. The first type
is between SC limited and SC limited (other branch), if the other partner
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needs some material or wants to buy from its fruits flavors that it
produce, SC Limited applies intercompany transactions to sell to them at
a cheaper price. The second type is that the same information of
material listed in SC limited system is aligning with 3PL system. In order
to accomplish that, 3PL Company sends their report to SC limited and
vice versa to reconcile the documents.
An efficient supply chain uses advanced technology to run the
information and advanced transportations delivery to worldwide
customers and vendors. This results in faster, less cost, less errors,
efficient supply chain structure.

4.0 Logistics operations impact on customer

satisfaction
An organized logistics system contributes in making an efficient and
smooth supply chain that leads to the customer satisfaction. No effort
within the company would bear fruit if the logistics operations were not
being handled accurately.
As has been mentioned, SC Limited Company handed its logistics
operation to Agility Company, which is known as third party logistics.
There are several advantages for using outsource company rather than
in-house operations in terms of better outcomes. Initially, it is obviously
clear that relying on another company to do a certain job saves the other
party effort, time, and resources. SC Limited Company benefits from this
in focusing on excelling the quality of the product instead of worrying
about complex transportation operations. Also, outsources companies
are specialized in transportation and warehousing therefore, they ensure
that the customer is satisfied and the work is being done timely
accurate. Secondly, having more reactive and flexible supply chain that
accepts changes and adapts to customers requirements. For instance,
giving customers the option of postponing the delivery of the product to
their desired date can make the customer satisfied and gives SC Limited
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Company a competitive advantage. A third benefit is that SC Limited is

technically a customer for Agility Company, therefore; in case of any
damage in the items SC limited can claim the 3PL and ask for
compensation. This in order to be satisfied as a customer and as in order
to satisfy its own customers. A fourth advantage is saving money, since
SC Limited is only paying for Agility Company services and the space the
goods take from Agility warehouse rather than paying the rent for the
entire warehouse including the space they do not use it is cheaper.
Therefore, reducing the costs of logistics operation creates extra money
to promote the product itself and reduce the delivery charges on the
customers. (Bert Markgraf, n.d.)
Moreover, the logistics operations make an improvement in the customer
satisfaction by reducing the lead-time as well as the delivery time. There
are three types of lead times, the inbound logistics, outbound logistics
and manufacturing lead times that affect SC Limited performance. The
less the lead time the more flexible the supply chain. The inbound
process is the clearing from port or supplier to 3PL warehouse and the
outbound is the transferring from 3PL warehouses to customers. For
example in inbound logistics, SC Limited Company most suppliers are
close to the factory or located in Saudi Arabia which as calculated takes
ten days to receive the wanted material form all suppliers for production.
This means SC Limited needs to know what they are going to produce
ten days in advance, which also means that their flexibility level is ten
days. Therefore, in case of any changes in the market SC limited can
readjust on the eleventh day. As a result, reducing inbound logistics leadtime dramatically contributes in reactivity and all of this gives SC Limited
a competitive advantage that enhances the customer satisfaction and
eradicate overproduction. (Robert Martichenko, n.d.)

5.0 Conclusion
To conclude, SC Limited company departments are cooperative to deal
with supplier in order to produce Tang and cheese. Moreover, the
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advanced information and transportation flows result in an efficient

supply chain. Eventually, using 3PL and reducing logistics lead times
increased the flexibility and customer satisfaction.

6.0 Reference

BBC NEWS. (2012, March 21). Cadbury owner Kraft names spin-off Mondelez. BBC
NEWS. Retrieved from http://www.bbc.com/news/business-17465085
Bert Markgraf. (n.d.). How Do Third Party Logistics Improve Customer Satisfaction? |
Chron.com. Retrieved from http://smallbusiness.chron.com/third-party-logisticsimprove-customer-satisfaction-65708.html
Bitpipe. (n.d.). Food and Beverage Industry. Retrieved from
http://www.bitpipe.com/tlist/Food-and-Beverage-Industry.html

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Free Encyclopedia of Ecommerce. (n.d.). E-Procurement - PROCUREMENT METHODS,

PROS AND CONS - Edi, Companies, Online, and Electronic. Retrieved from
http://ecommerce.hostip.info/pages/422/E-Procurement.html
InTech. (n.d.). Furniture supply chain flows (Jardim-Goncalves et al., 2007) [Diagram].
Retrieved from http://www.intechopen.com/books/supply-chain-managementnew-perspectives/standards-framework-for-intelligent-manufacturing-systemssupply-chain#F1
Monczka, R. M., Handfield, R. B., Guinipero, L. C., Patterson, J. L., & Waters, D. (2010).
Purchasing & supply chain management. Retrieved from
https://books.google.com.bh/books?
id=3DfUGeHp0hgC&pg=PA43&lpg=PA43&dq=checks+the+purchase+order+w
ho+supply+chain&source=bl&ots=CXt6lIvf8K&sig=d3tj-MDu5UGatK8JdtuSmT2DwY&hl=en&sa=X&ei=O0HVYCvEYOuUYbGgZgJ&ved=0CDgQ6AEwAw#v=onepage&q=checks%20the
%20purchase%20order%20who%20supply%20chain&f=false
Robert Martichenko. (n.d.). Questioning the Global Supply-The Power of Lead Time.
Retrieved from www.logisticsquarterly.com/issues/13-3/article2.html
STEPHANIE STROMMAY. (2012, May 23). For Oreo, Cadbury and Ritz, a New Parent
Company. THE NEW YORK TIMES. Retrieved from
http://www.nytimes.com/2012/05/24/business/mondelez-is-new-name-for-kraftssnack-foods-company.html?_r=0
Tamime, A. Y. (2011). CHAPTER 6. In Processed cheese and analogues. Retrieved from
https://books.google.com.bh/books?
id=bdaDYXzofrUC&pg=PT167&lpg=PT167&dq=rework+cheese&source=bl&ots
=LXjB1gLB4u&sig=b6qG2h2b_rcyx_n_IymgDJDxls&hl=en&sa=X&ei=ozUMVeOOEIP8UJmDgrAO&ved=0CCkQ6A
EwAw#v=onepage&q=rework%20cheese&f=false
Vault. (n.d.). Vault. Retrieved from http://www.vault.com/industriesprofessions/industries/food-and-beverage-production.aspx

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