International Trade Operations - Parmalat

Topics: Milk, World Trade Organization, Supply chain management Pages: 15 (4354 words) Published: April 4, 2011
International Trade Operations
Parmalat Australia

1.1 Abstract2
2.1 Introduction2
3.1 Parmalat Company Overview3
4.1 Method3
5.1 Costs of production3
6.1 Determinants of Production Location3
6.2 Political and Social Environment3
6.3 Infrastructure, Communication and Trade Relations3
6.4 Factors of Production3
7.1 Logistics and Distribution3
7.2 Inbound Logistics3
7.3 Distribution networks and transportation3
7.4 Reverse Logistics3
8.1 Problems, Risks and management3
9.1 Conclusion3
10.1 References3
11.1 Appendix3
11.2 Questionnaire3
11.3 Minutes3
11.3.1 Meeting 13
11.3.2 Meeting 23
11.3.3 Meeting 33
11.4.1 Corruption Perception Index3
11.5.1 Political Instability Index3
11.6.1 Free Trade Agreements3

1.1 Abstract

The essence of this essay focuses on Parmalat Ltd and the production & distribution processes of dairy goods, specifically focusing on Singapore as the main logistics chain. The distribution processes and systems whereby inbound logistics & procurement involves local dairy farmers where the company has operations in. Furthermore, the distribution networks of Parmalat are broadly based with 10 distribution centres across various Australian states. Since most dairy products have a short expiry span, emphasis on the closest and fastest possible shipment and delivery to retail shops is taken. The political and social environment of each country is looked at, since issues such as political corruption and red tape agendas make it increasingly unprofitable and can be damaging to the business in the long-term. The Factors of Production that a business needs to consider includes land, labour and capital and the costs associated with them. Lastly, this essay talks about the problems associated with Parmalat’s business operations, the risks that it takes (whether natural occurrences or other unforeseeable risks), and risk management.

2.1 Introduction

In choosing a company to examine regarding international trade operations, considerations regarding product and process needed to be made. Parmalat Australia is a company which is simplistic in product, but large on scale. Having operations focused and isolated in one area, many of the processes and methods for distribution overseas have too been streamlined for the unique needs of both the company’s product and customers. A company designs its distribution network based on principles of strategy. It is created in a way that allows for competitive advantage to be gained through cost reduction, risk management, and market advantage. Parmalat represents just that; a company that clearly has designed its operations strategically, and has benefited greatly because of that. It is here that further examination is required. Questions regarding the actual way which advantage is derived from such strategy, and the problems encountered, is what needs further exploration. Focussing on distribution channels from Australia to south-east Asia, specifically Singapore, show the techniques used but also the risks. 3.1 Parmalat Company Overview

“Parmalat Australia Ltd (formerly Pauls Limited) is a wholly Australian-owned subsidiary of the Italian based global dairy company, Parmalat SpA, having been acquired by public takeover in August, 1998. Parmalat expanded its market milk and dairy products operations to Victoria in 1992 with the acquisition of Sandhurst Dairies and subsequently acquired Associated Dairies by public takeover in 1993. In Victoria Parmalat has approximately 514 employees and operates plants at Rowville (Melbourne) and Bendigo. Its intake of raw milk from 163 suppliers in Victoria is approximately of 216 million litres. Parmalat group also processed approximately 208 million litres of fresh market milk in 2006 through its plants in Bendigo and Rowville, Victoria and distributes and sells this milk throughout Victoria. The company maintains strong market share nationally as a brand leader in multiple...
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