Kellogg's

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BA 512 (660) Case study #3 Kellogg’s Vera 932110003

The Kellogg’s Cornflake Company began in 1906 in Michigan, USA. Its mission is to “drive sustainable growth through the power of our people and brands by better serving the needs of our consumers, customers and communities.” To fulfill this mission, Kellogg’s sets up some objectives. They include establishing a system called just-in-time, reducing the cost, and cutting down carbon emissions. However, these objectives can be contradictory. For example, the relationship between just-in-time system and the goal to reduce the cost is somehow conflictive. The just-in-time system is to provide an efficient stock inventory. It enables just enough product is made to fulfill orders and limited stock is kept. In this case, using this efficient system would help Kellogg’s and its customers like ASDA and Tesco to reduce stocks. However, in order to achieve this objective, Kellogg’s may need to spend a lot of money on distribution to avoid late deliveries or inability to deliver. This is in contradiction with another objective - to reduce the cost. Cutting down the cost is one of the most significant objectives of Kellogg’s since it enables benefits of the company, the shareholders and its employees. To address these contradictions, Kellogg’s adopted collaboration with Kimberley and TDG in distribution. They shared transportation to lower cost. (Customers are guaranteed deliveries on time and deliveries are cost effective as lorry capacity is used effectively.) Meanwhile, Kellogg’s employed the lean production system to streamline processes and eliminate waste. The collaboration of industrial within the supply chain no only enables Kellogg’s to use the just-in-time system to reduce its own and its customers’ stocks, but also helps the company to lower cost to earn profit.
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