Logistics is the detailed planning that is done in a supply chain as part of the supply chain management efforts towards coordinating sourcing, manufacturing and movement of goods to the end consumer, thus satisfying customer requirement. Logistics at each stage attempts to contribute something to meet customer requirements. At each stage of the supply chain, the contributing logistics varies as the aim is to add to the overall usefulness of the supply chain by making that stage exemplar.
In the production of feed for cows, feed quality is checked. Cows feed time and health regulations will apply in the milk production centre. In transportation, information systems for checking refrigeration temperature would be implemented. Fonterra will have information systems for quality checking. Distribution warehouses and the retail end point will have the necessary systems to keep products in the right temperature until end consumers purchase. Warehouses make use of Exceed.
Each point adds values, for instance, the refrigerated truck distribution ensures that the product is kept cooler so as to meet recommended expiry date. Retailers will hence not suffer loss because of lost shelf life. There are areas of loss. For instance, demand and supply at the end consumer end could be a problem zone. Where end consumer does not need much product, they would not buy it, and this could threaten the stability of the supply chain.
The retailer would be responsible for forecasting needed (demand) milk volume as well as warehouse parties. The retailer responsibility is fair and equitable as they are the ones who deal with the direct consumer demands. Thus, they will have a better chance to gauge the consumption rates and should request for products based on that demand. However, based on supply end, it could be said that the producer should forecast what volume he can supply.
In the last 4 years, much of the work within Fonterra and its associated partners in the supply chain have become automated because of information systems and tools. For instance, the use of Agrigate, which prototype was launched in 2016 with 70 farmers helped them to plan ahead for supply based on different farmer assessments, weather conditions and animal health etc. Agrigate helped farmers to track effects of factors on one another. This empowers the warehouse process system. A higher than usual capital expenditure was faced by the company when they were transitioning to the use of information systems, but over time, this changes as benefits can be reaped with their use (Gray, 2017).
b. The use of these information systems helps to collate information across many of the supply end sources. Information was disseminated in parallel to everybody. However, this form of information dissemination might serve as a hindrance to the normal way of communication and relationship building between different human entities in the supply chain.
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