Robustness in Logistics and Supply Chain Management
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Executive summary
Robustness in Logistics and supply chain management is among the concepts that are
currently dominating the debates regarding companies. in order to maintain a competitive
advantage and a good relationship towards clients firms must practice and adopt responsible
supply chain management. On the wake of health issues as well as cultural differences global
organization’s supply chains are being pressured to adopt responsible and robust strategies.
Essentially the Western Australian grain suppliers serve both the Saudi Arabia and Japan. The
Saudi Arabians require that their grains be added carmoisine a food additive whereas Japan
forbids substances such as carmoisine. This case study involves the detection of carmoisine food
additive on grains delivered to Japan. The Western Australia grain suppliers faced problems with
regard to the ‘unhealthy’ grains delivered to Japan and which may have been avoided if proper
measures were incorporated. Adopting robustness and responsibility in logistics and supply chain
strategies entails taking into mind the needs of the client at all times.
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Introduction
Responsible and robust Organizational Performance in Logistics and supply chain
management points to the appropriate handling of a client’s cargo to ensure a continued good
relationship with client companies by wholly adhering to their specifications and requirements.
Additionally, responsibility calls for making sure that the end user is not negatively affected by
the products. In this case study involving the Australian grain exporters and the Japanese
importers robustness and integrity refer to supplying items which are cannot extend negative
health issues to the consumer. If a product would make the consumer unwell then this product is
unhealthy. Adopting fresh methods, for instance, innovative logistics and supply chain
management methods, quality handling systems and emerging technology will definitely affect
the various elements of supply chain management. The challenge of establishing a flourishing
and responsible organizational performance supply chain through networked collaboration as
well as remarkable innovation is a thorny issue. The Western Australian Suppliers had a duty to
ensure satisfaction and adherence of each and every client product specification via improving
their organizational performance..
Factors leading to a bad relationship between Australia and Japan
The detection of carmoisine (a food color additive) on Australia’s noodle wheat shipment
towards Japan initiated the relationship breakdown between the two nations. Carmoisine is a
food additive which is banned in Japan as well as other states such as the US for the reason that it
increases infants’ hypersensitivity (Manuj, Omar & Yazdanparast, 2013). The issue surrounding
the carmoisine additive concerns the shipment which was delivered to Japan containing that
additive. The events leading to the contamination were that grains delivered to Saudi Arabia are
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usually added the carmoisine. The conveyer belts loading the ship are usually sprayed with
carmoisine to make them unique and differentiate them from those of the black market.
However, after loading the Saudi destined shipment the conveyer belts were not thoroughly
cleaned or decontaminated, this lead to Japan’s shipment contacting the carmoisine on the
conveyer belts. The stringent quality tests in Japan detected the additive’s presence which
generated a huge row and lack of quality outcry regarding Australia’s exports. Consequently,
Japan rejected the entire shipment leading to huge losses being experienced on the side of
Australian exporters. To make the matters even after the assurances of Australia regarding their
quality checks this incident happened again (Rai, Patnayakuni & Seth, 2006). Another shipment
of noodle wheat was detected having the carmoisine additive; this incident worsened the
relations between Japan and Australia.
Robust Organizational Performance in Logistics and supply chain management
Robust and responsible organizational performance in general refers to the organization’s
ethicality in carrying out its operations by protecting the health and wellbeing of the product end
user. Accountability in performance by any organization within the supply management calls for
carrying out the activities in a diligent manner with the help of knowledgeable staff and
technology. Thus, robustness will be defined as an organization’s processes, services and
products being aligned in ways that are socially as well as economically responsible (Uvarov,
2011).
Business demands trust along with integrity amongst partners within a supply chain. Clearly
the Western Australian Suppliers performed below expectations to upholding trust in
collaboration between supply chain partners (Rai, Patnayakuni & Seth, 2006). Within the robust
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supply chain context, Western Australian Suppliers should seek to transform the practices of
handling goods which seems to be informed by traditional reasoning. Therefore the phrase
corporate social responsibility covers factors linked to ensuring a sustainable and viable
organization (Grant, Wong & Trautrims, 2013). The sustainability organizational performance
implementation within Western Australian Suppliers supply chain should comprise of the
following:
i) Process innovation aimed at introducing fresh grain handling techniques along with
conveyor belt cleaning improvements to match evolving market as well as
consumer’s sustainability needs
ii) Clean handling entails reducing or eradicating toxic as well as hazardous material,
within during the handling and transportation of grain products
iii) Reverse logistics entails planning, adopting as well as controlling or regulating the
flow of products as well as associated information or data from the customer to the
Western Australian Suppliers for proper disposal or value recapturing purposes
(PAULRAJ, 2011).
iv) Life cycle management or LCM supervises the potential negative impacts linked with
a product, service or process, as from the level of grains harvesting, handling at the
port all through to the transportation to the destination
Solutions That Would Have Prevented the Second Contamination
Owing to the fact that the Western Australian Suppliers were aware of the fact that Japan
disallows carmoisine the second contamination was avoidable very much avoidable. Both the
marketer and the bulk handler declined or failed to collaborate in order to prevent a second
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contamination (Omar et al., 2012). The two parties would have coordinated a more responsive
and comprehensive approach to ensure that Japan’s cargo is never again contaminated. To start
with, a separate loading conveyer should have been used to load cargo destined for Japan and the
one destined for Saudi Arabia. This would have reduced the chances of carmoisine
contamination. Secondly, thorough cleaning as well as decontamination measures should have
been employed after every Saudi shipment is loaded. Other measures include (Grant, Wong &
Trautrims, 2013):
a) Supply chain operations Reference or SCOR model
A characteristic production supply chain possesses numerous participants that comprise a
number of distinct but interrelated operational as well as managerial activities, and within
producers are invariably positioned centrally supervising the product flow, information, finance
and material (Manuj, Omar & Yazdanparast, 2013). The Western Australian Suppliers activities
may have been categorized into primary management processes namely: plan, source, create or
make, deliver as well as return and which are sourced in supply chain process model or SCOR.
SCOR processes extend as from supplier’s supplier up to customer’s customer within the supply
chain. SCOR should have been adopted by the marketer as well as the bulk loader to adopt a
more responsible supply of products by assessing the existence of any pollutants. The capacity of
managing varying supply chain activities within a suitable along with cost effectual manner has
become progressively more significant to producers so as to remain competitive within their
markets (Grant, Wong & Trautrims, 2013).
The Western Australian Suppliers should also have used SCOR to establish procedures that
the supply chain would not deviate; this would be done by clearly stipulating them. For instance,
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the hygiene issues should have been properly stipulated by SCOR; the steps used in
decontaminating the conveyor belts should have been properly laid out (Omar et al., 2012).
The electronically-enabled manufacturing supply chains or EMSC provide potential to attain the
objectives by allowing business partners within the supply chains to incorporate their
information resources within varying supply chain points to improve efficiency as well as the
firms’ competitiveness (Hult, Ketchen & Arrfelt, 2007). EMSC could also have been used to
detect whenever the conveyer was insufficiently cleaned. It would have given the alert to the
bulk handler that the conveyer is unsafe for handling the cargo to Japan. The blame game
experienced in Australia resulted from communication breakdown; the EMSC would have
bridged the gap to by enabling effectual information exchange between the marketer and the bulk
loader. Thus with the ICT emergence along with its underlying structures EMSC is gradually but
steadily being adopted by producers to make their supply chain more sustainable (Florian, 2013).
b) Organizational Responsibility Adoption as a Business Innovation
After the first carmoisine case was registered the Australian supply chain partners should
have initiated the adoption of innovation as well as technology in handling cargo testing in order
for addressing accountability issues. Adopting robustness within the supply chain’s enterprises
introduces changes in supplier coordination along with a selection that may comprise
establishing linked information systems between the Japanese and the Western Australian
Suppliers along with reengineering the daily activities (Florian, 2013). To aid the Australian
marketer as well as a bulk handler in generating right decisions throughout the whole resolution
process the Innovation Diffusion Theory or IDT may be helpful. IDT stresses that the resolutions
for adopting innovations is impacted by factors which lead to diverse effects hierarchy. IDT
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should have been used to ensure constant innovation is carried by Western Australian Suppliers.
This innovation may have involved using cranes to lift the Japan’s cargo or inventing a machine
that is able to detect carmoisine traces on the conveyor after cleaning it (Hult, Ketchen & Arrfelt,
2007.
Importance of collaboration in the international Agri-food market supply chain
Agri-food is the most sensitive industry since it directly impacts the health of the end-
product user. This industry demands the top most possible collaboration between supply chain
partners. Collaboration refers to the act of working together between the supplier and the client
including all other stakeholders (Omar et al., 2012). A stakeholder in this case refers to any
individual or entity that may affect or be affected by the firm’s operations. Stakeholders may
involve suppliers, clients, regulators and farmers. To begin with the Western Australian
Suppliers section of the supply chain would have requested that a Japanese official be stationed
at their port as show of commitment towards quality goods delivery. The objective of working
with suppliers is to be able to generate product as well as process sustainability innovation (Hult,
Ketchen & Arrfelt, 2007).
After the first contamination the Western Australian Suppliers should have started to
demand that the marketer and grain handler shares crucial information regarding their processes
at all times. For instance, they may be requested to give information regarding the data acquired
during the testing for contaminative substances as well as the methods used. Partnering and
incorporating the Japanese supply chain partners views into the sustainable supply chain
integration along with ensuring that they at all times conform with the set regulations then a firm
will be able to adopt a lasting suitable and efficient supply chain. Better caution should have
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been observed, for instance before the ship moved out the Australian Port the Japanese officials
would have been welcomed to make random tests of carmoisine existence (Gligor & Holcomb,
2012).
The impacts of a Supplier’s failure to adhere to an efficient supply chain
The impacts of the failure by the Australian suppliers to adhere to the agreed quality
guidelines led to the loss of business as well as trust between the trading partners. The most
crucial party in ensuring a responsible supply chain is the suppliers. This is because more than
any other stakeholder the supplier’s materials may extensively damage the reputation of a firm.
Research has confirmed that suppliers role within the supply channel is huge and thus there
compliance as well as adherence to the set strategies is crucial. The Australian suppliers lost a
lot cargo since it stayed at the Japanese port for days. a great volume of cargo went bad as a
result, the remaining cargo was sold at a throw away price; the farmers lost revenue in billions.
The fact that the carmoisine contaminated foods were located for the second consecutive time
means that a clear carelessness of the Western Australian Suppliers (Hult, Ketchen & Arrfelt,
2007).
Contributions of the management in supply chain performance management
For performance to be successful the top management has a duty to support and foster its
implementation. It is clear that Western Australian Suppliers management failed miserably. After
the first contamination the management would have put better measures and extend clear
guidelines to employees regarding the hygiene in cargo handling. Lack of support from the top
management, means that the efficiency goal might not be attained. Additionally, healthy
products delivery demand constant innovation of products that are efficient; this climate can only
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be extended by the top management. The Western Australian Suppliers management resolved to
cling on the traditional methods of non-innovative supply chain management; the entire
relationship breakdown with the Japanese and loss of revenue by farmers lies squarely on
management (Omar et al., 2012).
Justification of quality for the Australian grain suppliers
It would be argued that the Australian suppliers had effectual and robust quality
management measures. This is for the reason that the suppliers had for many years been
observing the quality issue and not once did the carmoisine contamination occur. Secondly, after
the first contamination occurred commitment was made to observe and prevent future
contamination. And one may conclude the second contamination was by accident. Further, the
contamination occurred in the process of ensuring quality for another client’s cargo. Thus the
issue was not that Australian suppliers lacked proper quality standards, the issue was that quality
definitions and expectations of the two suppliers conflicted (Gligor & Holcomb, 2012).
Recommendations
Adopting an efficient organizational performance in logistics and supply chain management
in the contemporary times is inevitable for a supplier. Western Australian Suppliers clearly failed
the test of a robust organizational performance in supply chain and logistics (Clark, Toms &
Green, 2014). The following are recommendations for Western Australian Suppliers towards
building a responsible organizational performance in supply chain logistics;
Western Australian Suppliers require incorporating incorporate all stakeholders’ views.
This enables adopt a strategy that has no conflicts
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Western Australian Suppliers must adopt technology as an essential aspect of assessing
issues such as hygiene and quality of products
Western Australian Suppliers should make annual reviews of the performance of the
available supply chain and logistics strategy to determine its success; such that if
unsuccessful modifications should be effected
Western Australian Suppliers must collaborate effectively with their Japanese
counterparts’ right from the port from cleaning the conveyer belts, testing the existence
of carmoisine and also during loading the ship. This will create trust and reduce chances
of contamination (Clark, Toms & Green, 2014)
All employees require training to ensure that their knowledge s aligned with that of
responsible and accountable organization performance in supply chain and logistics.
Clearly if the employees had enough knowledge the second contamination could not
have been possible
Western Australian Suppliers may also consider creating a separate conveyer belt for
transporting the grains headed to Saudi Arabia. This is because only grains headed to that
country has that special requirement which would contaminate other grains.
Conclusion
The Western Australian grain suppliers faced numerous problems due to their inefficient
organization performance in supply chain and logistics. This was as a result of negligence since
it happened twice. Lack of proper communication between the grain handlers and the marketer
led to huge losses of revenue and also loss of a reliable client. Lack of involvement of
stakeholders views led to effectual robustness since it might be biased. It is imperative for the
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Australian suppliers incorporate the views and expectations of their consumers to safeguard other
stakeholders such as farmers and the government from losses. Indeed the hygiene issue was a
very minute element to take care of, however the mismanagement, staff negligence of Western
Australian Suppliers did costs the company a lot of money. It is important that the top
management is initially oriented with the importance of adopting the responsible and efficient
supply chain to ensure its success since at all times employees look upon their superiors’
attitudes as well as behaviors. The Western Australia grain suppliers have a duty to satisfy the
needs as well as demands of both their clients without offending the other. Client’s specification
and demands should at all times be intricately associated with varying aspects of the supply
chain. The awareness regarding such aspects is shown within the contemporary business setting.
Companies are urged to adopt a comprehensive responsible and robust strategy that will
incorporate views of all stakeholders. Adoption of technology by Western Australia suppliers
would perfectly assure a reliable organizational performance in supply chain management; this
would in a great way enhance relationships with all clients. The company also requires to at
times examining the suppliers tendencies towards adhering to the robust set supply chain
strategies.
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