Supply chain development can bring benefits to most manufacturing enterprises.
Nestle
Company is also one of many enterprises in Australia that has applied supply chain to produce
and sell more effectively, especially when producing the Milo power Milk.
Diagram 1: Supply chain of Milo power Milk diagram
INBOUND LOGISTIC
Supply of inputs (raw materials):
Inputs of Milo milk production include raw milk and other necessary additives such as
cocoa powder. Dairy material is purchased from farmer households and domestic cattle farms.
Other materials are imported.
This is the first actor of the supply chain. Farmers and cow farms play a role in supplying
raw milk for production through milk collection stations. Milk was purchased from farms must
always meet quality standards. Raw milk must undergo a rigorous screening process after
receiving it based on the following criteria:
- Appearance of the milk: Delicious, naturally flavored, and without any odors.
- Quality of milk: freshness, acidity, content of heavy metals, milk origin.
For fresh milk raw materials purchased from farms, the process of purchasing raw milk is as
follows:
Milk collection Processing
Farm
station plant
The milk collection center has the role of purchasing raw materials from farmers, cattle farms,
weighing, milk quality inspection, storage and transportation to the factory. The center can also
inform farms of the volume requirements of the material.
Other ingredients such as cacao powder can be imported through intermediaries or directly
imported and then transferred to the factory. Some of the suppliers of Milo milk powder are
typically Hoogwegt International, Tetra pak Indochina (Nesle, 2017)…
Input of supply chains play an important role in the creation of good quality products that meet
the needs of consumers. Therefore, the company needs to set long-term and sustainable
development goals for both domestic and foreign suppliers. This will help the company to ensure
a stable source of raw materials, good quality at competitive prices.
Production process
After the milk is transferred to the processing plant and tested several times before the milk into
the production line
Diagram 2: Milo Powder Production Process Diagram
Raw material
Standardized
Mixing the
ingredients
Pasteurization
Packing
At the factory: the factory has the role of receiving raw milk from the milk purchasing center or
from the suppliers of imported milk material and performing the production phase. Dairy
products and additives are subjected to a number of processes such as standardization,
conditioning, assimilation, pasteurization, drying, pulping, packaging and finally Milo milk powder
(Nesle, 2017).
Storage at warehouse:
Once the product has been packaged, it will complete the production process and be stored at
the company's warehouse in accordance with quality standards.
Highlights of the production process Milo powder milk production line is closed. The company
also applies food safety and management systems to all plants in the system. The heat treatment
process is also strictly monitored. The heat treatment regimen is carefully selected to ensure the
highest nutritional value of milk and cocoa. Prioritize the heat treatment mode in extremely short
time. This is one of the most advanced milk powder manufacturing technologies in the world.
After finishing the packaging, Milo products will be put into the warehouse near the factory. The
warehouse of the product is very near from the factory so it will reduce the cost of shipping the
product (Nesle, 2017).
OUTBOUND LOGISTICS
Outbound logistics related to the movement of milk powder from the plant milo to stockpile
goods in different cities in order to ease the distribution of products.
However, since the stockpile is near the production site, the delivery of Milo milk powder to
storage is usually rapid.
Distribution
Milo's milk powder is distributed through agents, stores, supermarkets and then to the
consumer. Consumers are the last factor in the product distribution chain.
Dairy agents, shops, supermarkets have the role of receiving products from suppliers and
bringing products to consumers.
Consumers are those who directly consume Milo milk powder. Consumers can buy products at
agents, supermarkets, retail stores.
Currently distributing Milo milk powder through two distribution channels
Traditional distribution channel: distributing more than 80% of the company's output. To support
the distribution network, the company has opened more than 14 showrooms in major cities of
Australia such as Melbourne, North Sydney…
In order to become a distributor of milo powder milk, the business units must meet the
requirements set by the company. After being selected as the distributor of the company, the
company will appoint a supervisor, responsible for guiding and supervising the distributor
business. The company evaluates the distributors through a number of criteria such as coverage,
turnover, distribution, inventory, sales staff, competitiveness, financial capacity, facilities...
Distributed via intermediary channels such as supermarkets. The advantage of the Milo milk
powder company is that there are many factories in many parts of the country.
Managing distribution channels
In order to effectively manage the distribution channels in the market, the company has applied
information technology to management. Typically, some information management programs,
such as Oracle E Business, enterprise human resource planning, and customer relationship
management. Customer Relationship Management (CRM) applications will provide sales staff
with all relevant information about the customer and the customer can exchange information
with the company in many ways, at various times, various points and in many languages
(Khodakarami & Chan, 2014).
Due to the application of information technology, Milo Milk Powder Company has been able to
effectively manage the distribution channels, improve the knowledge of the employees and meet
the needs of consumers.
References
Hackius, N., & Petersen, M. (2017). Blockchain in logistics and supply chain: trick or treat? In Proceedings
of the Hamburg International Conference of Logistics (HICL), 3-18.
Khodakarami, F., & Chan, E. (2014). Exploring the role of customer relationship management (CRM)
systems in customer knowledge creation. Information & Management, 51(1), 27-42.
Nesle. (2017). Nestle. Retrieved from https://www.nestle.com.au/aboutus/locations
