Question

The Kellogg Company (Kellogg's) is an American multinational food-manufacturing company headquartered in Battle Creek, Michigan, United States. Kellogg's produces cereal and convenience foods and markets its products under several well-known brand names including Corn Flakes, Keebler, and Cheez-It.

3. a) Describe how Kellogg’s’ procurement team could have mitigated the risks associated with outsourcing production to a contract manufacturer in this situation. (3 points)

b) Describe the ethical risks associated with contract manufacturing in this situation. (3 points)

c) Based on the strategic importance of contract manufacturing, which Supplier Interaction Model best describes the relationship that exists between Kellogg’s and Kerry Inc. What should it be? Why? (4 points)

d) Identify and explain the Processing Stages that Kellogg’s might have followed in conducting the recall. (10 points)

Answer 1

3) a) Describe how Kellogg’s procurement team could have mitigated the risks associated with outsourcing production to a contract manufacturer in this situation. (3 points)

The risk of making sure that the chosen company has the ability to nurture Kellogg’s project should be taken into consideration. It should be considered that the risk of actually ensuring that the chosen organisation has the potential to grow Kellogg’s venture. The procurement department will have to examine the maturity of the company in terms of the duration of operation, the number of successful projects carried out by the company receiving input from the past and current customers of the company. It should be considered the risk of actually ensuring that the chosen company has the ability to nurture Kellogg’s project. The procurement department will have to examine the maturity of the company in terms of the duration of operation, the number of successful projects carried out by the company receiving input from past and current clients of the company.

A second threat to be mitigated by the acquisition department is the loss of control. This can be done by ensuring the proper explanation of the way of cooperation. The plan should also be carried out in full transparency, such as the timetable of operation and the details on the allocation of assignments by developers.

It is also possible to mitigate the invisible expense risk in various ways such as being keen on how the organisation offers its forecasts and also on their description of money distribution.

You should also know the types of contracts that the outsourcing company accepts. You also need to ask if the deal needs VATs and other related charges.

b) Describe the ethical risks associated with contract manufacturing in this situation.(3 points)

Under the outsourced company, employees are likely to be paid less than if they were to work for the main company. The ethical guidelines of the company are likely to conflict with the guidelines of the outsourced production company. For example, in order to obtain permits, the company may be forced to offer bribes to government officials. There is a higher risk at the local level as outsourcing makes it possible to hold the third party accountable.

c) Based on the strategic importance of contract manufacturing, which Supplier Interaction Model best describes the relationship that exists between Kellogg’s and Kerry Inc. What should it be? Why?

The best supplier model describing the relationship between Kellogg and Kerry Inc. is model four in which the company interacts with supplier using information systems the amount of order as well as the time of delivery. I believe that Model Five would be the best in this scenario as it allows the company to be aware of all the activities taking place at each time, so it can make plans to ensure that the services offered are up to date.