Introduction ( Nyan Wai Lin, Pyae Thinzar Mone)

Australia is included in the top ten honey producing nations in the world ranking with
an enormous production of honey exported to diverse countries in both retail and
mass shipments. In the Australian economy, the honey bee industry is a significant
sector with the approximate gross value of production (GVP) of $147million annually
(2018-2019). According to the Australian honey bee industry report by the Australian
Bureau of Agricultural and Resource Economics and Sciences (ABARES), the
income from the beekeeping industry estimated $70,400 and remarkably higher in
New South Wales, Victoria and Tasmania.

Industry statistics were sourced from Australian Bureau of Agricultural and Resource
Economics (2008), Australian Honeybee Industry Survey 2006-07, Rural Industries
Research and Development Corporation. 
https://beeaware.org.au/industry/

 
In 1953, Capilano was established by Tim Smith MBE and his sibling, Bert who are
apiarists. The family started the business by selling honey in Brisbane, Australia. The
Company turned into an unlisted public organization in 1970 and changed its name to
Honey Corporation of Australia Limited in 1974. It embraced the name Capilano
Honey Limited (CZZ) in acknowledgment of the wide enthusiasm for the Capilano
exchange imprint and brand all through Australia and global economy in 1995. In
1997 the processing plant in Brisbane was reconstructed and the business decreased to
a two-plant activity with the shutting down of the Sydney plant.
 
Capilano Honey is Australia's honey industry leader, transforming high quality honey
supplied by Australian beekeepers into mass products and retail. As a market leader,
the position of Capilano can be seen in the long list of achievements they've earned
for the product and packaging innovations, which are a critical part of the company's
success. The business has a 50-year heritage, and the generations from Australia have
grown up knowing and loving their trusted brand and high-quality honey. Australian
honey is sourced by Capilano from over 600 beekeeping families through Australia,
and is energetic about promoting the numerous health benefits of the honey they
produced.The most natural choice is Capilano Organic Raw Honey. That 100%
Australian Certified Organic honey is produced by the world's healthiest honey bees
in hives from national parks and remote forests, all of which are guaranteed to be
pesticide-free within a 5km radius.The Certified Organic Australian Beekeepers
collected them and produced according to natural guidelines to ensure that each
cluster of this unadulterated, light, tasty nectar is free of pesticides and holds the
entirety of its common goodness.
 
Capilano is occupied in the pressing of honey for both domestic and international
markets. Domestic and Export are two of the company's divisions. The products in the
Domestic segment are available to clients in Australia for use and sale in Australia.
Under the name of Capilano, the company sells honey from Australia in the local
market. Additionally, Capilano is one of the world's biggest honey packers, with an
ability to measure and pack more than 40,000 tons of honey each year and operating
significant markets in Asia, North America, the Middle East, and Europe, with over
40 countries worldwide.
https://au.investing.com/equities/capilano-honey-ltd-company-profile

According to a groundbreaking study that checked samples of local and foreign

branded honey, nearly one in every five Australian honey samples were fake,
including some expensive boutique honey. More than half of the honey samples from
Asia, mostly China, were found to be adulterated, indicating the honey had been
mixed with non-honey substances. This report will focus on environmental
sustainability in supply chains in general by providing a detailed case study of
Capilano. With the recent emphasis on sustainability, there is an increasing need to
incorporate environmentally friendly choices into practices of supply chain
management.
https://www.abc.net.au/news/2018-10-03/almost-20-per-cent-australian-honey-found-
not-pure/10327988
 
 
Supply Chain issues and risks (Nyan Wai Lin, Pyae Thinzar Mone)
 
Weak quality management and sustainability are two supply chain inefficiencies that
we have described as being the cause or inferred from the recent testing.
 
Quality management is one of the most visible supply chain problems surrounding the
fake honey crisis. The Australian Competition and Consumer Commission (ACCC)
has concluded its inquiry into allegations that Capilano Honey Limited (Capilano)
violated the Australian Consumer Law by making misleading statements about its
‘Allowrie' honey and other products. Capilano had taken measures to give assurance,
and the ACCC inquiry found no other evidence to support the charge that Capilano's
'Allowrie' honey was adulterated with sugar syrup. According to reports in the
Australian media, a mix of blossom honey sold under Capilano's Allowrie brand was
found to be adulterated in most of the tested samples. Capilano's Allowrie honey,
labeled as "pure" and "100 percent honey," was found to be adulterated with sugar
syrup in the test. According to a series of tests conducted by Quality Services
International (QSI), a well-known German testing agency, on a series of Australian
honeys, most of the honeys labeled 100% honey under Capilano are mixed with rice
syrup (rice syrup) and beet syrup (beet syrup). ), and even some other undetectable
substances. The findings are expected to spark a firestorm about how honey purity is
measured, involving the federal government, as well as local and international
regulators. As a precaution, of the 28 types of honey sold in supermarkets, including
Coles, Woolworths, ALDI and IG, 12 are adulterated. Capilano has been blamed for
using cheaper overseas replacements in their goods before and this is not the first
time.
 https://www.abc.net.au/news/2018-09-03/capilano-and-supermarkets-accused-of-
selling-fake-honey/10187628?
fbclid=IwAR1q16ntaPPtBvQuvPIQXwR11oXZpWY5L6kG-d7BQeLcuBKeu5VX-
NWqEKg

https://www.accc.gov.au/media-release/honey-investigation-concludes-due-to-testing-
uncertainty
 
https://www.smh.com.au/business/consumer-affairs/capilano-supermarkets-accused-
of-selling-fake-honey-20180827-p5000u.html
 
In 2016, Capilano battled with local bee farmer Simon Mulvany in a defamation
lawsuit. During that time, the company stated that

"All imported honey is comprehensively tested and undergoes rigorous quality

assurance testing to ensure it meets the quality standards set in place by the
Australian Quarantine and Inspection Service (AQIS) and Food Standards Australia
and New Zealand (FSANZ). Capilano is proud to say that it has never failed this
quality testing." Capilano CEO Ben McKee 2016 [2]

However, Capilano immediately issued a statement saying that all of its honey
complies with its product promotion, and in a statement submitted to the Australian
Securities Exchange (ASX) that the company had previously discovered nuclear
magnetic resonance (NMR) detection impurities used by European laboratories. The
test results are inconsistent. To their credit, the company has met and continues to
meet standards of Australia. The C4 test is used by the Australian government to
check 5% of honey shipments for sugars extracted from plants such as cane and corn.
This test was performed on the same samples that were subjected to the GQSI's NMR
analysis, and the findings revealed no impurities.Although there is a recent dispute
about which test is more reliable, it appears that adulterated honey producers are
working on ways to circumvent the C4 test [3]. The fact that China's bee hive
numbers increased by 6.7 percent from 2006 to 2016, while honey exports increased
by 200 percent [6] backs this up. In the C4 test method approved by Australia, it is
impossible to detect rice syrup and beet syrup, which is why Capilano repeatedly
emphasizes that all its products are in compliance with Australian standards. In the
case of Capilano's supply chain, one way suppliers from overseas can pass
rudimentary checks is illustrated below (Olmsted, L. 2017):

Capilano also claimed that Australian and international regulatory agencies "will not
use this detection technology at all." Nuclear magnetic resonance (Nuclear Magnetic
Resonance, NMR) technology is a kind of spectroscopy technology based on nuclear
magnetism. It is a fast, non-destructive, and non-invasive new detection method. It
requires a small amount of sample. In recent years, it has been used in the field of
food science. It is widely used. Gudrun Beckh, CEO of the German laboratory QSI,
said that in her 30 years of research on honey, she believes that nuclear magnetic
resonance is the best choice for testing impurities. At the same time, Phillip McCabe,
president of the International Beekeepers Association, also stated that NMR is the
most accurate detection technology currently available, which is why he submitted the
results to Interpol.

What is even more troubling is that honey imported from China has been found to
contain the strong antibiotic chloramphenicol, which can cause possibly deadly bone
marrow disorders (McCurdy, P.R. 1961). In this “fake honey” incident in Australia,
according to Australian media, the honey that went wrong has one characteristic, that
is, they are unscrupulous “profiteers” who import from China. What is even more
troubling is that honey imported from China has been found to contain the strong
antibiotic chloramphenicol, which can cause possibly deadly bone marrow disorders
(McCurdy, P.R. 1961).Because according to the nuclear magnetic resonance
screening, the origin and plant source of honey can be determined, and in the test, the
honey impurities that go wrong are all honey from China, not from Australia.
Although the Australian Government's tests need to be changed, the responsibility
rests with Capilano, as seen in the supply chain diagram above, to prove they are
constantly implementing quality measures which not only satisfy regulatory criteria,
but also their social obligation (Carroll, A.B. 1991). The corporation has a Honey
Supply & Industry (HIS) Committee Charter provided on their website (Appendix A)
for the intention of informing the Boards on issues concerning to supply of honey and
the industry in general [5], hence, we recognize that was an issue of social
responsibility and not really ignorance.

Although the Australian Government's tests need to be changed, the responsibility

rests with Capilano, as seen in the supply chain diagram above, to prove they are
constantly implementing quality measures which not only satisfy regulatory criteria,
but also their social obligation (Carroll, A.B. 1991). The corporation has a Honey
Supply & Industry (HIS) Committee Charter provided on their website (Appendix A)
for the intention of informing the Boards on issues concerning to supply of honey and
the industry in general [5], hence, we recognize that was an issue of social
responsibility and not really ignorance.

The committee's focus does not provide quality management as one of their duties,
but the following is specified in their organizational culture and priorities (Appendix
B):

• to acknowledge, strive for, and promote higher ethical principles

• to meet customer and market demands for product quality, protection, and creativity

It is fair to conclude that the HIS Committee's priorities and the company's corporate
objectives seem to be at variance.

One of the less obvious economic impacts of companies like Capilano sourcing
ingredients from overseas is the impact on the local beekeeping community.

The effect on the beekeeping culture in the local area is one of the less evident
economic consequences of corporations like Capilano importing products from other
countries. The most significant distinguishing considerations for honey customers
were brand, source of products, and cost (Batt, P.J. 2012). Since Capilano sources
inexpensive honey replacements, the retail and wholesale prices they purchase and
sell could be significantly lower, giving them an unfair edge over rivals. Due to the
extreme low costs, approximately half of honey buyers from Australia [7] have
chosen their honey over rivals such as Beechworth Honey, which sources all of its
products from local [8]. We can conclude from this that the profits gained by
corporations like Capilano is used to increase the market for adulterated honey rather
than being reinvested in beekeepers from Australia. The fact that the number of
Australian beehives dropped by 25% between 2005 and 2015 [9] demonstrates this.
Capilano's supply chain faces three major threats as a result of this.

1. If any federal laws require additional testing or limits on imported honey, a

large amount of Capilano's supply chain would be disrupted.
2. Dependent on foreign imports reduces the opportunity for domestic
beekeepers to work. As a result, obtaining local honey is becoming more
difficult and costly, as fewer producers continue to function and promote open
creativity through information development, collaboration, and manufacturing
efficiencies. (H.W. Chesbrough, 2007)
 3. The reputation and value chain have been tainted, resulting in Capilano goods
being pulled from store shelves. In reality, major supermarkets such as Coles,
Aldi, and Woolworths are now doing so as a safety precaution.

Using other additives into their honey and naming it as Australian Made can be
considered dishonest from the perspective of a social responsibility, which can have
an effect on their branding and value chain.

Keeping with the concept of sustainability and social responsibility, it's important to
consider the effect of fake honey on bee populations in future as well as ethical honey
farming. Due to the widespread use of low-cost honey substitutes, there may be less
usage of natural honey, resulting in dwindling bee populations. Since most of us are
aware, bees are important pollinators, with 67 percent of all flowering plants relying
on them for reproduction (Tepedino, V.J. 1979).

5.Analysis

5.1 Flexible systems (Huming Shen)

In addition to Capilano's failure to meet the standards in the quality and safety control
of honey raw materials, its supply chain is facing a problem that does not have enough
capacity to deal with supply chain interruptions. Although it is not in compliance with
the law, Capilano's mixed honey products do fit with the official Australian honey
test. From the perspective of company operations, Capilano should consider the risk
of supply chain disruption due to product quality issues. This requires a flexible
supply chain to support.

Stevenson & Spring (2007) proposed that in the modern supply chain management
system, managers should turn their attention from flexible factories to flexible supply
chains. Sun (2003, cited in Manders et al., 2017) also stands for a similar opinion: the
flexibility of the supply chain should have the highest priority on the agenda of every
leader. The flexibility of the supply chain was first proposed by Slack in 1987. He
defined the basic concept of a flexible supply chain, that is, the ability to respond to
customer needs. With the continuous deepening research in the field of supply chain
management, flexible supply chain has also been given more definitions. Nowadays, a
flexible supply chain not only represents the ability to respond to customer needs, but
also includes the ability to maintain the stability of the supply chain (Kim & Rogers,
2005).

The concept of flexible supply chain supply chain has become more and more
important. Manders et al. (2017) & Simatupang et al. (2005) all mentioned in their
researches that the demand for a flexible supply chain comes from:
1. In order to maintain competitiveness, nowadays companies only retain their core
businesses and outsource non-core businesses. This further improves the supply chain
complexity and requires a flexible supply chain.

2. With the development of information technology, the company's ability to receive

and process information has been greatly improved, which promotes the company's
demand to make flash adjustments to the supply chain based on the acquired
information, which requires a flexible supply chain.

3. Other unexpected circumstances such as politics, natural disasters, transportation,

company business changes, etc. caused the supply chain interruption, which makes
the company consider both cost and change when constructing the supply chain.

4. The changes in customer demand and the pursuit of product diversification will
make the company consider flexibility in first priority when integrating the supply
chain.

A flexible supply chain does not require changes all over the supply chain, but the
transformation from specific parts, specialization, and flexibility.

Based on the problems Capilano is facing now, they should conduct flexible supply
chain construction from two perspectives:

1. Develop supplier substitution plans

2. Increase product diversity

Generally speaking, whether to maximize profits or the purchaser’s inertia, companies

often maintain long-term cooperation with a single supplier when purchasing the
same kind of products. However, due to information asymmetry, the single supplier
system will bring great instability to the supply chain (Wagner & Friedl, 2007). After
the supply chain interruption, the cost of restoring the interrupted part is much higher
than the cost saved by the single-supplier strategy. After the 2011 Japan earthquake
and tsunami, the supply of Japanese vehicle parts was interrupted, which had a huge
impact on the global auto industry. A supply chain disruption impact report for Ford
also pointed out that supplier disruption in key locations will have a great impact on
company profits (Simchi-Levi et al., 2015, cited in Hosseini et al., 2019). In order to
reduce the risk of supply chain disruption caused by information asymmetry, Capilano
should develop a supplier replacement plan. This plan can not only improve the
stability of the supply chain, but also create a competitive effect between suppliers
and reduce procurement costs. For example, Apple has a very mature supplier
selection system. According to Apple's "Supplier Annual Report'' (2020), Apple has
more than 800 supplier partners, but 200 of them provide more than 97% of products
and services. This system provides a great stability guarantee for Apple's supply
chain. Even in the case of China's industry shutdown policy due to the COVID-19
outbreak in early 2020, Apple's new generation of smartphones will only be launched
a few months later. In addition, Wagner & Friedl(2007) also pointed out that the
supplier substitution strategy is not a complete substitution, and partial substitution
can stimulate the competitive effect between suppliers. Adding new suppliers is the
best choice for buyers. For Capilano, when using syrup in its honey products,
Capilano should consider the risks of the testing standards changing and develop a
plan for alternative suppliers. Capilano can maintain close contact with suppliers who
provide authentic honey while purchasing syrup, so that the integrity of the supply
chain can be maintained after the honey testing standards are changed. At the same
time, Capilano can allow multiple honey suppliers to compete, and through partial
procurement, the form of competitive bidding can reduce procurement costs while
improving product quality and the stability of the supply chain.

Figure 1 Impact of supplier disruption on Ford's profits (Simchi-Levi et al.,

2015, cited in Hosseini et al., 2019).

In addition, Capilano can increase the flexibility of the supply chain by expanding its
product diversity. Capilano can provide 100% pure honey products, while continuing
to provide low-cost mixed honey mixed with syrup, and by expanding the product
range to attract more customers to buy its products. Through a preliminary
comparison (see Table 1), in the Australian market, Capilano does not provide many
types of honey products. There are only 7 products, including 3 categories (Flavored,
prue & luxury).
 Product name $/100g Features Average market price ($/100g)

Choc Honey 1.63 Flavored 0.86-1.63

Classic Honey 1.72 Pure honey 1.20-2.04

Proudly Local 1.94

Honey

Floral Honey 2.03

Low GI Honey 2.40 Healthy 2.00-2.80

honey

Organic Honey 2.65

Manuka Honey 2.65 luxury >2.65

Table 1 Australian honey market comparison

Source from: Woolworths Online Shopping

Through price comparison, Capilano's pricing of the product in the Australian honey
market is at a mid-range level. Whether to expand potential customers or increase the
flexibility of the supply chain, Capilano should provide more differentiated products.
For example, according to official Australian statistics (Figure 2), the total number of
babies born in Australia each year has been maintained at around 300,000 per year in
the past ten years.

Figure 2 Number of births and total fertility rate in Australia , 1920–2017

Source from: Australia Government

At the same time, the Australian honey market does not have honey products
specifically designed for infants/children. Capilano can provide baby/child honey.
According to the 2017-18 Annual Report of the Australian Bureau of Statistics
(ABS), it is estimated that 1.2 million people (1 in 20 people) will have diabetes in
2018, and Capilano can study the honey provided to diabetic patients. In addition,
Capilano can also attract customers by offering customized products. Tran et al.
(2012) proposes that providing niche products can increase user stickiness and expand
user scale at the same time. For example, Lego’s success comes from offering
thousands of different products and having a large number of loyal customers all over
the world. In the food field, M&M'S has extensive experience in niche marketing.
According to the research of Fekri et. al. (2019), M&M'S has gathered a large number
of loyal customers around the world by establishing mascots, making animations,
games, and opening M&M'S stores. By customizing exclusive M&M'S chocolate
beans, M&M'S stores can attract a large number of customers every year. Capilano
can also attract potential customers to buy its products in the form of privately
customized honey, so as to stand out in the Australian honey market.

5.2 multiple sourcing （Liu Xiaoxiang）

5.2.1 Introduction

Capilano is one of the biggest honey producers in Australia that is facing the proper
decline in its customer satisfaction level due to the ongoing quality issues with the
honey product catered by the company. In a report, ABC (2018) reflects that the
company has been accused of providing fake honey within an inspection regime
where 50% of honey product delivered to customers was declared adulterated. This in
turn adversely impacts the brand identity of Capilano thereby resulting in the
imminent decline in its customer satisfaction level. The revenue collection of
Capilano decreased from $133.6 million in 2016 to $133.1 million in 2017 due to a
decline in customer satisfaction level (Capilano, 2018). This section of the report aims
at recommending the incorporation of the concept of multiple sourcing for countering
the imminent quality issues prevalent within the company. For this purpose, it
discusses the concept of multiple sourcing, advantages, and disadvantages catered by
multiple sourcing for effective quality management.

Figure 1: Decline revenue of Capilano Source: (Capilano, 2018)

5.2.2 Multiple Sourcing 

Multiple sourcing refers to the method under which certain business operations of a
company are outsourced to a third party. According to a study by Cox & Chicksand
(2005), it is observed that multiple sourcing is the approach under which operations of
the company are completed by an external party that has the proper specialisation for
the particular operation. Correspondingly, Capilano can use the concept of multiple
sourcing for eliminating the quality issue from its supply chain through effective
quality management. Therefore, multiple sourcing referred to the method of
outsourcing business operations that could be used by Capilano for enhancing the
quality of its products.

5.2.3 Advantages of Multiple Sourcing 

1 Increases competency
The concept of multiple sourcing will help Capilano for enhancing the quality of its
products by increasing the imminent competition among its suppliers. According to a
study by Minner (2003), it is observed that multiple sourcing leads to the suitable
improvement of business operations of suppliers to acquire competitive advantage
over each other. This in turn leads to the acquiring of proper quality of raw materials
from the suppliers that further helps in the proper quality enhancement of the parent
company's final product or service. Correspondingly, the incorporation of the multiple
sourcing concept within the business operations of Capilano will increase the
imminent competition between its different suppliers such as. Further, this will help in
acquiring proper quality raw materials and services from the suppliers that ultimately
will help Capilano to counter the imminent quality issue. In a report, Statista (2021)
reflects that using the concept of multiple sourcing helped Walmart to increase its
sales revenue from $308.95 billion in 2006 to $555.23 billion in 2021 due to the
proper enhancement of its product quality as shown in Figure 2 below. Thus, the
concept of multiple sourcing would help Capilano in increasing the quality of its
products by increasing the competition among its raw material and service suppliers.

Figure 2: Revenue Rise of Walmart Source: (Statista, 2021)

2 Increases Flexibility 

Capilano can also benefit by incorporating the strategy of multiple sourcing in terms
of quality enhancement due to effective flexibility within the decision-making
process. In a study Ho, et al. (2010) suggests that the strategy of multiple sourcing
helps the companies in evaluating the effectiveness of suppliers in terms of product
quality. Correspondingly, the effective evaluation of product quality helps in inducing
the factor of proper flexibility for the selection of suitable suppliers. The use of
multiple sourcing strategies will help Capilano in assessing the quality of raw
materials delivered by its suppliers. Consequently, this will help in increasing the
company's flexibility and will help in increasing the quality of honey through the
selection of suitable suppliers triggered by an effective decision-making process. In a
report, ABC (2019) reflects that the incorporation of the strategy of multiple sourcing
helped Coles in increasing its profit by 14% in 2019 due to the proper enhancement of
its product quality triggered by the selection of a suitable supplier. Henceforth, the
strategy of multiple sourcing would also benefit Capilano in increasing the quality of
its products due to greater flexibility and an effective decision-making process for the
selection of suitable suppliers.

5.2.4 Disadvantages of Multiple Sourcing 

1 High Cost 

The strategy of multiple sourcing will help Capilano in improving the product quality
it will add to the overhead cost for the company. According to a study by Emiliani
(2000), it is observed that multiple sourcing leads to a company's capability to
negotiate for lower prices while acquiring suitable raw materials and services from the
suppliers. Correspondingly, the strategy of multiple sourcing will impair Capilano’s
ability to negotiate the price with its suppliers that will ultimately lead to the
enhancement of the company's business operations. However, the rise in overhead
costs due to the incorporation of multiple sourcing strategies can be countered through
the use of an effective cost management approach. The approach will help Capilano in
eliminating the indirect costs such as transportation cost, labour cost, etc. that will
ultimately help in neutralising the overhead cost triggered by the use of multiple
sourcing strategies. Therefore, a rise in overhead cost was one significant
disadvantage associated with the use of multiple sourcing strategy used by Capilano
that could be eliminated through effective cost management techniques.

2 Loss of Product Control

Another significant advantage associated with the use of multiple sourcing strategy by
Capilano is the loss of proper control over its products. According to a study by
Wilhelm, et al. (2016) it is observed that the multiple sourcing leads to the sharing of
confidential data between the parent company and its suppliers. The sharing of
confidential data often leads to access to a company's private files and documents by a
third-party organisation. Correspondingly, the access of confidential files triggered by
multiple sourcing strategies will lead to loss of control over its products. However, the
company can eliminate the chances of loss of control over its products by
incorporating the method of the supplier management plan. In a study, Primo &
Amundson (2002) suggests that a supplier management plan helps in developing
proper communication between the suppliers and company through the effectiveness
of suppliers' involvement and responsibility. Correspondingly, the supplier
management plan will help Capilano in reducing the imminent dissatisfaction of its
suppliers through proper communication. This in turn will eliminate the chances of
loss of the company's confidential data to a third party thereby ensuring proper control
over its products. Henceforth, loss of control over product was another disadvantage
associated with the use of multiple sourcing strategy by Capilano that could be
eliminated by incorporating the concept of the supplier management plan.

5.2.5 Conclusion 

This section of the report aimed at recommending the incorporation of the concept of
multiple sourcing for countering the imminent quality issues prevalent within the
company. For this purpose, it discussed the concept of multiple sourcing, advantages,
and disadvantages catered by multiple sourcing for effective quality management. It
was observed that the multiple sourcing strategy would help Capilano in increasing
the quality of its products by increasing competition among the suppliers and
flexibility in selecting suitable suppliers through an effective decision-making
process. Moreover, it was observed that use of multiple sourcing strategy used by
Capilano suffered the disadvantage of high overhead cost and loss of control over
products that could be countered through effective cost management technique and
supplier management plan respectively.  

6.Conclusion

Capilano, one of the largest honey producers in Australia, has been found guilty of
using fake honey in the market after being identified by a German professional body
due to persistent quality problems with its honey products. However, Capilano has
responded that its products meet local Australian product quality standards. The
company is facing the problem of declining customer satisfaction. After our analysis,
the company not only has product quality problems, but also has potential problems in
its industrial chain. First of all, the price of the company's products in Australia is
medium price, and the product categories are relatively few, only pure honey type.
Based on our analysis, we suggest that the company could increase the types of honey
sales, including low-priced honey with mixed syrups while retaining the pure honey
type, as well as honey targeted at specific populations, such as diabetics, infants, etc.
To prevent discrepancies in the composition of products tested, we recommend that
the company use an internationally recognized set of indicators, strictly control the
quality of its products, and make its testing methods and results available to the
public. A global recall and retesting of the honey involved. If a large number of
products do not meet the standard, the products will be removed from the shelves and
reproduced and customers will be compensated according to the standard. If a few
products do not meet the standard, the products can continue to be sold publicly.
Secondly, there are potential risks in the supply chain of the company. The supplier
selected by the company at the present stage is too single to cope with the supply
chain disruption caused by emergencies. Therefore, we suggest multiple procurement.
We advise the company to choose multiple suppliers. On the one hand, due to the
pressure of product competition, this can effectively improve the quality of suppliers'
products. On the other hand, it can effectively prevent the supply chain from dealing
with the impact of unexpected events, or even the problem of supplier supply
interruption. Although the recommendation of multiple procurement can effectively
improve product quality and reduce the risk of enterprise supply chain. But it also
increases the cost of doing business. Multiple sourcing helps firms negotiate lower
prices while allowing them to select more suitable raw materials and services from
more suppliers. Accordingly, diversified procurement will eventually lead to the
enhancement of the company's business operations, which can offset the increase in
overhead costs due to the simultaneous adoption of multiple procurement strategies
through the use of effective cost management methods. This approach will help
Capilano reduce overhead costs, such as transportation costs, labor costs, etc., which
will ultimately help offset the overhead costs associated with using multiple
procurement strategies. The most important point is that a flexible supply chain does
not necessarily require changing the entire existing supply chain, it only requires
making it more specialized and flexible in specific areas. With the rapid development
of today's science and technology, enterprises will be faced with greater data
integration and exchange, so a flexible supply chain is needed to dynamically adjust
according to the information obtained.

Reference list (Huming Shen、Liu Xiaoxiang)

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ABC, 2019. Coles supermarket sales growth slows as Little Shop boost tails off.
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Institute for Australia Government, Web site: www.aihw.gov.au/reports/australias-
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australia

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