THE SUPPLY CHAIN

Question 1
Fair Trade is a voluntary program utilized by coffee importers and food companies to
create an alternative market for traditionally disadvantaged producers in developing
countries, usually small scale farmers. The components include targeted purchasing of
coffee through democratically organized farmer co-operatives. As agreed upon
commodity floor prices that provide for a dignified livelihood and direct exports by
producers. There is a promise by importers to make affordable credit available to the
farmer cooperatives and a world-wide network of non-profit certifying organization.
There will be a fee paid by importers and wholesalers to cover the cost of certification
and a seal that assures consumers that the product was fairly traded. Your purchase of
fairly traded coffee helps build pride, independence and community empowerment for
small farmers and their families. (Alan and Richard, 2008)

While the benefits are strong, allowing farmers’ co-operatives to attain higher prices and
retains access to markets, drawbacks do exist. For example, the minimum price is only
guaranteed to the co-operative, and not the small-scale farmer, or their workers at the
end of the chain. Prices are fixed without adapting to country context, and costs are
often high for producer organisations to become Fair trade certified. And with coffee,
roasters can end up bearing the cost of marketing the Fair trade brand, through the
payment of a license fee to Fair trade Foundation as a percentage of sales.

While fair trade promotes 'protection' of farmers, direct trade offers 'aspiration'. The
fixed price a farmer receives from Fair trade will not be affected by the quality produced,
so farmers are not incentivised to take on the extra labour and input costs needed to
grow a better crop. Quality-centric direct trade, however, allows for bespoke pricing
agreements and collaboration in the field. A farmer that may be based in a region with
outstanding climatic and topographical attributes for producing coffee, could, through a
direct trading approach, become enabled to grow a greatly superior crop, and earn
more money as a result. (Hile & Gaseth, 2010)

1
An added benefit of working directly with farmers is the ability to spot the needs that
arise within a community that would improve farming practices, and subsequently the
quality of a crop.

Above all, buyer and producer work together long-term, to produce a high quality coffee,
and the farmer is paid a price linked to the quality of their crop. Just as no business
would brag it pays minimum wage so should any industry reliant on commodities be
striving to pay their producers in the developing world above minimum requirements, to
incentivise innovation, and improvements in quality. It can only result in a better wage
for the farmer and a better coffee for consumers at home. (Coopers, et la, 2009)

Question 2
Many producers do not sell products or services directly to consumers, instead of
marketing intermediaries to implement a variety of functions necessary for the product
to the end user. These intermediaries such as brokers (wholesalers, retailers, agents
and brokers), dealers or brokers and typically enter long-term commitments with the
product and do what is known as channel marketing, or distribution channel.
Manufacturers use raw materials for the production of final products materials, which in
turn can be sent directly to the retailer, or less commonly, to the consumer. However, as
a general rule, the flow of finished goods from manufacturer to a wholesaler or more
before reaching the retailer, and ultimately the consumer. Each party distribution
channels generally gaining legal possession of physical goods during transport, but this
is not always the case. For example, in the sale of goods, the product retains full legal
ownership even though the goods may be held by a wholesaler or retailer, that is, until
the goods reach the end user or consumer. (Alden, et al, 2006)

The role of intermediaries channel is a thing of intermediary between the provider and
the consumer. In today's economy, is channel intermediaries to play a more important
role once were. The main function of the broker channel is getting the goods from the
supplier to the consumer. Therefore, the UPS may be intermediaries channel because it
is the way many companies to get their products to people who buy them. However, the

2
role of mediator channel beyond. Amazon now functions as an intermediary channel in
many ways. And it provides sellers with the "interface" that to sell to customers. Collect
pay shipping and handling (maybe UPS) across. Thus, how important it has become a
channel for intermediaries in today's economy is demonstrated. Intermediary then is an
organization that helps somehow to get the goods from the supplier to the consumer.

The main benefit provided by intermediaries that are to help reduce the cost of
distribution by doing routine transactions. Foreign exchange can be standardized in
terms of lot size, frequency of delivery and payment, and communications. The seller
and the buyer no longer have to negotiate on every transaction. Transactions have also
become more common, are associated with these transactions to reduce costs. Use of
intermediaries also help buyers and sellers searches. The producers seek to identify the
needs of their customers, while customers are looking for particular products and
services. There is a degree of uncertainty in all of the searches can be reduced by using
the distribution channels. (Alan and Richard, 2008)

Question 3
This section is the analysis of Al Ahli Food Products Company where the supply chain
consists of all the stages involved, directly or indirectly, to meet customer demand. The
supply chain of the National and includes not only manufacturers and suppliers, but also
transport, warehouses, retailers, and customers themselves. The supply chain is
dynamic and involves the constant flow of information, production and funding between
stages. Each stage of the supply chain performs various operations and interact with
other stages of the supply chain.

Program: The first stage of the supply chain in the civil known as the management plan.
Has been the development of a plan or strategy to address how to meet a good or
service because customer needs. Much of the strategy focuses on planning profitable
supply chain. This is a strategic part of the SMC. Al Ahli has a strategy for the
management of all resources that will meet customer demand for the product or service.
A large piece of SMC in the National Plan for the development of a set of indicators to

3
monitor the supply chain to be effective, and costs less and provides high quality and
value to customers.

Development: development is the next phase in the private management of the supply
chain. It is about building a strong relationship with suppliers of raw materials needed to
manufacture the product delivery civilians. This phase involves not only identifying
reliable suppliers, but also plan ways to shipping, delivery and payment. Al Ahli chooses
suppliers to provide goods and services you need to create their products. Thus,
managers of the supply chain to develop a set of processes pricing, delivery and
payment with suppliers and create indicators to monitor and improve relationships.
Therefore, the combined SMC operations managers to manage their inventories of
goods and services, including the receipt and verification of cargo, and transported to
the manufacturing facilities and authorizing supplier payments.

Make: In the third phase, and make the product is manufactured, tested, packaged, and
scheduled for delivery in private. This is the manufacturing step. Managers supply chain
to schedule necessary for the production, testing, packaging and preparation for
delivery. This metric is the densest part of the supply chain - one where companies are
able to measure the quality and production, production and productivity levels of
workers.

Presentation: Then at the stage of logistics, and customer orders received, we plan to
deliver the goods. This is the fourth stage of the management phase of the supply chain
called skillfully provide. This is the part that many experts refer to the SCM and
Logistics, the National Coordination of receiving orders from customers, and develop a
network of warehouses, choosing companies to get products to customers and creating
a system invoice for payment.

Return: call the final stage of the supply chain within the civil administration to return. As
its name suggests, at this stage and customers return defective products. Al Ahli also
handles customer questions at this stage. This is part of the problem of supply chain for

4
my family. Al Ahli Planners supply chain creates a responsive and flexible for defective
products in excess of its customers and support customers who have problems with
delivered products.

References
 Alan, R., and Richard, H., (2008). International Business: A Strategic
Management Approach (2nd or 3rd ed), Prentice-Hall/Pearson.
 Alden, D., Steenkamp, B., Batra, R., (2006). Brand Positioning Through
Advertising in Asia, North India, and Europe: The Role of Global Consumer
Culture. Journal of Marketing, 63(1), 75-87.
 Coopers, A., & Lybrand, P., and ECR Europe. (2009). European Value Chain
Analysis, Final Report, Utrecht
 Hile, C. & Gaseth, J. (2010), “Strategic Management an integrated” approach;
Houghton muffin and co.