CHAPTER 2: CONCEPTUAL FRAMEWORK OF SUPPLY

CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT STRATEGY: -

Suppliers are reliable business partners who help any endeavor succeed. Any third-
party vendor, product or service provider, consultant, and/or contractor who
provide products and services is included. Sysco is worldwide famous corporation
because it does delivery of food and nonfood items in more than 90+ countries.
According to the articles, publications and other information sources,

SCM STRATEGY:- Sysco has number of suppliers in different arenas of the

worlds. As Sysco's principal mission is to raise and maintain the industry's
highest quality and freshness standards. In addition, they promise that their
product is farmed, packed, processed, and sent straight from the source.

Sysco's major partners, according to the company, are devoted to local farming
efforts and loyal to their clients. Sysco is committed to maintaining the cold chain
of product from the point of origin to our clients. Keeping the cold chain in place
ensures that Sysco clients obtain the best shelf life, yield, and scent from their
produce.

Overall in supply chain management strategies, Sysco collect their products from
the local suppliers for examples vegetables, Milk or milk products and so on from
the local farmers after checking product’s standards and their shelf life etc. Sysco
directly sent that products to the distributers through trucks and other modes of
transportation.

The majority of Sysco's goods are delivered frozen. However, when items arrive at
Sysco distribution centers, they are normally transported to an appropriate cooler
zone that often maintains optimal temperatures compatible with a variety of food
products such as fruits and vegetables. It is preferable to maintain the cold chain
strong when Sysco transports fresh goods to their consumers. Corporation also use
multi-temp zone delivery trucks to maintained different temperatures zones

The following 2 pictures are showing multi temperature zone truck.

Figure 1

Figure 2
LEGAL, REGULATORY AND CONTRACTUAL
OBLIGATIONS-

The code of conduct at Sysco, as in all other organizations, is for all individuals,
including every single worker of the company/ stakeholder/ shareholder, division,
and all members of the Sysco Corporation's management board. However,
everyone involved in the organization is accountable for reading and adhering to
these principles. According to the future code of conduct of the organization, is not
any contract.
ORGANIZATION STANDARDS AND POLICIES

The legal, moral, and ethical norms of honesty, integrity, justice, and equality are
of the utmost significance to the company. According to the code of conduct, if a
person works for Sysco, he or she must operate responsibly and with honesty and
integrity. In addition, people should respect local governmental laws, rules and
regulations, company policies, and the code of ethics, since it includes compliance
with the laws of all nations wherever Sysco conducts its business.

It is crucial to respect and protect fundamental human rights.

WORKPLACE SAFETY:

It is critical for any firm to ensure workplace health and safety, as well as the
health and safety of the whole community. Each individual is responsible for
defending himself as well as others.

 Responsibilities are like

 Keep an eye out for any hazards to health and safety, and be familiar with
emergency procedures.
 Follow Sysco's safety and workplace protocols, and also guide others about
it.
 If an accident, injury, or disease occurs, always come forward. Etc.

PRODUCT SAFETY AND QUALITY

It is critical to provide value to each and every consumer by ensuring the safety
and quality of the items.

Objectives could be like:

 Improve quality of product gradually in all the business.

 Assess new market opportunities.
 Improve the experience of doing business with Sysco
SOCIAL AND ENVIRONMENTAL RESPONSIBILITIES:

Social: As a publicly listed corporation, Sysco is also accountable for the

communication of accurate and up-to-date information to the general public and its
investors. All stakeholders must be given with accurate and timely information.
Sysco, according to the info supplied, has been involved in corporate social
responsibility efforts from its start. As company has developed, so it has strategic
approach to environmental, social, and governance issues.

Sysco dedicated to bringing about positive change in the organization, the

environment, and the communities that Sysco serves, which will ultimately
improve overall status of the company positively.

Environmental: Sysco's principles include that in order to maintain and preserve

the environment for future generations; management will encourage sustainable
agriculture methods, reduce our carbon footprint, and divert trash from landfill.
Sysco declared a science-based carbon reduction target in 2021. In relation to the
Paris Climate Agreement, this is dealing with two distinct emission reduction
targets. However, understanding the duty of a global leader in the organization is
equally vital. This also ensures to make sensible decisions.

Figure 3

Some other environmental responsibilities:

 Get rid of garbage and discharges properly.

 Do not engage in behaviors that have a negative impact on natural resources.
 Always understand the impacts of your actions before taking them.
  This is heavily important to keep garbage in a safe and secure location, and
make sure it is properly disposed of.
 Conservation of biodiversity is important.
 Avoid the use of non-biodegradable items.
 Do not discharge hazardous chemical in the natural water bodies.
 Use air filters.
 Obey environmental laws, rules and regulations. Etc.

PESTEL ANALYSIS- Industries employ a variety of tools for a number of

reasons, including as scheduling, data gathering, and data storage, among others.
However organizations, use a PESTEL analysis tool to study and monitor external
marketing environment elements. These elements can have an influence on an
organization.

If there is a change at Sysco, it affects not just the corporation but also those who
are directly or indirectly connected in the business.

Political Factors: Sysco run its business in more than 90 countries. As well as
Sysco face number of threats by itself against various forms of political
environmental conditions and political system.

There are some political factors that Sysco must analyze:

 Taxation
 Anti-trust laws related to Food and its sales
 Mandatory employee benefits
 Product labeling
 Risk of military invasion
 Protection of intellectual property, etc.

Economic Factors: similarly like political there are number of economic factors
also that influence corporations directly. For instance, inflation, interest rate,
saving, currency exchange rate. and many more.
Sysco Corporation should consider economic factors while conducting PESTEL
analysis are –

Countries' economic systems, Exchange rates, Economic growth rate,

Unemployment rate, Education level in the economy, Labor costs, Stability of host
country’s currency, Skill level of workforce and Productivity in the economy

Social Factors: It is undeniable that every arena or society has their own culture
and rituals. And this impacts the culture of an organization too.

The following are the social aspects that Sysco Corporation's leadership should
consider while doing a PESTEL analysis:

 Culture (gender roles, social conventions

 Attitudes (health, environmental consciousness)
 Class structure
 Skill level of the population
 The nature of society as a whole

Technological Factors: Technology is rapidly changing a wide range of sectors.

Identifying the following effects of technology is required for analysis:

 Impact on Food Cost Structure

 Technological diffusion rate
 The effect on the value chain structure in the services industry

Environmental Factors: Before going global or launching a new business in an

existing market, a company should carefully consider the environmental criteria
that are necessary to operate in those areas. These factors could be like:

 Weather conditions,
 Climate changes
 Global warming
 Environmental laws and rule/ regulations
 Air and water pollution regulations
CHAPTER 3: ANALYSIS AND EVALUATION OF SUPPLY
CHAIN TASK
INVENTORY MANAGEMENT STRATEGIES
As per the information provided, Sysco manages their inventory employing
Manhattan's IO system. In other words, Sysco manages working capital and
improves cash flow by adopting Manhattan's IO system. How these systems
actually work?

This technique assists finance managers and inventory analysts in balancing their
total budget or inventory investments. This system also aids in the management of
all client services, goals, and corporate successes. Furthermore, the targets system
relies on Manhattan's IO system to create targets by assessing the availability of
items and their correct places.

MANHATTAN’S IO SYSTEM SOFTWARE HAVE NUMBER OF

ADVANTAGES

 It helps to improve overall efficiency of the company

 Improves cash flow
 Balance total budget or inventory investments
 Manage client services, goals and corporation’s achievements
 Forecast accuracy improves
 Automatically reduces safety stock
 With the reduction of safety stock reduces, inventory investment lowers
without impacting fill rates.

Manhattan's IO system is an effective tool for determining the necessary level of

safety stock. According to Morgenstern, this program also improves working
capital.

APPLICATION OF SIX SIGMA, JUST IN TIME, KANBAN SYSTEM, AND

LEAN PRODUCTION

SIX SIGMA:
Six sigma is a wonderful approach for eliminating errors and improving the overall
efficiency of a company. As the most of systems face a very common issue called
as variations in the set processes, however, six sigma methodologies reduce this
error of variations by reducing defects in the system or processes. Reduction in
variation defaults ultimately increases the efficiency.

In Sysco company, six sigma method often use for quality control. Management of
Sysco Corporation says that six sigma methods is not only helps to control quality
checkup even though it also improves communication with customers, employees
and other shareholders.

The diagram illustrates different steps of lean 6 sigma

Applications of Six Sigma

 Reduce variations
 Measure defects
 Improve product quality
 Improve overall processes and services
 Ensure the delivery of product on right time and at right place.
 Least cost of product delivery to the customer

In addition to the business value-added framework, Six Sigma provides an

integrated framework. Not only does it assist in the creation of an integrated
framework and a business value-added framework, but it also assists in the creation
of a financial matrix to assess and analyses the effect of Six Sigma on SCM.

JUST IN TIME:

JIT stands for just in time. This is a type of transportation of commodities, items,
or materials to various areas for the purpose of production shortly before they are
required.

Applications of JIT in SCM are like:

 The very first application is that JIT technique reduce the wastage of
material
 Reduce the storage of unwanted or extra goods/ excessive level of material
 Helps to build or improve good relationships with suppliers.
 Material flow has been improved across the manufacturing system,
 Improve productivity
 Improve cost effectiveness
 Prevent over production
 Reducing wait times and transportation expenses
 Saving resources
 Continuous improvement reduces the need for extra stages, etc.

KANBAN SYSTEM:

Taiichi Ohno, an industrial engineer at Toyota, invented the use of Kanban.

Kanban is a widely used method for establishing multiple work schedules,
controlling workflow at the workplace, and enhancing the main services that lead
all aspects of the task. This is also known as the workflow management approach.

Kanban is a type of board that visually represents all processes/workflow/tasks on

a board. This visualized work is presented with optimum efficiency and better
work continuity. The Kanban board covers multiple tasks that must be completed
by various members of various teams. And it also represent effectively handle even
the most difficult tasks in a single environment
Kanban is also well-known for its inventory control system, which is used in just-
in-time (JIT) production to track output and request fresh shipments of components
and supplies.

Figure: Example of Kanban Board

Applications of Kanban:

 Improve efficiency
 Improve production
 Keep employees up to date about task
 Prevent work over capacity
 Manager get progress report easily and on the spot
 Need is determined by customer’s demands
 Lowe inventory levels and costs
 Manage the complete supply chain

LEAN PRODUCTION: