Introduction of Network distribution at Kellogg Company

        The company Kellogg’s came into being in 1900’s in US. The company is one of the leading food selling companies. Their food items contain breakfast items as well as snacks. The company has several followers and customers from all over the world. The company still follows the strategy of improved diet and improved health. Kellogg’s sell cereals and other breakfast items not only in US but everywhere around the globe. The manufacturing units are present in Asia, Canada, Australia, UK and USA. Sales are increase when location of market is distributed this is the reason why Kellogg’s have manufacturing units in 19 countries. According to a report submitted by Kellogg’s in 2015, sales increase when system is geographically expanded which clarifies the reason of worldwide distribution, several units of manufacture and launch of first café by Kellogg’s in Sydney (Huang, Mak and Maropoulos 2009).

        There are six designs that have been used by the multinational companies for the distribution network. The first design is that manufacturer storage with direct shipping, this means that when the product is manufacture and then this product is shipped direct to the customers. In this distribution there is no involvement of any retailer or distributor. This can be done through the help of websites and other applications. The Kellogg Company is focusing on the distribution network that is the retail storage with customer pickup (Chopr and Meindl 2015).

        Secondary sectors include regions where products are manufactured, raw material is supplied and then products are packaged and then exported to everywhere around the world. Third sector is mainly the business sector; it is used by secondary sectors to benefit the business process. Kellogg’s is involved in food business, and comes under the heading of secondary sector and tertiary sector. They assure best quality product making and distribution, it is important for business to store products carefully and perform effective distribution (Myerson 2015).

        K-special and nutria grain bars are most common treats among young girls and women. Kellogg’s have kept itself up to date by joining social media, having contest, use of coupons etc. in order to increase the sale and demand. Having partnership with business experts increases the business, customer and environment in order to achieve goal of specialization by expanding supply and making it cost effective and accessible. (Wordpress.com 2018)

Current evaluation of distribution of Kellogg’s company

        For the distribution network the Kellogg’s company is using the retail storage with customer pickup. There are some benefits why this company is using this distribution network. Through the use of this network the efficiency increased and the next benefit is that response improved in a better way (Myerson 2015).

Retail storage with customer pickup of Kellogg’s company

        In this distributor network the company stored their inventory in the retail stores and then after this the customers walked into their retailer stores or maybe they placed their orders through the use of phones or websites. And then these orders are picked up at the retailer stores. This strategy of distribution network is best suited for the fast moving items like the foot items and also for the items for which the customers value rapid response.

        For using this distribution network there are some factors that affect the cost factor. In the first the inventory cost is higher than the other options used for the distribution network. Through the use of this method the transportation cost is decreased than the other designs for the distribution network. The cost for handling the product is higher than the other options and because its cost is depends upon the handing cost at the pickup point. The next cost factor for this design is used for the services. The cost of response time is lower than the other designs because of this the company’s efficiency increased. The variety of the product is lower than the other deigns for the distribution network. The cost and time for reaching the product to the market is extremely higher than the other designs for the distribution (Hammond 2012).

        Now we will discussed why Kellogg’s company is using retail storage with the customer pickup. They use this design for the distribution network because they want to improve the efficiency of their products and also they want to response to their customers quite efficiently. Through the use of this distribution design the Kellogg Company easily able to improve their efficiency of the supply to the customers. The efficiency can be increased through the use of this design that the consumers or customers of Kellogg company can able to communicate and provide information to the manufacturer of this company. Also the retailers can also able to provide the demand of their products to the manufacturer of the company (Otto, Schoppengerd and Shariatmadari 2009) (Watson, et al. 2012).

Reference  of Network distribution at Kellogg Company

Wordpress.com. (2018). Distributional Channelling By Kellogg’s. Retrieved from https://mpk732t12016clusterb.wordpress.com/2016/05/16/distributional-channelling-by-kelloggs/

Chopr, Sunil, and Peter Meindl. 2015. Supply Chain Management: Strategy, Planning, and Operation. Pearson Education.

Hammond, Richard. 2012. Smart Retail: Practical Winning Ideas and Strategies from the Most Successful Retailers in the World. FT Press.

Huang, George Q., K.L. Mak, and Paul G. Maropoulos. 2009. Proceedings of the 6th CIRP-Sponsored International Conference on Digital Enterprise Technology. Springer Science & Business Media.

Myerson, Paul A. 2015. Supply Chain and Logistics Management Made Easy: Methods and Applications for Planning, Operations, Integration, Control and Improvement, and Network Design. FT Press.

Otto, Andreas, Franz Josef Schoppengerd, and Ramin Shariatmadari. 2009. Direct Store Delivery: Concepts, Applications and Instruments. Springer Science & Business Media.

Watson, Michael, Sara Lewis, Peter Cacioppi, and Jay Jayaraman. 2012. Supply Chain Network Design: Applying Optimization and Analytics to the Global Supply Chain. FT Press,.

Wordpress.com. 2018. Distributional Channelling By Kellogg’s. https://mpk732t12016clusterb.wordpress.com/2016/05/16/distributional-channelling-by-kelloggs/.