Evaluation and failure diagnostics of distribution network in a dairy supply chain (Case study: milk distribution company)

Subject Areas : Industrial Management

Mohammad Amin Khoei ¹ (School of Industrial Eng., College of Engineering, University of Tehran, Iran)
Amin Jamili ² (Faculty member of Tehran University)

Received: 2021-05-13 Accepted : 2022-04-10 Published : 2022-05-26

Keywords: Distribution network, FMCG, Troubleshooting, milk distribution network,

Abstract :

In today's competitive market, many experts believe that competition has shifted from the level of companies to the competition between their supply chains. Supply chain efficiency depends on several factors. The success of a distribution chain often depends on how the members of the chain perform their tasks in order to achieve common goals. Distributors, as one of the main members and connection between the manufacturer and customers, play a key role in the supply chain management. Besides, they are particular in collecting marketing information, reducing demand uncertainty, and improving customer satisfaction. In the dairy industry, for various reason such as the existence of various sensitivities, including rapid and high corruption rates, the role of supplier is more critical. Therefore, the purpose of this study is to evaluate and diagnose the milk distribution network of the dairy industry. In this regard, first using the SCOR model approach at three levels, the milk distribution network is evaluated. Then, the evaluation indicators of the distribution network and the complications of the study distribution network were identified. The most important complication identified in the milk distribution network was the distribution of milk close to their expiration date. In the next step, the causes of milk distribution network complications were identified and categorized, the most important of which, according to the AHP method, is the lack of a proper distribution network monitoring system and human errors in information transmission.

References:

1. Ayyagari Venkata Ramani. (2018). Supply Chain Distribution Network Analysis of Two Cable Manufacturers. Proceedings of the International Conference on Industrial Engineering and Operations Management. Pretoria, Johannesburg, South Africa, October 29 – November 1.


2. Ehsanpour, K., Sadeghi, T., Sedaghat, R. (2013). Evaluating the Present Situation and Suggesting Appropriate Strategies forImproving the Efficiency of Pistachio Distribution Channels of Kerman Province Using SWOT Model. Journal of Nuts, 04(03,04), 15-23. doi: 10.22034/jon.2013.515702


3. Ghazi Moghaddam, H., Nasehi Far, V., Dehdashti Shahrokh, Z., & Taghavifard, S. M. T. (2020). Developing an integrated distribution channel model for fast moving consumer goods manufacturing and importing companies in Iran. International Journal of Industrial Engineering and Management Science, 7(1), 1-19.


4. Hahlani, C. D., & Garwi, J. (2014). Operational challenges to smallholder dairy farming: the case of mayfield dairy settlement scheme in chipinge district of Zimbabwe. IOSR Journal of Humanities and Social Science, 19(1), 87-94.


5. Hatami, K., & Heydari, S. A. (2021). A Mcdm Approach For Evaluation And Selection Of Distribution Channels In FMCG Industry. Kaveh Hatami, Bahram Kheiri and Seyed Abbas Heydari, A MCDM Approach for Evaluation and Selection of Distribution Channels in FMCG Industry, International Journal of Management, 11(12), 2020.


6. Kabiesz, P., & Kuboń, M. (2019). Evaluation of distribution channels in a selected meat processing company. Zeszyty Naukowe. Organizacja i Zarządzanie/Politechnika Śląska.


7. Knuutila, M., Puttonen, V., & Smythe, T. (2007). The effect of distribution channels on mutual fund flows. Journal of Financial Services Marketing, 12(1), 88-96.


8. Rajgopal, J. (2016). Supply Chains: Distribution, Warehousing Transportation. Pittsburgh: Department of Industrial Engineering University of Pittsburgh.


9. Reddy, V. R., Singh, S. K., & Anbumozhi, V. (2016). Food supply chain disruption due to natural disasters: Entities, risks, and strategies for resilience. ERIA Discussion Paper, 18.


10. Suryagayathri, C. K., & Krishnan, J. S. (2018). A Study on the Evolution of Distribution channels of Telecom Industry in India. International Journal of Pure and Applied Mathematics, 119(16), 1393-1401.


11. Taleghani, Mohammad; Asgari, Mohammad Hadi; Madbar Nia, Yasman; Ebrahimi, Abdul Hamid. (1985). Industrial Marketing Concepts – Applications. Rasht: Islamic Azad University Publications, Rasht Branch.


12. Trihatmoko, R. A., & Mulyani, R. (2018). Distribution strategy for new product marketing success: fast moving consumer goods (FMCG) business. Management and Human Resource Research Journal, 7(12), 19-32.


13. Van der Valk, O. M. C., & Tessema, A. (2010). The formal dairy chain of Addis Ababa; An analysis of the integration of small-scale farmers. LEI Wageningen UR.


14. Wårell, L. (2014). Trends and developments in long-term steel demand–The intensity-of-use hypothesis revisited. Resources Policy, 39, 134-143.


15. Wąsowska, A., & Włodarczyk, R. (2019). Evaluation of Traditional and Modern Distribution Channels in Tourist Market. Zeszyty Naukowe Politechniki Częstochowskiej. Zarządzanie, (33), 332-344.


16. Yang, Y., Bidkhori, H., & Rajgopal, J. (2021). Optimizing vaccine distribution networks in low and middle-income countries. Omega, 99, 102197.


17. Yu, M., & Nagurney, A. (2013). Competitive food supply chain networks with application to fresh produce. European Journal of Operational Research, 224(2), 273-282


18. Yumurtaci, I., Börühan, G., & Ersoy, P. (2016). Marketing channel strategy and the effect of cannibalization on retailing: A conceptual overview from marketing and supply chain perspective. Yönetim ve Ekonomi Araştırmaları Dergisi, 14(2), 41-63.


19. Zimon, D. (2017). Quality Management Systems' impact on the functioning of distribution channels in the FMCG market. Calitatea, 18(156), 52.


20. Zou, Z., Tseng, T. L. B., Sohn, H., Song, G., & Gutierrez, R. (2011). A rough set based approach to distributor selection in supply chain management. Expert Systems with Applications, 38(1), 106-115.