Question

Assigned Company:

The Kellogg Company (Kellogg's) is an American multinational food-manufacturing company headquartered in Battle Creek, Michigan, United States. Kellogg's produces cereal and convenience foods and markets its products under several well-known brand names including Corn Flakes, Keebler, and Cheez-It.

1.

a) Describe the recall situation in this example. (2 points)

b) Who are the stakeholders involved and what are their objectives? (3 points)

c) How was the information communicated to stakeholders? (2 points)

d) Could Kellogg’s have communicated the information to other stakeholders

more effectively? (3 points)

2.

a) Where were the contaminated cereal products produced? (2 points)

b) Where were they shipped? (2 points)

c) What are Kellogg’s shipping terms of sale? (2 points)

d) In what order sizes (e.g. conveyance) might the contaminated products have

been shipped to customers? (2 points)

e) If an Incoterm was used for any customer locations, what might it have been

and why? (2 points)

3.

a) Describe how Kellogg’s’ procurement team could have mitigated the risks

associated with outsourcing production to a contract manufacturer in this

situation. (3 points)

b) Describe the ethical risks associated with contract manufacturing in this

situation. (3 points)

c) Based on the strategic importance of contract manufacturing, which Supplier

Interaction Model best describes the relationship that exists between Kellogg’s

and Kerry Inc. What should it be? Why? (4 points)

4.

Identify and explain the Processing Stages that Kellogg’s might have followed in

conducting the recall. (10 points)

5.

Kellogg’s use this recall as an example in conducting a self-assessment of its

ability to transition to a circular economy model. After completing the

assessment, they ask you to take a lead on this transformation project. (10

points)

 List the project objectives

 List the main activities

 List the project milestones, such as required progress reports or the completion of major tasks

6.

a) Which mode of transport, conveyance, and equipment would Kellogg’s likely

have used to ship products to the countries involved in the recall of “Honey

Smacks” cereal? (5 points)

b) What legal considerations would Kellogg’s have to be aware of when selecting

carriers for domestic and international shipments of products involved in this

recall? (5 points)

7.

Consider the following scenario: Kellogg’s distribution of cereal products to

customers in Guatemala is coordinated through Crowley Maritime Corporation, a

U.S.-owned and operated third-party logistics company (3PL) with a distribution

centre in Guatemala City, Guatemala.

Orders for the Latin America region were consolidated, and aggregate orders

were placed with Kerry Inc. in Gridley, Il. Kerry Inc. shipped consolidated orders,

palletized and labelled by distributor, by intermodal to Mexico City, at which point

trailers with orders for distributors in countries south of Mexico were moved over

the road.

Crowley’s general manager in Guatemala City advised Kellogg’s head office

personnel in Battle Creek, Michigan that they had identified approximately 140

pallets of salmonella-contaminated cereal products still in wholesale inventory in

Guatemala.

Unfortunately, despite FDA recommendations for disposal, government officials

in Guatemala, upon learning of the recall through their government Facebook

account, had contacted Crowley and insisted that no contaminated food products

be disposed of in Guatemala. Furthermore, since the contaminated products had

been shipped from the United States, Guatemalan authorities insisted that the

contaminated products be returned to the U.S. for disposal.

Kellogg’s Supply Chain Manager had already spoken with their freight forwarder

and customs broker regarding arrangements to return the contaminated products

to the U.S. Mexican authorities would not allow the contaminated products to

transit through Mexico, which left marine transport as the only economically

viable option to ship the contaminated products from Guatemala to the U.S.

Kellogg’s customs broker had placed a call to US Customs and Border Protection

(CBP) for advice since the returning goods would be labelled “CONTAMINATED

– Not for Resale – Goods returned for disposal only”. Since the returning

shipment would not be subjected to the same level of scrutiny as a commercial

shipment, CBP expressed concerns that someone might target the shipment for

smuggling or terrorism reasons. As a result, CBP stated they would only allow

the shipment to enter the US if the origin port was compliant with the

International Ship and Port Facility Security Code (ISPS) and the Container

Security Initiative (CSI).

a)

Describe the possible intermodal transportation of Kellogg’s “Honey Smacks”

cereal from Kerry Inc. in Gridley, Il to food distributors in Guatemala.

For example:

i) What intermodal carrier(s) might be available to Kerry Inc. in Gridley, Il.

offering service to Mexico and Guatemala? (2 points)

ii) Assuming the intermodal shipment travelled by rail from Gridley to

Mexico City, describe the route and possible carriers involved. (1 point)

iii) Describe the highway route from Mexico City to Guatemala City. (1 point)

iv) Where would the shipment encounter Guatemalan Customs when it

left Mexico and entered Guatemala? (1 point)

b) Describe the cargo security issues surrounding the return shipment from

Guatemala to New York.

For example:

i) Which Port in Latin America is the most likely origin Port in this

scenario (i.e. that meets the cargo security requirements of CBP)? (2 points)

ii) Describe the journey (route and equipment) from Guatemala City to

the Port in Latin America. (3 points)

iii) Describe the journey (route and possible ocean carriers) from the

Port in Latin America to New York, and on-forwarding to Gridley, Il.

(5 points).

8.

Identify and describe the relevant cargo security programs that are involved in

the reverse logistics scenario described in question 7.

For example:

2

Supply Chain Management

SCMT-1280-001 Final Exam Project

i)

In which security programs would membership likely benefit Crowley,

Kellogg’s USA, and Kerry Inc.? Why? (5 points)

ii)

What would the Harmonized Code, and rate of duty, be when returning these

goods to the US? Provide the appropriate reference. (5 points)

Answer 1

1.
a) The recall situation was difficult as the brand had to recall all of its products across the country because of the issues found in the product.
b) The various stakeholders involved were: employees (production people, operations people, logistics, etc.), employers (Board of directors, CEO, manager of the brand and unit at default), share holders (who had the bought shares of the brand) and consumers who had been eating the product.
c) The stakeholders got to know about the entire scenario when it went public in the country and the news channels had pointed fingers to Kellogg's for their bad product delivery.
d) Yes, the stakeholders could have been communicated in advance about the incident that had happened and they could have asked the ways in which the situation could have been kept in control. PR campaigns could have been decided in advance.

2.
a) The contaminated product was produced in the US.
b) They had been shipped across the country to various stores like Walmart, Amazon stores, etc.
c) The shipping terms are that Kellogg's will have the entire right to refuse, reject or accept any shipment at any point of time. ALl the details about the products should be sent in advance.
d) The order sizes would have been different depending upon the size of the box chosen. There are high chances of the material to be present in any box.
e) FOB can be the incoterm used stating the port of shipment so that the products can be traced back.

According to the guidelines of Chegg and shortage of time. I can answer only few parts