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BTEC level 3 Unit 35 P5
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BTEC level 3 Unit 35 P5
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in this P5 I will be explaining the disadvantages of Heineken’s integrated supply chain. Eachdisadvantage I will explain with the use of examples, I will explain three disadvantages.
The first disadvantage of the integrated supply chain of Heineken is the chance of an external
unforeseen shock. What is meant with this is that certain things may happen without someone
expecting it to happen. The supply chain of Heineken can be vulnerable for a few unforeseen shocks,
they can be vulnerable because Heineken may not have a plan B when something happens. A few
external unforeseen shocks can be: natural disasters, terrorists incidents, increasing of fuel prices,
accidents, problems within the operations and an outbreak of an epidemic for example a disease. I
will explain three of these examples.
1. The first external unforeseen shock that I will explain is operational difficulties. When
something happens that effects the supply chain of Heineken like that an supplier of bottles
goes bankrupt. When this happens Heineken will be effected if they don’t have another
supplier on stand-by. If this will happen Heineken can’t make any beer because they don’t
have something to put the beer in.
2. The second external unforeseen shock that I will explain is outbreak of an epidemic. When
something like a disease breaks out worldwide Heineken probably won’t be able to sell any
beer, this because people will buy medicines and food (primary needs) and people won’t buy
beer (secondary needs). See Heineken’s sales will go down because there is a worldwide
disease.
3. The third external unforeseen shock that I will explain are natural disasters. When something
happens like an earthquake people will be in panic and a lot of properties will be destroyed.
This will just as with point two result in people wanting to first take care of their primary
needs and a house than buying beer. Factories of Heineken can also be destroyed, when this
happens Heineken will invest money in making a new factory.
The second disadvantage of the integrated supply chain of Heineken can be the difficulty of meeting
raised customers expectation for delivery reliability. Customers of Heineken and a lot of other
companies have expectations about service delivery that might serve as standards or as reference
points on what customers judge about how they think a company is doing. So knowing what a
customer wants is very important for a company and especially a big company like Heineken because
knowing what a customer wants can improve the product and the services that are provided to
customers. If you as a company don’t know what your customer wants you can lose these customers
because you don’t satisfy them. Being wrong about the customer needs can in the worst case result
in losing market share. Because the needs of a customer change all the time it’s hard for the supply
chain of Heineken to adapt on those needs. So when the customer changes it’s needs it first need to
be detected within the supply chain, the most likely participants to notice this change in needs are
the retailers, wholesalers of the manufacturers. When noticed these participants should send a signal
to the others to inform them about the changes. If the information flow within the supply chain of
Heineken isn’t good the needs of the customers can’t be met in time so Heineken than will have
unsatisfied customers.
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