Critical Analysis of the Role of Purchasing and Supply Chain Management in Food and Beverage Operations in the U.K
Running Head: Critical Analysis of the role of purchasing and supply chain management in food and beverage operations in the U.K
Institutional Affiliation:
December 18th 2012
Introduction As the world’s sixth largest economy by purchasing power parity and nominal Gross Domestic Product, the U.K remains a great power with strong cultural, economic, scientific, military and political influence. In the wake of the recent recession, the U.K’s economy remains fragile. Additionally, there is a threat of renewed weakening of the economy as financial stimulus fades and pressures grow. U.K consumers for the time being seem to be playing it safe and this has been evident in the growing significance of private label products and fast rising sales in discount stores. For business in the food and beverage sector, since 2008, price of food and beverages soared driving the inflation of food price sharply upwards, impacting consumers and businesses alike. Factory gate prices escalated, the cost of drinks and food in foodservice outlets and stores followed suit, and people started to financially feel it. For several years, demand has outstripped supply driven by the increasing affluence in the developing world and global population growth. The removal of price intervention in the European Union also had a significant contribution to waning inventories of major commodities. The past few years have witnessed a tipping point; price of food commodities peaked and since then have been declining. In the food and beverage industry, consumers are becoming more demanding, competition is getting tougher, pressure on margin and process continues, and distribution as well as other input costs is on the rise. This paper will provide a critical analysis of the role of purchasing and supply chain management in food and beverage operations in the U.K while considering how this and a proactive approach to cost control can provide these businesses with a competitive
Institutional Affiliation:
December 18th 2012
Introduction As the world’s sixth largest economy by purchasing power parity and nominal Gross Domestic Product, the U.K remains a great power with strong cultural, economic, scientific, military and political influence. In the wake of the recent recession, the U.K’s economy remains fragile. Additionally, there is a threat of renewed weakening of the economy as financial stimulus fades and pressures grow. U.K consumers for the time being seem to be playing it safe and this has been evident in the growing significance of private label products and fast rising sales in discount stores. For business in the food and beverage sector, since 2008, price of food and beverages soared driving the inflation of food price sharply upwards, impacting consumers and businesses alike. Factory gate prices escalated, the cost of drinks and food in foodservice outlets and stores followed suit, and people started to financially feel it. For several years, demand has outstripped supply driven by the increasing affluence in the developing world and global population growth. The removal of price intervention in the European Union also had a significant contribution to waning inventories of major commodities. The past few years have witnessed a tipping point; price of food commodities peaked and since then have been declining. In the food and beverage industry, consumers are becoming more demanding, competition is getting tougher, pressure on margin and process continues, and distribution as well as other input costs is on the rise. This paper will provide a critical analysis of the role of purchasing and supply chain management in food and beverage operations in the U.K while considering how this and a proactive approach to cost control can provide these businesses with a competitive
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