Palm Oil Demand and Supply: Navigating a Complicated Global Supply Chain - Essay Sample

Paper Type:  Essay
Pages:  7
Wordcount:  1777 Words
Date:  2023-04-05


In the recent past, the demand for palm has been on a significant steady rise owing to the perverseness of its products in modern society. Generally, the steady increase in its demand has mainly been influenced by global demands for cheap and readily available foodstuffs. These demands have seen palm oil establish itself as a substitute for biofuel ingredients, trans-fats, and animal byproducts. However, its supply chain remains one of the complicated on a global scale, considering the number of times the product change hands before reaching the factories. Below is a general overview of the said supply chain. Oil palm is grown in plantations from which agents and middle-men purchase the produce. The agents and middle-men then sell the produce to the millers who process the fruit bunches. Subsequently, through traders and middle-men, it is sold to refineries for further processing. From this point, the factories then purchase the product and process it into the final products before availing them in the markets.

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Critical Issues Within the Palm Oil Supply Chain

Although big-name food-product-companies have substituted much of their ingredients with palm oil products and there has been a significant focus on oil palm products by the international market, palm oil supply remains one the most flawed in the world. The problem starts with the farmers. Malaysia and Indonesia, the leading suppliers of palm oil worldwide, have over three million smallholder farmers. Generally, due to their small productions, factories and companies cannot reach these farmers. As such, they are left with no option other than to sell their produce to middle-men and agents. In other words, they cannot meet the demands of the larger downstream buyers like technical requirements or certifications. Markedly, they are also not in a position to meet the downstream players' policies on standards of production. On the same note, the downstream players, therefore, cannot in any way guarantee an ethical supply chain. Collectively, this has been widely linked to rampant adverse environmental practices, including deforestation and unmitigated emission of carbon dioxide. Mainly, the ethical practices are rampant because the end-users cannot trace what transpires in the supply chain nether can they hold anyone responsible. Another significant issue is the unwillingness of downstream players to play their part in enacting an ethical supply chain. Recent surveys have well documented Asia is the largest consumer of palm oil products. For the last there years, consumption of the palm oil products in China, India, and Indonesia amount to about forty percent of the global stocks. However, a survey of these countries far and near history purchasing patterns, shows that they have been interested in buying the product (palm oil) produced to third -party certified sustainable standards (Thangavelu and Yee 2017, pp.103-124). Lastly, relevant authorities have invested a lot of resources, including finances, to enact effective administration policies. As a result, the farmers have become more disempowered, thus threatening the sustainability of the supply.

Potential Areas for Development and Improvement Along the Supply Chain

First, small entities like farmers in the palm oil supply chain can be certified in order to increase their visibility and accountability. The main focus should be the creation of a traceable chain of custody in which all the activities involved in the supply chain can be monitored (Lambin et al., 2018, pp.109-116). Second, authorities enact policies that require every member of the supply chain to be certified and to be audited on a regular basis. Ideally, this will deny downstream players, that is, companies and factories, an option of purchasing palm oil products from non-certified farmers. In other words, they will not be able to establish an unethical supply chain. Predictably, this will result in accountability, and holistic practices in the larger supply chain as all members will be left no option other than to comply. Lastly, instead of investing heavily in the administration cost, relevant authorities should focus on empowering the farmers in order to establish a sustainable supply chain. Specifically, farmers should receive training and technical requirement at low or no cost. As a result, the certification process will become easy, and at the same time, accountability will be increased (Lambini et al., 2018, pp.109-116).

How Outsourced Logistics May Improve the Environmental Credentials of a Business

Undoubtedly, climate change is poised to have a significant impact on every aspect of life. In general, heating of the earth will affect weather patterns, destroy economies, cause mass extinctions, and ultimately leave humanity in a deplorable state. However, this is only set to happen if humanity does nothing to solve the underlying problems. If humanity considers and practices environmentally friendly practices, the climate storm will be weathered. Traditionally, the business world is regarded as the primary influencer of this change. However, sustainable and environmentally friendly logistics has made the same business world, one of the most influential bodies in climate change mitigation efforts. Precisely, apart from the business world enacting measures favorably to the environment, it has also influenced the rest of the world in doing the same. Ideally, it has sensitized the members of the community on the importance of environment conservation.

Following the recent global efforts on the conservation of the environment, which requires strict compliance, especially from the corporate world, businesses have taken a step further to ensure they stay ahead of environmental regulations. Among other strategies, outsourced environmental logistics has manifested itself as a great deal in the said compliance. Below is a description of how outsourced logistics may improve the environmental credentials of a business. Generally, environmental outsourcing means hiring a consultant and tasking him or her to asses and undertake a business environmental obligation. Primarily, these consultants will perform compliance issues assessment and devise a compliance strategy that most efficiently meets the regulatory objectives as required by the company's' permitting needs and due diligence (Gusmerotti et al., 2019). Typically, the assessment process starts with an audit or the application of a strategic planning tool, "gap analysis," that helps to determine the company's specific regulatory obligations as well as identifying areas that are yet to comply. Precisely, this audit entails thorough scrutiny of operations and manufacturing processes in a particular company, and a detailed assessment of its compliance with applicable laws. The evaluation considers local, state, and federal environmental laws as well as permit regulations and conditions (Khurshid, Park and Chan, 2019, pp.1572-1582). Usually, the findings of these audits identify the compliance tasks, reports, or a permit that needs to be addressed. Most importantly, the results of the audit ensure that compliance is efficiently done and on time. Remarkably, environmental outsourcing programs improve the company's environmental credentials in the following ways. First, they allow the company to increase efficiency, improve communications, and ensure deliverables are met promptly. Also, it ensures compliance assurance and submittal requirements are accomplished and in a timely fashion. Additionally, the findings ensure the company makes all the payments, and most importantly, on time as required by the compliance laws.

Benefits and Challenges Associated With Outsourcing Logistics Activity

The benefits of environmental outsourcing include the following. First, the involved company enjoys efficient and improved monitoring and compliance goals. Second, outsourcing eliminates the need for hiring new employees, thus saving the involved company cost of training and supervision. Third, an effective outsourcing program-that integrates environmental issues with market drivers and business priorities enhance the company's public image as well as business-to-business image. Fourth, environmental outsourcing is economical compared to full-time hiring. Fifth, it enables a company to reduce the risk of noncompliance through the establishment of productive relationships with relevant regulatory authorities. Also, the use of propriety software plays a significant role in ensuring there is compliance. Additionally, the activity is time and cost-effective compared to internal procedures. Lastly, compared to the company's domestic workforce, which in most does not have a relevant profession, a consultant is well-equipped to solve contemporary issues through rapid and cost-effective solutions since they invest a lot of time on the same they also have a pool of resources at their disposal (Schulz, 2018). However, environmental outsourcing has its challenges, which include the following. Licensing of the necessary proprietor software is usually subject to several legal reviews. Also, although consultants tied by a professional code, it is always a challenge to keep the company's production process a secret. Ideally, the company has to disclose all the production processes in order to ensure they are in compliance with available laws. Lastly, the procurement and hiring process is always a challenge since the hiring company has to consider cost and the efficiency of the prospective consultant.

The Restaurant and Some of Its Critical Issues That Need to Be Addressed

The restaurant to be considered in this study will be the Hilton Hotel and Resort. Currently, every major player in the hospitality sector has to deal with highly competitive markets, demanding customers, and the uncertainty of the world economies. Generally, in order to survive such competitive environments, the hospitality sector needs to run reliably and fast pace operations, which can adapt to the patterns of the fast-changing market and, at the same time, maintain a low cost of doing business (Akhtar, 2017). Below are some of the issues in the Hilton Hotel that, when addressed, could result in a reduction of business cost and, at the same time, improve their efficiency. First, the hotel needs to reduce the number of its employees. Second, the hotel needs to reduce the employees' movement in order to save time and other resources. Third, they should work towards the increment of their revenues. Lastly, they should consider improving customer services like online orders.

How Lean May Address Some Critical Issues in the Hotel

Regarding the reduction of the number of employees, the hotel should use Lean's tools of standardized work on the areas of interest. First, they can target the room attendants, and the application of the Lean tools should be as follows. Upon identifying the area of interest, the next step is defining the study. In this case, the research can be defined as a study of the room attendants' productivity and their effectiveness in relation to their daily workloads and how the same can be improved. Specifically, in this case, the hotel should conduct a detailed study on room attendant's daily workloads and the supportive values-chains. For instance, they can consider their work scheduling, room cleaning, guest amenities, assignment system, regular workflow, etc. After defining the study, the second step is measuring. In this stage, they should gather relevant data and analyze it later proceed to apply Lean tools accordingly. Cooks, waiters, and waitresses can also be targeted. They can employ the strategy described above (for the room attendants), and in the end, they will be abl...

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Palm Oil Demand and Supply: Navigating a Complicated Global Supply Chain - Essay Sample. (2023, Apr 05). Retrieved from

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