The First Part of the Supply Chain for General Mills Inc.

There are many functioning parts within a business that manufactures consumer goods. Departments such as sales, finance, accounting and marketing are in the forefront of the minds of consumers and business professionals alike. However, there is an area of a business that sits at the helm of any successful manufacturer, and that is a well-managed supply chain. The supply chain is the coordination of activities within a manufacturing process beginning with the sourcing of raw materials and ending with a satisfied consumer. This article will focus on the first part of the supply chain for General Mills Inc., the sourcing of one of its most sought ingredients, raw cocoa.

Ethics in sourcing, the beginnings of a successful supply chain strategy starts with an organizational culture that promotes ethics from within. “From purchasing to selling and every facet of a business in between, if a strong ethical culture exists a company can better avoid conflicts of interest, lack of professional competence, improper reciprocal agreements between purchasers, and sellers and ethics within the supply chain” (Heizer 448). Many different factors are present in the sourcing of raw cocoa, and since General Mills does not buy directly from growers it is imperative that in-depth research of the production of their ingredients origins are of good ethical standards and practices. “Like many priority commodities around the world the production of cocoa is not always a pretty one, and in places like Africa (where 40% of the world’s cocoa trade originates) are equated to the trade of conflict diamonds, more commonly known as blood diamonds” (Riggs). General Mills has implemented what it calls the Supplier Code of Conduct, and they will not tolerate the use ...

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...This emphasizes the need to evaluate where suppliers are located as well as their environment.

Supplier evaluation, it is important that General Mills determine that “a potential supplier is or could be an International Cocoa Organization (ICCO) certified producer” (Anga). If the quality of suppliers is poor, the rest of the supply chain will suffer and efforts will be wasted. General Mills must then choose how the supplier will be integrated into its system, and the purchaser must make certain that the supplier has an appreciation of quality. “General Mills will benefit from a cost-based negotiations strategy, because it requires the supplier to show the purchaser its books. From there the purchaser will draft contracts that spell out the terms, boundaries and conditions of the relationship so that each party involved shares equal benefits and risks” (Heizer 443).