Cardinal Foods: Sweet Sourcing

9 Pages Posted: 16 Jan 2018 Last revised: 15 Dec 2018

See all articles by Jenny Mead

Jenny Mead

University of Virginia - Darden School of Business

Bidhan L. Parmar

University of Virginia - Darden School of Business

Elliott N. Weiss

University of Virginia - Darden School of Business

Abstract

As part of a biennial supplier review, Jennifer Schramm, a purchasing manager in the cocoa and chocolate division at Cardinal Foods, had been considering several different cocoa cooperatives. She wanted to (1) source high-quality cocoa in the proper particle sizes, (2) source cocoa from environmentally and socially conscious producers, (3) keep the cost of cocoa sourcing as low as possible, and (4) not increase any reputational risks to the company. Information and data from three cooperatives is given to assist in making a recommendation. From an operations perspective, the purpose of the case is to teach the dual concepts of capability and natural variability. The case can be used as a lead-in to the concept of statistical process control. From an ethical sourcing perspective, the case addresses the complexities involved in making a principled decision in a global supply chain.

Excerpt

UVA-OM-1591

Rev. Dec. 6, 2018

Cardinal Foods: Sweet Sourcing

Jennifer Schramm was a purchasing manager in the cocoa and chocolate division at Cardinal Foods (Cardinal), a multinational agribusiness giant based in Chicago, Illinois. She had earned her BS in food science from North Dakota State University in Fargo, North Dakota, and had progressed from a summer intern as a flavor-lab technician to food safety scientist to the head of South American cocoa purchasing at Cardinal over her 10 years with the company. Although Cardinal sourced cocoa from three areas (Asia, Africa, and South America), Schramm's team handled the South American sourcing from Ecuador. As part of a biennial supplier review, Schramm had been considering several different cocoa cooperatives. For the last eight years, Cardinal had used the Dulce collective, which had started in 1990 with 50 families and had grown to 850. Several other Ecuadoran collectives had appeared on the radar and Schramm needed to assess the advantages of staying with Dulce or going with a different supplier. In addition, Schramm's customers, large consumer product goods companies like Hershey and General Mills, had become increasingly interested in avoiding environmental and social risks in the ingredients they sourced from Cardinal. The worldwide demand for cocoa bean products had increased tremendously (in part because of the rise of the middle class in China), as had, simultaneously, public demands for sustainable cocoa bean farming and harvesting. Schramm needed to take these factors into account while at the same time maintaining quality at a competitive cost.

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Keywords: process capability, process behavior charts, statistical process control, SPC, supply chain management, strategic sourcing, sustainable supply chains, business ethics, stakeholder management

Suggested Citation

Mead, Jenny and Parmar, Bidhan L. and Weiss, Elliott N., Cardinal Foods: Sweet Sourcing. Darden Case No. UVA-OM-1591. Available at SSRN: https://ssrn.com/abstract=3101120

Jenny Mead

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Bidhan L. Parmar (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Elliott N. Weiss

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=4375

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