Company Overview Fonterra - Free Essay Example

COMPANY OVERVIEW: FONTERRA YEAR OF ESTABLISHMENT: Fonterra group was formed in year 2001 No. of years in Business: It has been 14 years since Fonterra is in Dairy business. Relevant Industry: Fonterra has become a house hold name in dairy. It has spread its wings in many nations like Australia, United States, China etc. Fonterra has many sub brands like Anchor Milk, Farm Gate Milk, Tip Top, Anchor Cheese, Anlene etc. Head Office: Fonterra is working internationally with its head office based in New Zealand Address: Una Place, Takanini, New Zealand. Basic Activities of Company: Exports: Products: Milk, Cheese, Butter and Ice Cream. Countries: United States, China, Australia, Malaysia, Middle East, Africa, Countries of European Union to name few. Activities: Sourcing, production, Manufacturing, Marketing. Company Mission: Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s mission is to be natural supplier of dairy nutrition for everyone around the globe, every day. Objectives: To make Fonterra well-known brand world-wide. Being the natural source of dairy nutrition for everybody, everywhere, every day. Develop strong customer partnerships with leading companies in the food and nutrition industries to become their supplier of choice. Policy: Following is explained the Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s Policy for its commitment to achieve its objectives: Commitment: It is Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s policy to design, develop, implement and maintain a Business Management System that: Overseeing Fonterra, including its control, accountability, decision-making and compliance procedures. Ensuring that Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s goals are clearly established, and that strategies are in place for achieving them (such strategies being expected to originate from management). Establishing policies for strengthening the performance of Fonterra, including by ensuring that management is proactively seeking to build the businesses of Fonterra through innovation, initiative, technology, new product development, and the development of Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s business capital. Establishing performance criteria for Fonterra and monitoring the performance of the Chief Executive Officer and management against these. Appointing the CEO, setting the terms of the CEOà ¢Ã¢â€š ¬Ã¢â€ž ¢s employment arrangements and, where necessary, terminating the CEOà ¢Ã¢â€š ¬Ã¢â€ž ¢s appointment. Adopting appropriate procedures to oversee compliance with all applicable laws, regulations, codes and accounting standards. Establishing Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s risk profile and ensuring that Fonterra has appropriate risk management and regulatory compliance policies in place and that these are monitored on a regular basis, including in relation to health and safety obligations and food safety and quality obligations and objectives. Approving Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s strategy, business plans and policies. Approving and monitoring the progress of major capital expenditure, capital management, and major acquisitions and divestments. The prime management system is always committed towards developing, implementing companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s policies and reviewing them regularly for assumed results. Determining the payment to be made for milk supplied by farmer shareholders. Ensuring that adequate plans and procedures are in place for succession planning in relation to the Board and the CEO. Overseeing progress towards meeting the objectives described in the introduction, including through appropriate engagement with senior managers across Fonterra, and in particular with those managers responsible for championing imperatives around food safety and quality. Assurance and improvements: Fonterra is continuing reviewing its policies and working practices. It involves its shareholders in review meetings and other business related processes to ensure its Management system remains appropriate and fruitful towards its activities, products, services and business related risks. Communication: Fonterra always communicate its policy to its employees at all levels to make sure they work towards same goal and contribute accordingly. The policy is periodically reviewed by companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s management team to check its effectiveness and to make sure employees are working in right direction and in effective way. Business Management System: Purpose and Scope: At Fonterra, purpose of Business Management System is to support its employees in their business related activities so that their interactions are consistent and effective and their work is always fruitful and generate sustainable profit for company while following a nd obeying all current laws and regulations. Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s documented and tested step-by-stepmethodaimed at smooth functioning throughstandardpractices. Fonterraà ¢Ã¢â€š ¬Ã¢â€ž ¢s management system aims on topicssuch as Organizinganenterprise, Setting and implementingcorporate policies, Establishingaccounting, Monitoring, Quality controlprocedures, Choosing andtrainingemployees, Choosingsuppliersand gettingbest valuefrom them, Marketinganddistribution. Compliance is a legal act which cannot be ignored at any cost. Financial Compliance: Compliance issues related to financial management of sale and or purchase, most critically, most stringent illegal monetary movements. Relying on handful of employees say 2 or 3 employees for legal compliance matters, isnà ¢Ã¢â€š ¬Ã¢â€ž ¢t enough. It has to pervade across the organization. Compliance is something which is beyond company administration and is vital for Import/ Export. Not following this can lead to desaturase results which can lead to following: Fonterra can miss deadlines for delivery, which will cause company unexpected costs which will eat its profits. It can also cause Fonterra losing its customers which will hinder its trustworthiness. As per contract signed with its distributors, it can lead to penalties also. Fonterra has set following set of rules for its employees to overcome Money Laundering, Bribery and Client entertainment, Information Security and Data Protection, Trade Finance L/C situation: Directors must act honestly and in good faith in what the Director believes to be the best interests of Fonterra. Directors must carry out their duties in a lawful manner and use reasonable endeavours to ensure that Fonterra carries out its business in accordance with applicable laws and with a high standard of commercial integrity. Directors must act in accordance with their fiduciary duties and exercise any powers for proper purposes. They should comply with the spirit as well as the letter of the law mindful that in addition to purely legal requirements the proper discharge of their duties as directors requires high ethical and moral standards of behaviour. Directors must avoid conflicts of interest wherever possible, and where these do arise, declare and manage them in accordance with legal requirements and the intent and content of this Charter. If a known conflict exists, the Chairman will take all reasonable steps to avoid any relevant papers being circulated to the affected Director prior to any Board discussion taking place. The affected Director should excuse themselves from discussion and should not vote on matters in which they have an interest. Directors will not take for themselves any opportunity discovered through the use of Fonterra property, information or position, or use Fonterra property, information or position for personal gain. Directors will not accept gifts or personal benefits of any value from external parties if that could be perceived as compromising or influencing any decision by the Director or Fonterra. (g) Directors will only trade in Fonterra securities (including Co-operative Shares and Fonterra Shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ Fund Units) in accordance with the Securities Trading Policy. Directors will maintain and protect the confidentiality of information of or held by Fonterra, except where disclosure is allowed of required by law or a relevant regulatory body or the information is otherwise in the public domain. The qualifications and skills of employees include: unquestioned honesty and integrity; a proven track record of creating value for shareholders; time available to undertake the responsibilities; an ability to apply strategic thought to matters in issue; a preparedness to question, challenge and critique; the ability and knowledge to comprehend the wider commercial and economic framework in which Fonterra operates; and a willingness to understand and commit to the highest standards of governance for Fonterra. Custom Compliance: Along with financial compliance, Custom Compliance is equally is equally important and should must not be neglected. It is a technical area which can be worked at with proper training and accurate paperwork and legal advice. Process and Function interactions: Organization Structure: The structure of an organization is based on the business process and functions it carries out and structure identifiers like different terms and departments involved, authorities and international business related activities. Following is an example of organizational structure: Every organization has an Export Compliance Officer in Export Department. Export Compliance Officer is authorised for all compliance related jobs. His responsibilities includes: Signing and authorising license applications. Maintain trade compliance policies and operational procedures. Maintain other procedural changes that apply to export compliance. Prepare complex licenses and agreements to support programs. To supervise and provide development opportunities to the export and import compliance staff. Criminal and Civil liability, Penalties for violating laws and for non-compliance. Standard Operating Procedures: Pro-forma Invoice/ Quotation: It is originated by Sales and Marketing department. Identify the who the customer is, what his product is and which country he is from. Pricing to be worked out which can include freight charges, local transportation, miscellaneous charges, arrival cost or duty etc. To get approval from head of department of Marketing and Finance and Export Compliance Officer. Confirming and matching quotations with agreement. Contract: Started by Sales/ Marketing Team Suggests the terms, contract has been agreed at. Most importantly it includes clauses like payment clause, credit, dispute settlement, terms of trade, description of products etc. Approval from Marketing, Finance and Legal Head, Export Compliance officer. Supplier selection and control: Originated by Supply Department. Supplier is usually selected while keeping factors like, ability to comply with Export/ Import Laws and Regulations. Financial stability of supplier, their reputation, feedback from other companies etc. Export Compliance Officer, Finance head, Supply chain and Legal etc. are involved while selecting a supplier of raw materials. After selection, Supplier is continuously examined to make sure his reliability and performance. Review of Supplier is done each year to track its performance and to consider amount of business to be sourced through him. Purchase order processing Procedure: Purchase Order Processing Procedure can easily be understood with help of following image: When purchase requisition is made, Dept. manager approves the order. It is then approved and signed by Plant Manager. Further Purchase Order form is filled and its copy is mails/ couriered or faxed to supplier to confirm order. Firm record the Purchase order no. After receiving the delivery, receipt of product is matched with PO and on matching, it is sent to accounts department. Procurement of the Order: After order is received, Electronic or Written communication with customer is done, sending him details of order known as Acknowledgement of Order. Afterwards, the sales manager verifies the order and matches it with quote in terms of price, quantity, product no., description, delivery, credit, trade terms, documents, payment terms etc. Order Documents are generated and information of order is entered in Order Processing Form. Plant manage r reviews the order and schedule production meetings. Order is sent to production department. Quality check is carried out while and after production and results are documented for each batch. After production, order is shipped to customer and the details of order received are sent to billing department. Once the order is received by customer, payments received from customer are sent to accounts department for processing. Once the order is complete, all documents related are placed in order files under customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s name, which can be Sales Order, Acknowledgement of Order, Customer order Form, Work Order etc. Documentation and record keeping: Business Management System documents are controlled and kept safe to make sure they describe product, process, responsibility, reliability of records. Management system follows an approved process which is maintained in a documented procedure. List of current version is maintained and their distribution is controlled. Correct versions of documents are available at the locations where they are needed. All controlled documents are approved for release by designated authority responsible for the process. Distribution system is designed to ensure that personnel are aware of relevant documents. Regular training is implemented to ensure that access to the Controlled Technical Data is limited to only those individuals approved to access this data. The Business Management System records are maintained to provide evidence of conformity to requirements and to demonstrate the effective operation of the BMS. Records are made available to review by customer, regulatory authority in accordance with the contract or regulatory requirements. Any records containing confidential data are limited to those individuals approved to access the data. Training: Training sessions aims all employees of company. Almost each employee is given an overview about company and its international business while at time of joining. Organizations has to make sure that person involved in the job is trained for his individual duties. Employees are often monitored by their supervisors to determine their capability to carry out their respective job and responsibilities. Each employeeà ¢Ã¢â€š ¬Ã¢â€ž ¢s training and capability level is recorded and reviewed at regular intervals. Audits: Audits are done at regular intervals to make sure the sturdiness of various departments of an organization to meet 100% compliance. Area Frequency Type of Audit Frequency Type of Audit Marketing Quarterly Internal Yearly External Finance Monthly Internal Yearly External Purchase Monthly Internal Yearly External Training Half Yearly Internal Yearly External References Export Compliance Jobs: Compliance Crossing. (n.d.). Retrieved from Compliance Crossing Web Site: https://www.compliancecrossing.com/job-description/4485/Export-Compliance-Jobs/# Ltd, F. C. (31-Aug-2012). New Zealand Productivity Commission: Local Government Regulatory Performance Issues Paper July 2012 . Fonterra Group. Auckland. Management System: Business Dictionary. (2015). Retrieved from Business Dictionary Web Site: https://www.businessdictionary.com/definition/management-system.html