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Running Head: FONTERRA: RISING UP TO SUSTAINABILITY CHALLENGE    1
FONTERRA: RISING UP TO SUSTAINABILITY CHALLENGE     15
NEW ZEALAND DIPLOMA IN BUSINESS (LEVEL 5) COURSE
OPERATIONS MANAGEMENT
COURSE: DBN 509
ASSESSMENT 1: PART A - INDIVIDUAL ASSIGNMENT
[CASE STUDY OF FONTERRA: RISING UP TO SUSTAINABILITY CHALLENGE]
Table of Contents
1. Introduction    3
History and Type of Ownership    3
Financials    3
Vision and Core Values    3
Prominent Brands    3
Key Markets    3
2. Sustainability Challenge    4
a) Five Driving Challenges Faced by Fonterra    4
b) Two Quality Management Systems Adopted by Fonterra    5
c) Four Ways Sustainability Initiatives will Enable Fonterra to Overcome Their Issues    6
3. Continuous Improvement    8
a) Five Initiatives Adopted by Fonterra for Continuous Improvement    8
b) Five Recommended Tools for Continuous Improvement    10
4. Conclusion    12
5. References    14
1. Introduction
History and Type of Ownership
Fonterra is a dairy co-operative established in October 2001 and headquartered in New Zealand. Fonterra provides its services worldwide and accounts for about 30% of the global export of dairy products. Fonterra is owned by about 10,500 farmer shareholders all based in New Zealand.
Financials
    As of 2017, the company has made revenue of NZ$19.2 billion. Fonterra envisions being a true global leader in the context of sustainable dairy nutrition.
Vision and Core Values
The company highly values sustainable farming and strives towards achieving the optimum levels of sustainability (Stevenson et al. 2016). It looks forward to producing dairy nutrition of highest-possible quality within a climate, which requires matching the New Zealander communities’ expectations.
Prominent Brands
The most prominent brands of Fonterra consist of Anmum, NZMP, Farm Source, Anchor and Anlene.
Key Markets
The company serves over 140 nations worldwide. Nevertheless, some of the key target markets of Fonterra include Australia, Brazil, Chile, China, Indonesia, Malaysia, Sri Lanka and of course, New Zealand.
This essay aims to identify the sustainability challenges faced by Fonterra and the initiatives taken by the co-operative to overcome the challenges. Additionally, this essay also addresses the various strategies adopted by Fonterra to achieve continuous improvement.
2. Sustainability Challenge
a) Five Driving Challenges Faced by Fonterra
    There are various things, which challenge the sustainability of the quality, as well as, the performance of food-driven products. The existence of these challenges necessitates the adoption of adequate and appropriate sustainability initiatives in order to improve overall business excellence. It is estimated that around the world, approximately 792 million people do not receive sufficient nourishment. It is evident that a significant amount of the population does not have access to proper nutritional diets.
It may be said that climate changes and other weather issues all around the world pose serious threats to the environment. Food production and agriculture are two of the most significant contributors to climate change and decreased biodiversity due to huge emissions, water and land utilisation among other characteristics (Delaney & Haworth, 2016). Therefore, it is required for food production systems to ensure addressing emissions and other environmental issues. Poor diet, as well as, the lifestyles that the modern people lead is leading causes of death.
It is, therefore, required of food producers to maintain quality management and sustainability in their production systems to ensure that their products are not harmful to human health and society. To meet to food demands of the worldwide population, agricultural sectors have intensified their operations, which have led to deteriorating water levels (Bartos, 2016). This poses a serious threat to overall environmental sustainability.
Additionally, despite the development of technological advances and innovations within the agricultural sector, the enhancement of global land productivity is declining, which is why it is important for food produces, now more than ever, to implement various approaches to sustainable production (Shyam & Smith, 2018). It may be said that if not addressed, these challenges have the potential to cause serious harm to the food production capability and quality of food items of food produces. All of these factors are reasons as to why Fonterra has adopted sustainability approaches to quality and performance.
b) Two Quality Management Systems Adopted by Fonterra
    Two quality management systems that have been adopted by Fonterra include ISO 26000 and ISO 14001. The ISO 26000 can be referred to as an international standard, which is designed in order to assist organisations in terms of appropriately evaluating and addressing responsibilities to society, which are significant and of relevance to their mission and vision, consumers, workers, functions and procedures, environmental influence and other stakeholders. The ISO 26000 standard provides definitions, as well as, information of paramount importance to firms in order to assist them in terms of understanding social responsibility and addressing the responsibilities (Balzarova & Castka, 2018).
Additionally, this standard puts more focus on the improvement of outcomes, as well as, performance in accordance with the social responsibilities of companies. The ISO 14001 certification specifies the necessities regarding effective EMS. In place of establishing requirements that can be followed by organisations in terms of enhancing environmental performance, this standard constitutes a framework in order to assist organisations to achieve that (Boiral, Guillaumie, Heras‐Saizarbitoria & Tayo Tene, 2018). This standard works extremely well and integrates excellently with a range of other management system standards including the ISO 9001, which provide significant assistance to firms in terms of accomplishing their goals and strategic objectives.
Although the achievement of ISO standards is immensely beneficial for businesses, a fair share of barriers can be faced by organisations while implementing the policies associated with the standards. The lack of knowledge pertaining to CSR among the managerial executives within companies poses a serious threat to achieving ISO 26000. It may also be stated that a majority of organisations emphasise on eliminating barriers and fulfilling short-term objectives. However, the ISO 26000 standard can only be achieved with the development of effective and long-term strategies.
Moreover, the lack of proper interaction among the different divisions of organisations, as well as, the lack of promotion of stakeholders can be significant barriers to the fulfilment of the ISO 26000 standard. The ISO 14001 standard, on the other hand, is subjected more to technical issues. For instance, in order to implement the policies...