YAKULT

Supply Chain ManagementGROUP-11DefinitionSupply Chain Management (SCM) is the management of the flow of goods and services. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption

The Supply Chain

Reason for developing supply chainGreater competitive advantage Greater value to customersReduce the lead time gapFaster and smaller deliveries to intermediate customerIncrease in share holder value

IntroductionA Japanese company started in 1935 Dealing in Probiotic dairy productsSold across 31 countries Plant at Sonipat-Food parks with state of art infrastructureModern technology to cater food processing industryProximity to metro cities which offers good marketInternal capacity at Yakult is 10 million bottles.

SUPPLY CHAIN MANAGEMENT-YAKULTDemand planning

Estimate daily requirements: Major customer-Supermarkets, distributor's, warehouses. Forecasting-Time series modelDynamic Inventory Target- Due to seasonality pattern: Dynamic adjustment to Inventory and Safety stock (ABC Classification)Allocating stock in shortage situation- System consolidates the information at the plant level and totals the daily demand by adding these requirements , the corresponding supermarket chain and distributors.

Transportation Optimization

After determining the daily requirements and volumes to be assigned by warehouse location, Yokult translate them into a cost-effective delivery schedule by use of Transport Optimization module.Module includes: Integration of Load builder and Load scheduler based on dispatch table.Dispatch Table For each route and day, table identify which hour of day truck could leave source point and arrive destination, based on time window and lead time.

AboutTurned 65 in July 2010 globallyEntered India in 1993 as a JV with Ghai Group in MumbaiNow run in India and SAARC countries by Graviss FoodsGraviss Foods also runs Kwality and Richs ice creams in Indiagrowth against industry average of 12%Ice cream retail industry in India in 2009 Rs.16 bn. Organized sector took nearly 30 %. Amul is the market leader in the overall industrySpread of OutletsNear 6000 outlets globallyIn India in 2007 200 stores in 35 citiesNow 400 outlets in 95 citiesAdditionally 600 hotels & 600 modern format retail storesAnnounced upto 30% expansion this year (Upto Tier IV)Cannibalization is the objectiveManufactureManufacture of ice creams for the whole of South Asia in PuneMost vital ingredients imported; Chocolate and flavors are the major importsAll varieties manufactured in the plant itself.InitiativesThis presentation will deal with two initiatives taken by Baskin Robbins in the area of SCMOutsourcing distribution from factory to last mile to a cold chain logistics company nationwideBuilding IT infrastructure and MIS to aid in inventory planning and distribution Problems in DistributionCold chain logistics is central to the ice cream businessIt is not the core competency of BRThey tried their own logistics system but failedOutsourced DistributionSnowman Cold Chain logistics is the national supply chain partner for BRChallenges to be tackledPrebuilt product needed to be stored at the right temperature so that quality is maintained. Power fluctuations and lack of infrastructure are problemsLack of Temperature Controlled Warehouses on Pan India basisSeasonality of the demand for ice creamsSnowman LogisticsSnowman provides -25 C at its dedicated warehouses to store prebuilt blocksSuch long duration storage is done for the first time in India to offset demand during the seasonSnowman has 18 warehouses in India with requisite infrastructure BR Distribution diagram17Pune manufacturing plantW/H 1 W/H 2W/H 3 W/H 18 Regional outletsMilk run adopted through dedicated trucksDedicated temperature-controlledwarehousesTransport Bangalore exampleBangalore has 55 franchise outlets of BRSnowman implements milk-run system for distributing from warehouse to outlets10 trucks are used

IT InfrastructureBR integrated all its outlets with a single MIS infrastructureOne head office for dissemination, collection, compilation and analysis of all information5 Regional offices for co-ordination with franchiseesGives a point-of-sale solution to the customer at the front endAlso aids production planning, inventory planning, distribution and marketing

Benefits to BRHuge cost savings due to outsourced distribution and warehousingDistribution efficiency enabled rapid expansion across the countryOutsourcing also allows BR to focus on its core competency in product portfolio, taste and serviceMIS makes planning of production and inventory easier.

AboutPepsi was founded in 1898 by Caleb Bradham; druggist, who first formulated Pepsi-Cola.Brands such as Mountain Dew, Diet Pepsi, Gatorade, Tropicana Pure Premium, Aquafina water, Tropicana juice drinks, Slice and Tropicana Season's Best.

SUPPLY CHAIN MANAGEMENT-PEPSICoDifficulties without Just-in-Time

The demand or production planner strived to optimize production-oriented goals and equipment utilization, labour efficiency and uptime.Optimizing these goals often leads to run large batch sizes that are dependent on the availability of raw materials. The sourcing or purchasing managers strived towards reducing company's spending overall. They even got the shipping and freight costs included in the purchase price, which led to the increase in the price of the commodity.Purchasing managers focused on getting the best price.The logistics/transportation manager was tacked with getting raw materials in and the finished goods out of the production process and seek to optimize the transportation and distributing network.Improvement with using Just-In-Time (JIT)Delivering high cost and perishable products to manufacturing sites, just-in time (JIT) remains one of the most cost-effective supply chain solutions. PepsiCo's concentrates reaches bottlers as needed during the production had to reach them JIT, they partnered with 3PL to manage its transportation.Supply Chain VisibilityWith shorter lifecycles and lead times-to customers , Globalization and outsourcing have added to the complexity, resulting in more diversified supply chains. The number of supply chain partners, as well as the amount of geographic dispersion, has increased.To ensure that their order-to-delivery performance is not impacted, companies need to have greater coordination and visibility into the material flow across the supply chain.Extensive CapabilitiesInbound and outbound tracking.

Track multi-leg and multi-modal shipments

Visibility into exceptions.

Role-based views for buyers, suppliers, analysts, and 3PL vendors.

High degree of permissibility and privacy controls.

Track-and-trace inventory across multiple locations.

Configurable event detection mechanism and customizable event management workflows.

Integration to underlying applications for intelligent resolution and to prevent event recurrence.Packaging as a tool for Supply chain managementGS - standards (bar codes)RFID tags for real-time stock replenishmentsCommercial Security offeringsCounterfeit & pilferageOnline supply chain visibility across the chainPack safety for the consumer

Pepsi-Cola Saved $44 million by switching from corrugated to reusable plastic shipping containers for one litre and 20-ounce bottles, conserving 196million pounds of corrugated material.PepsiCo's Frito Lay Supply chainFrito-Lay is the snack food division of PepsiCo and the largest supplier of potato and corn chips in the world, currently holding 40% of the market share globally, and selling its products in 120 countries.

StrengthFrito-Lay is succeeding against a multitude of competitors in a fierce, yet slow-growth industry, selling approximately 4-5 billion packages of snacks per year.Supply chain in IndiaA typical marketing chain for horticultural produce consists of several players as shown.

PepsiCo is one of the pioneers of contract farming in India since 2001 Their experience in contract farming has covered many crops - potato, basmati rice, tomato, chili, peanut, oranges and more recently sea weed. PepsiCo's operations started in India started in the region of Punjab in collaboration with state government.Corporation and Punjab Agriculture University remains one of the most ambitious contracts farming projects in the country.

Supplier Base: Frito-Lay's supplier network for potato chip production has fewer than 100 individual suppliers.Strategy Used:Several years ago, Frito-Lay approached its potato suppliers to seek those who focus on producing the most appealing taste and quality.Frito-Lay then offered long-term contracts, which made it easier for the farmers to get financing and for Frito-Lay to achieve more efficient, profitable economies of scale in other areas of the value chain.It insure a stable supply of raw material, important to a company who purchases 2.3 billion pounds of potatoes and 775 million pounds of corn annually.

From supplier to retailerFrito-Lay traditionally relied upon its in-house fleet of trucks to transport products from its plants to its 1,900 warehouses or 200 distribution centers.However, as the company expanded, operations managers realized that it was not economical to produce every product at every plant, and thus began specializing at particular locations.

RetailersThe last stop involved is the 400,000 stores across the nation that carries Frito-Lay's snack food products.

The company utilizes their own technological systems to show stores how reallocating shelf space, for example, can produce larger profits.

Retailers are also provided with Frito-Lay's "Profit-Vision Program", which allows retailers to analyse their sales and compare it to national performance statistics.

At the same time, Frito-Lay benefits from the program because it convinces retailers to allocate more shelf-space to their products.

THANKYOU