Supply Chain

Management
GROUP-11

Definition
Supply 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 chain

Greater competitive advantage
Greater value to customers
Reduce the lead time gap
Faster and smaller deliveries to intermediate customer
Increase in share holder value

Introduction
A Japanese company started in 1935
Dealing in Probiotic dairy products
Sold across 31 countries
Plant at Sonipat1. Food parks with state of art infrastructure
2. Modern technology to cater food processing industry
3. Proximity to metro cities which offers good market

Internal capacity at Yakult is 10 million bottles.

SUPPLY CHAIN MANAGEMENT-YAKULT

1.

Demand planning

.Estimate daily requirements: Major customer-Supermarkets,

distributor's, warehouses.
.Forecasting-Time series model
.Dynamic 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.

2. 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.

About

Turned 65 in July 2010 globally

Entered India in 1993 as a JV with Ghai Group in Mumbai
Now run in India and SAARC countries by Graviss Foods
Graviss Foods also runs Kwality and Richs ice creams in
India
growth 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 industry

Spread of Outlets
Near 6000 outlets globally
In India in 2007 200 stores in 35 cities
Now 400 outlets in 95 cities
Additionally 600 hotels & 600 modern format retail
stores
Announced upto 30% expansion this year (Upto Tier IV)
Cannibalization is the objective

Manufacture
Manufacture of ice creams for the whole of South Asia in
Pune
Most vital ingredients imported; Chocolate and flavors
are the major imports
All varieties manufactured in the plant itself.

Initiatives
This presentation will deal with two initiatives taken by
Baskin Robbins in the area of SCM
Outsourcing distribution from factory to last mile to a cold
chain logistics company nationwide
Building IT infrastructure and MIS to aid in inventory planning
and distribution

Problems in Distribution
Cold chain logistics is central to the ice cream business
It is not the core competency of BR
They tried their own logistics system but failed

Outsourced Distribution
Snowman Cold Chain logistics is the national supply
chain partner for BR
Challenges to be tackled
Prebuilt product needed to be stored at the right temperature
so that quality is maintained. Power fluctuations and lack of
infrastructure are problems
Lack of Temperature Controlled Warehouses on Pan India basis
Seasonality of the demand for ice creams

Snowman Logistics
Snowman provides -25 C at its dedicated warehouses
to store prebuilt blocks
Such long duration storage is done for the first time in
India to offset demand during the season
Snowman has 18 warehouses in India with requisite
infrastructure

BR Distribution diagram
Milk run adopted through dedicated
trucks
W/H 1

Pune
manufactu
ring plant

W/H 2

Regional outlets

W/H 3

W/H
18

Dedicated
temperaturecontrolled

Transport Bangalore example

Bangalore has 55 franchise outlets of BR
Snowman implements milk-run system for distributing
from warehouse to outlets
10 trucks are used

IT Infrastructure
BR integrated all its outlets with a single MIS
infrastructure
One head office for dissemination, collection,
compilation and analysis of all information
5 Regional offices for co-ordination with franchisees
Gives a point-of-sale solution to the customer at the
front end
Also aids production planning, inventory planning,
distribution and marketing

Benefits to BR
Huge cost savings due to outsourced distribution and
warehousing
Distribution efficiency enabled rapid expansion across
the country
Outsourcing also allows BR to focus on its core
competency in product portfolio, taste and service
MIS makes planning of production and inventory easier.

About
Pepsi 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 MANAGEMENTPEPSICo

1.

Difficulties 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.

2.
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.
3.
Supply Chain Visibility
.With 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 Capabilities
Inbound 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 management
GS - standards (bar codes)
RFID tags for real-time stock replenishments
Commercial Security offerings
Counterfeit & pilferage
Online supply chain visibility across the chain
Pack 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 chain

Frito-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.
Strength
Frito-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 India

A 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 retailer
Frito-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.

Retailers
The 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