indian ice-cream industry and supply chain innovation at geddy’s team kaizen kurtis homan kongpon...
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Indian Ice-Cream Industry and Supply Chain Innovation at
Geddy’s
Team KaizenKurtis Homan
Kongpon KijnumSudavee Nantavipaovng
Afief Helmi Baasir
1st Round Room RAWLS 3098A
GSCMI 2013 Case Competition 2
Problem Statement Business Analysis Policy Analysis Recommendation Risk & Caveat Q&A
Agenda (Sudavee Nantavipaovng)
GSCMI 2013 Case Competition 3
Loss of profits during peak season Storage limitation of 350 units
Low capacity utilization during off-peak
Ineffective inventory policy Optimal service levels Maximize expected profit
Problem Statement (Sudavee Nantavipaovng)
Seasonality
Limited Capacity
Capacity Utilization
GSCMI 2013 Case Competition 4
Supply Chain (Sudavee Nantavipaovng)
Geddy’s Ice Cream
Supplier Manufacturer Retailer Customer
GSCMI 2013 Case Competition 5
Business Analysis (Kongpon Kijnum)
Key feature of product Sourcing
Seasonal raw material
Large product variation
Production High fixed cost
structure Temperature
sensitive
Key feature of market Demand
Seasonality High correlation of
temperature and seasonal factor demand for forecasting
Behavior of customer
Annual growth rate of 15-20%
GSCMI 2013 Case Competition 6
Policy Analysis (Kongpon Kijnum)
0 10 20 30 40 50 60500
600
700
800
900
1000
1100
Total Expected Profit
Common Top2 Top3 Scaled
Week
(100 Rupee)
Total (Rupee) :
5,251,424 5,151,509 5,145,167 5,247,328
GSCMI 2013 Case Competition 7
Policy Analysis (Kongpon Kijnum)
0 10 20 30 40 50 600
200
400
600
800
1000
1200
1400
Potential Profit
90% Common Current
Week
5,491,994 5,208,4485,251,424Total (Rupee):
(100 Rupee)
GSCMI 2013 Case Competition 8
Discrepancy in Profit (Kurtis Homan)
Low stocking rate of the lowest margin product Top 3 policy
Unexpected drop in actual sales
0 10 20 30 40 50 600.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%% Sales/Average Demand
TV BBS LL BTWeek
% S
ale
s/A
ve
rag
e D
em
an
d
GSCMI 2013 Case Competition 9
Recommendation (Kurtis Homan)
Common service level policy Peak season
Equal service level between available flavors Satisfy diverse customer tastes Increase storage to satisfy demand
Off-peak season Increase demand during off-peak period Specific product promotion during off-peak
based on the seasonality of raw materials Smooth production for peak season when raw
materials price decrease
GSCMI 2013 Case Competition 10
Implementation (Afief Helmi Baasir)
Short Term Long Term
Supply Chain Management Improvement & Higher Market Penetration
Focus on Cost Efficiency
Implement Common service level policy
Maintain product variety
Set Milestones for market expansion
Focus on market expansion
When differentiation of 90% to Common Service Level is about 525,000
Have more capacity per store
Expand to other geographical locations
Evaluate vendors to lower transportation and lead times closer to new locations
GSCMI 2013 Case Competition 11
Risk and Caveat (Afief Helmi Baasir)
• Lose first mover advantage
Focus Cost Efficiency
• Limited capacity for common service level potentially can lose market share for higher profit items
Common Service Policy
• Ice cream being held can expire or change in customer tastes for no sale
Smoothing Production
GSCMI 2013 Case Competition 16
Short Term Long Term
Cost efficiency + Better cost structure+ Less impact from exchange rate+ Better profitability- Loosing market share
- Herder to implement in long term-
Market expansion + Prime location+ Shorter lead time+ First mover advantages- High Investment- Less profitable
- Loosing first mover advantages- Harder to gain M.S.
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