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 12

Thank you Kaizen

Q&A

GSCMI 2013 Case Competition 13

Thank you Kaizen

Q&A

GSCMI 2013 Case Competition 14

Thank you Kaizen

GSCMI 2013 Case Competition 15

Back up

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.