Supply Chain Mangement Ppt.

8/11/2019 Supply Chain Mangement Ppt.

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Description of Chocolate

Chocolate is made fromcocoa beans found on thecacao tree. The cacao tree was first

discovered in the South

American rainforest. The three main

ingredients in chocolateare chocolate liquor, cocoapowder, and cocoa butter.

Different kinds ofchocolate use varyingamounts of these 3ingredients.

Picture of the Cacao Tree


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How Chocolate is Made

Cocoa pods areharvested

Pods are crushed andfermented.

Cocoa beans are takenout of the pods and thendried.

Beans are roasted,graded, and then ground.

Grinding the beanscreates a liquid calledchocolate liquor. Chocolate liquor - made

mostly of fat called cocoabutter.

Cocoa butter is extracted. Cocoa powder is also

created when beans areground.

Process creates chocolateliquor, cocoa powder,and cocoa butter.

Ingredients are blendedback together to createdifferent kinds ofchocolates.


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Types of Chocolate

Sweet Chocolate

Contains no milk solids

Cannot contain less than15% chocolate liquor

Dark Bittersweet Chocolate Contains the most chocolate

liquor.

It is sweet chocolate thatcannot contain less than35% chocolate liquor.

Semi Sweet Chocolate Similar to dark bittersweet

chocolate.

Baking Chocolate

Contains no sweeteners andno milk.


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Types of Chocolate

Milk Chocolate Contains milk and sugar,which differs frombittersweet and semisweetchocolate.

Cannot contain less than 12%milk and cannot contain lessthan 10% chocolate liquor.

Can contain other ingredientsbut must comply withregulations.

White Chocolate Technically not real chocolate Contains no chocolate liquor,

which is one of the mainingredients in chocolate.

Its made of cocoa butter,milk, and sugar.


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TARGET MARKET


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Particulars Cost Per Unit Total CostRaw Material

Sugar = 30,000

Cocoa Butter = 30,000

Peanuts = 32,000Peanuts = 20,000

Chocolate Coated Rasins = 40,000

Vanilin = 10,000

Almonds = 30,000Honey = 5,000

Boston Baked Bean = 15,000

Direct Labour = 70,000 1.56 70,000

Carriage on Material = 24,250 0.53 24,250

Prime Cost 7.25 3,26,250

Cost SheetFor one month

5.16 2,32,000

Total Output = 45,000 units


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Factory expenses

Fixed

Depreciation on Plant and M/c = 25,750

Rent = 15,000

Power and Consumable Store = 15,000

Factory Insurance = 15,000

Supervisors Salary = 5,000

Variable

Electricity Charges = 5,000

Power and Consumable Store = 10,000

Running Expenses of Machine = 15,000

Factory Cost 9.60 4,32,000

Office and Administration Expenses 4.40 630,000

Selling & Distribution Expenses 2.00 90,000

Total Cost 16.00 7,20,000

Net Profit (20% on selling price) 4.00 1,80,000

Sales 20.00 9,00,000

2.35 1,05,750


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Forward Logistics

The finished chocolates from manufacturing is stored in

the ware houses

Then comes the logistics and distribution where the goods

are packed and moved to various regional distribution

centers.

From RDCs the chocolates are distributed to different

outlets or Retailers

INNOVATIVE PACKAGING


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INNOVATIVE PACKAGING

(REVERSE LOGISTICS)

The innovation marks a potentially significant breakthrough for the foodand packaging industries, as it could pave the way for large numbers ofchocolate bars to be wrapped and sold in the stuff of their creation.

Approximately 10 tonnes of cocoa husk waste accounts for every singletonne of dry cocoa bean produced, or 76% of the fruit itself. The companysays that, unlike other cocoa recycling processes, the paper is made without

burning or gradual degrading of the fibres of the cocoa husk, the finishedlight brown paper utilises the cocoa as a natural colourant, avoiding theneed for artificial dyes


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Modes of transportation

Transportation is necessary to Move purchased goods from

suppliers to buyers and move finished goods to the customer.

Modes of transport used by supplier Road transport : It is flexible in nature and can be reached to

any parts of the country and it cost less as compare to other

modes of transport.

Rail carriers : compete most favorably when the distance is long

& the shipments are heavy or bulky.


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Air carrier : Very expensive relative to other modes but

also very fast

Water carrier : In flexible and in expensive as compare toothers mode of transport


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Demand requirements to design a

warehouse Is demand high or low?

The new calorie free chocolate analysis shows that the change in calorie free

chocolate consumption occurred for both women (up from 18% in 2000 to

21% in 2010) and men (up from 14% to 19% in the same period).

Still, only about 20% of people are concerned of diet on any given day with

the majority (80%) not maintaining it , the report finds. It included calorie-

free and low-calorie versions

Overall, about half of the population, ages 2 and older, consume fatty things

on any given day. Among boys 2 to 19, 70% consume them while 40% of adult

women consume them.

Hence we can say that the demand for our product is high.


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Warehouse design As our product is not seasonal we have to have a strong warehouse design to

support our production and match our demand in the market. Which can

happen through maintaining proper consolidation and break-bulk, (2) sorting,

and (3) reverse logistics.

Our consolidation is very effective it goes in the following way

The warehouse receives materials, from a number of sources, that are

combined in exact quantities into a large single shipment to a specificdestination.

The benefits of our consolidations are

i. realization of the lowest possible freight rate,

ii. timely and controlled delivery, and

iii. reduced congestion at a customersreceiving dock.The warehouse enables both the inbound movement from origin and the

outbound movement to destination to be consolidated into a larger size

shipment, which generally results in lower transportation charges per unit

and most often quicker delivery


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The design

Bulk breaking

A break-bulk operation receives a single large shipment and arranges fordelivery to multiple destinations. Economy of scale is achieved by transporting

the larger consolidated shipment. The break-bulk warehouse or terminal sorts

or splits out individual orders and arranges local delivery.


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Sorting

The basic benefit of sorting is to reconfigure freight as it flows from origin to

destination. Three types of assortmentcross-docking, mixing.

a) cross-docking:

Our objective is to combine inventory from multiple origins into a pre specified

assortment for a specific customer. the jest of cross-docking is on-time delivery

from each manufacturer. The manufacturers, in turn, may have sorted, loaded,

and labeled the appropriate quantity by destination. Product is then literally

moved across the dock from receiving into a truck dedicated to the delivery

destination


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Mixing :

mixing is usually performed at an intermediate location between shipment

origin and destination. carloads or truckloads of products are shipped from

origin to mixing warehouses. Upon arrival at the mixing warehouse, shipments

are unloaded and sorted into the combination desired by each customer.

These inbound shipments are planned to minimize inbound transportation

cost.


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Reverse Logistics Processing

A great deal of the physical work related to reverse

logistics is performed at warehouses. Reverse logistics

includes the activities to support:

(1) returns management,

(2) remanufacturing and repair,

(3) remarketing,

(4) recycling, and

(5) disposal


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LOCATION

The locations probably we select are going to cover would be mostly

the metro politan cities and regions where the IT sector is growing fast

REASONS

a) Less concern on health i.e the diet they take have more fat in it, as our

product is of low calories we may taste success in matching our

demand which is mentioned in the earlier slides

b) They have less time to concentrate on health and

c) Every person now and then picks up a chocolate now and then why

cant it be a lower calorie chocolate.


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WAREHOUSE LOCATION In planning warehouse layout, The most important product variables we

considered in a slotting plan are product velocity, weight, and special storage

requirements.

Product velocity is the major factor for driving our warehouse layout. High-

volume product should be positioned in the warehouse to minimize movement

distance.

As our product is high-velocity products it is positioned near doors, primary

aisles, and at lower levels in storage racks. Our positioning minimizes warehouse

handling and reduces the need for frequent lifting.Our Warehouse will be locatedon outskirts of the city area like nearby to our customers i.e outer ring road

HI-TECH city.


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WAREHOUSE DESIGN

Warehouse design must consider product movement characteristics. Three

factors to be determined during the design process are the number of floors toinclude in the facility, a cube utilization plan, and product flow.

The ideal warehouse design for us is one-floor building that eliminates the need

to move product vertically (reduces the time).

Our warehouses are designed with 25- to 30-foot clear ceilings, although

selected automated and high-rise handling equipment can effectively use

heights over 100 feet.

It supports straight product flow through the building.

Bill Of M t i l


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Bill Of MaterialBill of Materials

Team: AMIGOS Date:

for howmany

months: 1 month

Description Qty

Unit of

Meas Unit Price ( ) Total Price

Describe the Part How

Many

Piece,

Inch, Etc. Cost Per Unit

coco beans 1000 kg $500.00 $500,000.00

milk 1000 liters $36.00 $36,000.00

sugar 1000 kg $70.00 $70,000.00

labour 25 humans $15,000.00 $375,000.00

eggs 1000 dozzen $36.00 $36,000.00

coco butter 1000 kg $800.00 $800,000.00

lactose 100liter $200.00 $20,000.00

$0.00Subtotals: $1,837,000.00


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For calculating BOM we considered the materials required

to manufacture our product(for 1 month) and then

estimated the cost for each unit and finally to produce the

products for 1 month we incurred a cost of $1,837,000.00

For each year we have the capacity of producing 22,000

tones

The labors working hours will be 8 to 12 hrs a day.


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Beans and coca

is mixed in the

factory

Milk+sugar to coca

mass=chocolate

liquid

chocolate liquidevoprated=chocolat

e crumb

chocolate crumb

cooked to get

cadbury

Crumb to pinmill mixed with

coco liquor &butter

Assortments in to

bars

refining,conching and

temperingSmoothing of chocolet

wrapingProduct is ready

Process diagram


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PRODUCTION LAYOUT

The layout we use is product layout.

Layout is in following way

PRODUCTION AREA

BEANS STORE AND COLD


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BEANS STORE AND COLD

ROOM SPRINKLER SYSTEMS


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Central Stores Sprinkler System


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Overall sprinkler system


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Chocolate Craving Theories

Chocolate cravings are a result of the chemical ingredientsfound in chocolate.

Chocolate cravings come from the sensory properties ofchocolate = texture, taste, smell, and color.

Chocolate cravings are influenced by culture.

Many theories exist, but there is no conclusive scientificevidence on what causes people to crave chocolate.


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Potential Health Benefits

Chocolate may be good for the heart.

Chocolate contains chemicals like those found in red

wine and green tea.

Helps improve circulation

Helps cut down blood pressure

Chocolate contains flavanols.

Helps in preventing the oxidations of bad cholesterol, which

reduces the stickiness of blood platelets and improve blood

vessel elasticity.

Theobromine, found in chocolate, was found to

treat coughs better than codeine.


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AAA into supply chain Agilitythe ability to respond quickly and cost-effectively to unexpected changeis

critical because in most industries, both demand and supply fluctuate more rapidlyand widely than they used to. In fact, the best companies use agile supply chains todifferentiate themselves from rivals.

Supply-chain agility and resilience no longer imply merely the ability to manage risk.It now assumes that the ability to manage risk means being better positioned thancompetitors to deal withand even gain advantage fromdisruptions. Key toincreasing agility and resilience is building flexibility into the supply-chain structure,

processes, and management. Adaptability - The best companies tailor their supply chains to the nature of the

markets they serve. They often end up with more than one supply chain, which can beexpensive, but, in return, they secure the best manufacturing and distributioncapabilities for each offering.

All companies must align their supply-chain infrastructure and management withtheir underlying value proposition to achieve a sustainable competitive advantage.

That is, they must align the interests of all the firms in the supply network so thatcompanies optimize the chains performance when they maximize their interests.

Alignment - One way companies align their partners interests with their own is byredefining the terms of their relationships so that firms share risks, costs, and rewardsequitably. A prerequisite to creating alignment is the availability of information so thatall the companies in a supply chain have equal access to forecasts, sales data, andplans. Next, partner roles and responsibilities must be carefully defined so that there is

no scope for conflict. Finally, companies must align incentives so that when companiestry to maximize returns, they also maximize the supply chains performance.


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FUTURE OF THE PRODUCT

According to KPMG, there are almost two track market, the developedand the developing. In the developed market a lot more innovation isneeded to grow or maintain the market share. In the developingmarket like BRIC countries, manufacturers need to cater to thespecific consumer taste for growth. It also says industries response toupcoming health regulation could mold the future.

Sustainable sourcing, packaging, and consolidation and outsourcingchocolate manufacturing will be of growing importance. To grow inemerging market a global set of local operations is needed. India isanticipated to grow faster than all emerging markets according toKPMG. There is an opportunity in new developing markets in eventingand gifting chocolates, introduction of spices into chocolates can alsogain momentum.

The emergence of health legislation from national government could bea threat to the industry. The industrys marketing capacity forcommunicating the health benefits are yet to be realized by otherchocolatiers but regulation need not become burdensome for usbecause we are bringing nutritional benefits in our chocolate.

There is a threat of decrease in supply of cocoa, which is the main

ingredient of our chocolate, in future.


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Supply Chain Mangement Ppt.

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