Indian IceCream Industry and Supply Chain Innovation at

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Indian Ice-Cream Industry and Supply Chain Innovation at Geddy’s Team Kaizen Kurtis Homan Kongpon

Indian Ice-Cream Industry and Supply Chain Innovation at Geddy’s Team Kaizen Kurtis Homan Kongpon Kijnum Sudavee Nantavipaovng Afief Helmi Baasir 1 st Round Room RAWLS 3098 A

Agenda § § § (Sudavee Nantavipaovng) Problem Statement Business Analysis Policy Analysis Recommendation Risk

Agenda § § § (Sudavee Nantavipaovng) Problem Statement Business Analysis Policy Analysis Recommendation Risk & Caveat Q&A GSCMI 2013 Case Competition 2

Problem Statement (Sudavee Nantavipaovng) § Loss of profits during peak season Seasonality § Storage

Problem Statement (Sudavee Nantavipaovng) § Loss of profits during peak season Seasonality § Storage limitation of 350 units § Low capacity utilization during offpeak § Ineffective inventory policy § Optimal service levels § Maximize expected profit Limited Capacity Utilization GSCMI 2013 Case Competition 3

Supply Chain (Sudavee Nantavipaovng) Geddy’s Ice Cream Supplier Manufacturer Retailer GSCMI 2013 Case Competition

Supply Chain (Sudavee Nantavipaovng) Geddy’s Ice Cream Supplier Manufacturer Retailer GSCMI 2013 Case Competition Customer 4

Business Analysis § Key feature of product § Sourcing (Kongpon Kijnum) § Key feature

Business Analysis § Key feature of product § Sourcing (Kongpon Kijnum) § Key feature of market § Demand § Seasonal raw material § Large product variation § Production § High fixed cost structure § Temperature sensitive § Seasonality § High correlation of temperature and seasonal factor demand forecasting § Behavior of customer § Annual growth rate of 15 -20% GSCMI 2013 Case Competition 5

Policy Analysis (Kongpon Kijnum) Total Expected Profit (100 Rupee) 1150 1100 1050 1000 950

Policy Analysis (Kongpon Kijnum) Total Expected Profit (100 Rupee) 1150 1100 1050 1000 950 900 850 800 750 700 650 600 550 500 0 10 Common Total 5, 251, 424 20 30 Week Top 2 5, 151, 509 40 50 Top 3 Scaled 5, 145, 167 5, 247, 328 GSCMI 2013 Case Competition 60 6

Policy Analysis (Kongpon Kijnum) Potential Profit (100 Rupee) 1400 1200 1000 800 600 400

Policy Analysis (Kongpon Kijnum) Potential Profit (100 Rupee) 1400 1200 1000 800 600 400 200 0 0 Total (Rupee): 10 20 30 Week 40 50 90% Common Current 5, 491, 994 5, 251, 424 5, 208, 448 GSCMI 2013 Case Competition 60 7

Discrepancy in Profit (Kurtis Homan) § Low stocking rate of the lowest margin product

Discrepancy in Profit (Kurtis Homan) § Low stocking rate of the lowest margin product § Top 3 policy § Unexpected drop in actual sales % Sales/Average Demand 140. 00% 120. 00% 100. 00% 80. 00% 60. 00% 40. 00% 20. 00% 0 10 20 TV 30 Week BBS 40 LL GSCMI 2013 Case Competition 50 60 BT 8

Recommendation (Kurtis Homan) § Common service level policy § Peak season § Equal service

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 9

Implementation (Afief Helmi Baasir) Supply Chain Management Improvement & Higher Market Penetration Short Term

Implementation (Afief Helmi Baasir) Supply Chain Management Improvement & Higher Market Penetration Short Term q Focus on Cost Efficiency q Implement Common service level policy q Maintain product variety q Set Milestones for market expansion Long Term q Focus on market expansion q When differentiation of 90% to Common Service Level is about 525, 000 q Have more capacity per store q Expand to other geographical locations q Evaluate vendors to lower transportation and lead times closer to new locations GSCMI 2013 Case Competition 10

Risk and Caveat (Afief Helmi Baasir) Focus Cost Efficiency • Lose first mover advantage

Risk and Caveat (Afief Helmi Baasir) Focus Cost Efficiency • Lose first mover advantage Common Service Policy • Limited capacity for common service level potentially can lose market share for higher profit items Smoothing Production • Ice cream being held can expire or change in customer tastes for no sale GSCMI 2013 Case Competition 11

Thank you Kaizen Q&A GSCMI 2013 Case Competition 12

Thank you Kaizen Q&A GSCMI 2013 Case Competition 12

Thank you Kaizen Q&A GSCMI 2013 Case Competition 13

Thank you Kaizen Q&A GSCMI 2013 Case Competition 13

Thank you Kaizen GSCMI 2013 Case Competition 14

Thank you Kaizen GSCMI 2013 Case Competition 14

Back up GSCMI 2013 Case Competition 15

Back up GSCMI 2013 Case Competition 15

Short Term Long Term Cost efficiency + Better cost structure + Less impact from

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. GSCMI 2013 Case Competition 16