Indian IceCream Industry and Supply Chain Innovation at

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 & Caveat Q&A GSCMI 2013 Case Competition 2

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 Customer 4

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 950 900 850 800 750 700 650 600 550 500 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 800 600 400 200 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 § 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 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 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 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 13

Thank you Kaizen GSCMI 2013 Case Competition 14

Back up GSCMI 2013 Case Competition 15

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