Transcript
Cadbury is a British company and bases many of its
operations in Britain. This area has some of the highest wage
rates.
Now that Kraft has bought the company, they are strategically
looking to phase out many operations in Britain for cheaper
areas of labor such as Eastern Europe and overseas countries.
Cadbury is the brain child
of John Cadbury
Starting in form of grocery
business in Birmingham in
1824
In 1853, Cadbury became
the confectioner to the
British Crown.
In 1860, Richard and
George took command and
expand it further.
Today Cadbury operate
Globally
John Cadbury
Cadbury Schweppes PLC is a
British confectionary
company
Headquarters in
Uxbridge, England.
The oldest and largest family-
run businesses in the world
In 1969, it merged with
Schweppes Limited
Third leading producer of soft
drinks and fourth leading
confectionery manufacturer in
the World.
The Food and Beverage Industry:
Fiercely Competitive Marketplace Global market forces
Consolidation
Changing consumer preferences
Increasing government regulations
Product and Major Brands Three kinds of confectionery: Chocolate (55%), Gum(14%) and Candy(31%)
13 focused Brands 12 focus markets 7 focus customers
Turkey
Brazil
India
ChinaSouth Africa
Japan
USA
Mexico UK
France
Russia Australia
Mission: Financial
Scorecard, judiciously
reinforced by our
Priorities, Commitments and
Culture.
Vision: to be the World‟s
biggest and best
Confectionery Company
Core Values:
Performance, Quality, Respect
, Integrity and Responsibility
Growth: Profitable Growth in
Emerging market
(India, China, Russia)
Cost & Efficiency: Managing
brands on a global
basis, Outsourcing low value added
processes and Reconfiguring
Manufacturing Network.
Disciplined Investment: In
2007, Partnership with Barry
Callebaut (the world‟s largest Cocoa
processing Company)
Superior Returns: Strong Dividend
Growth, an Efficient Balance
Sheet, consistent improvements in
ROIC
•Cacao varieties
•Processing
•Blending
•Cinching
•Tempering
•Storage
Processes and OperationsInputs Outputs
Internal and External Customers
Information on Performance
•Milk
•Cocoa
•Palm Oil
•Other
Grocery
Products
Delicious
Chocolate
, Gum and
Candy
And
Beverages
Source: Krajewski, Ritzman, & Malthora, 2010
“Purple Goes Green” is the part of Cadbury‟s Strategic Mission and
Vision ( Objective: reduce 50 % Carbon Emissions & 10 % reduction
in Packaging by 2020).
Link with Singapore‟s Sustainable Manufacturing Centre (SMC).
Co-operation with United Nation Development Program (UNDP) and
Government of Ghana, the Company promised to invest $ 87 million
over next decade to support high-quality sustainable cocoa production
Bournville (The birth place of Cadbury Company), is still the
Greenest areas of Birmingham.
Productivity improvements:
Replacing Air Compressors, Chilling system machines at
Manufacturing and Packaging lines.
Technological Changes:
Ringwood, Victoria Plant Identifies many opportunities for
making innovation and technologies that will reduce the waste
from the Chocolate.
Diversity in the Workplace:
“Diversity & Inclusiveness” is the punch line on its website
for creating a welcome Workplace for everyone.
Flow Chart of Process Analysis at
Cadbury
Research
& Design
Product
launchProduction
Modificatio
ns
Consumer
trials
Ingredients
& recipes
Production
processesPackaging
Tasting
Cadbury Schweppes plc was awarded Business in the
Community's Jubilee Award
GOLD award for the "Best Insights and Strategic
Thinking"
Brammer Energy & Environmental Improvement Award , 2009
Cadbury's Gorilla Among D&AD
Winners, 2008
Core labor rights and dignity at work: Respect the rights of employees to join legally recognized labor
unions.
Children are employed only under circumstances which protect them
from physical risk and do not disrupt their education.
Not tolerate any form of harassment in the workplace.
Health and safety in the Workplace: Healthy and safe work environment for each employee.
Fair remuneration: Working hours and remuneration are reasonable and comparable to
those offered by similar companies
Diversity and respect for differences:
Manage diversity to create competitive advantage
Opportunity for development:
Opportunities of personal and career development regardless of their gender, age, marital status, sexual orientation, disability, race, religion or national origin.
Chemistry, Science, Food/nutrition, or Chemical Engineering Degree holders are regular coached by managers.
Managing an annual sensory screening program to develop product knowledge and understanding of the Confectionery Categories.
Analytical Laboratories (Microscopy, DNA and Protein and Investigative Analysis) provide training the Employees
Newsletters, the Group website and about 250 local websitesalso help employees to know what is going on within the business at local, regional and Group levels.
External Constraints Market Extent (Bad)
Ability of a producer to gain access to appropriate resources
(Good)
Internal Constraints
The existing scale and capacity of buildings and machinery
used in the production process(Good)
The skills and training of the labor force(Bad)
The availability and flexibility of the labor force(Bad)
Access to an abundant supply of parts and raw
materials(Good)
Time(Good)
Finance(Good)
Extent Market
Many competitors:
▪ Thorntons
▪ Lindt & Spruengli
▪ Nestlé S.A.
▪ Ferrero SpA
▪ Hershey Company
▪ Wrigley
34.1
29.7
36.2
Chocolate Market share
Cadbury
Hershey
Others
23.5
42.1
34.4
Gum Market Share
Cadbury
Wrigley
Others
Recent Possible Activities for Extent Market
Market Penetration
▪ Try to achieve growth using existing products in there current market
segment, to try and increase its market share.
Product Development
▪ Targets a new product at there current market segment.
Market Development
▪ Seeks growth by targeting there existing products at a new market.
Diversification
▪ Tries to diversify into new businesses by producing new products to
aim at a new market.
Labor Force
„How can we engage our
new hires early so they
understand what‟s great
about Cadbury and feel part
of our global organization?‟
Some Key drivers for labor
Improve the quality of new hire training by delivering a clear, consistent
message.
Delivery a solution that is easy to use and maintain locally.
Provide the ability to link to other resources such as the intranet for
more information on policies and processes.
Develop the training in an engaging format.
Include a mechanism for tracking completion of the learning activity.
Introduce all new hires to the performance management process (part of
People Processes).
Introduce newly hired and newly promoted managers to their role in
people processes such as performance management and development
planning at Cadbury.
Three broad classes of Capacity Planning
Lead strategy
▪ It is adding capacity in anticipation of an increase in demand. It is an
aggressive strategy with the goal of luring customers away from the
company's competitors. It often results in excess inventory, which is
costly and often wasteful.
Lag strategy
▪ It refers to adding capacity only after the organization is running at full
capacity or beyond due to increase in demand. This is a more
conservative strategy. It decreases the risk of waste, but it may result in
the loss of possible customers.
Match strategy
▪ It is adding capacity in small amounts in response to changing demand in
the market. This is a more moderate strategy.
Service Level Optimizer 99+ Before After
Inventory buffered variability in supply anddemand. Planners chased demand due tounreliable stocks.
Inventory buffers variability in supply anddemand with much less manualintervention
Safety stocks determined by historical valuesor by spreadsheets using basic statistics
Safety stocks determined by algorithmsthat model the natural uncertainty ofdemand and supply
Used normal distribution, if anything Reliably defines correct relationshipbetween stock and service level at theitem/location level
Intermittent analysis and static results couldnot keep up with dynamic changingenvironment
Optimal inventory level for eachSKU/location across the networkdynamically fed to R/3
Not integrated with R/3 — manually updated Highly automated. Direct interface to R/3.
Inventory management focused “Service-driven” inventory solution;maintains and guarantees targetcustomer service level
Lag 2 Forecast Error at the SKU level Historical order/line item variabilitygenerates safety stock. Considers notonly quantities, but also order frequency.
Reduce costs
By using JIT product line, the inventory cost of Cadbury reduced from
$670,000 to $200,000
Improve the productivity
Because of reducing stock holding, Cadbury was able to cut the assembly
time by over 95%
Improve the competitive advantage
JIT creates a more flexible business that has better communication with
customers and suppliers, and can react more quickly to market
demands, which bring more competitive advantages for Cadbury
Improve job satisfaction
JIT demands active participation in the production process from employees.
It increases their skills, gives them greater responsibility and fosters an
interest in the performance of the whole company
Raw Material
from Farming
70 %
Ghana
30 %
Other
Locations
Manufacturing and
Packaging
Sales and
Distribution
Cadbury
Manufact
uring
Plants
Cadbury
Owned
Stores
Wholesale &
Third Party
Stores
C
u
s
t
o
m
e
r
Cadbury emphasizes responsibility both ethically and environmentally. In their relationship with Ghana farmers they promote fair wages and support the country‟s economy.
Pros: Ghana is known for having the best quality bean available. Having a good relationship with the farmers ensures access to the best ingredients.
Cons: Farmers in Ghana have recently had trouble with their crops and have delivered lower outputs. This results in a smaller supply for the company who is limited by their main ingredient. This has effected Cadbury financially and may continue to be a problem under Kraft.
End Customer
Needs Product to Be Available
Needs Product to be Safe
Wholesale and Retail
Reliable Supply Chain
Dependable Inventory Restocking
Traditionally Focus area of
Location : Near Canal
links, Rail & main Roads
Kraft has similar motives and
also does the same for their
office buildings. They locate
them near public transport and
save on items such as parking
facilities and security.
It is a fascinating story of Industrial and Social Development.
The story of a small family business growing up, and to become an
International World Leader.
A story of Technical Invention and secret recipes, marketing savvy
and the creation of great Brands.
A story of people who are passionate, principled, pioneering and
just love confectionery.
Decrease blood pressure Improve circulation Lower death rate from heart disease Improve function of endothelial cells that line
the blood vessels Defend against destructive molecules called free
radicals, which trigger cancer, heart disease andstroke
Improve Digestion and stimulate kidneys Has been used to help treat patients with
anemia, kidney stones and poor appetite
PEPSI USD $44.3 BILLION KRAFT FOOD USD $40.4 BILLION M &M Mars USD $30 BILLION COCA COLA USD $ 21.6BILION HERSHEY USD $5.30 BILLION
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