Cadbury

Presented By:

AJAY KUMAR

Introduction

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.

Around 65,000

Employees

35,000 direct and indirect

Suppliers

Direct operation over 60

Countries

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

Operations Strategy of Cadbury

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

Using Operations to Compete

Participates in the Global Competitive

Marketplace

•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.

Capacity Planning & Constraint

Management

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.

Cadbury Way

Lead strategy Match 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

Supply Chain Design &

Integration

Resource Planning & Scheduling

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

Location Planning

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

Wrigley’s

NESTLE

M AND M(MASTERFOODS)

HERSHEY

COKE

PEPSI

COKE (EG. MINUTE MAID)

PEPSI (TROPICANA,BRISK IEED TEA)

OCEAN SPRAY

WELCH’S

DOLE AND DEL MARTE( MOTT’S APPLE SAUCE)

Thorntons plc 180 MILLION POUND

Ferrero SpA EURO 6.3 BILLION

Nestlé S.A. $107.6 BILLION

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

Thornton’ s, Lindt, Lindor, Master food (mars)

Questions…???????

Thanks