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Through a well established supply chain, the Cadbury has managed to maintain an effective and reliable supply of its products which are either manufactured by the company or by a third party. The role of this supply chain may include sourcing ingredients, packaging materials, manufacturing and distribution of products (ODIH 15). It also conducts planning, ensuring quality and safety of employees and products as well as managing the organization’s fixed assets which may include warehouses and manufacturing facilities.
The success of the company in marketing, manufacturing and commerce is due to proper logistical strategies adopted by the company. The operations acquire the necessary resources for crating the product while logistics facilitates the movement of everything involved in the economic activity. Efficient logistics in the supply chain of Cadbury’s Milk chocolate enables the company as a manufacturer to gain access to wider market for its Milk chocolate product. It also reduces waste incurred in both production and the use of capital. The purpose of the supply chain is mainly bridging the gap between the supplies and the customers. The main aim of this paper is to give an analysis of the key activities and processes in the supply chain of Cadbury’s Milk chocolate.
Some of the Cadbury chocolate is sourced from some specialist manufacturing companies such as Barry Callebaut after which the company does final processing of the chocolate. However, to manufacturer its own chocolate and other products, Cadbury uses cocoa, beans, dairy products, gum base, sugar, and other sweeteners, fruits and nuts (Cadbury 8). Each of the products produced by Cadbury requires specific ingredients and requirements for its production. Cadbury Daily Milk is the largest chocolate brand while other brands which are produced by Cadbury include Crème Egg, Green, Flake and Black’s (Cadbury 13). Cadbury Schweppes was among the companies producing confectionery consumed chocolate in addition to sugar sweets whose market was however less concentrated in the UK (Cox 2002)
Production of the Dairy Milk chocolate
In 1897, Cadbury added milk to chocolate which became known as milk chocolate and large sales were made. This was followed by an improvement in 1901when a new and better milk chocolate bar than other milk chocolate from abroad was produced. Currently, the secret recipe that is used to make over250 million bars is kept safely under the Bougainville factory based in Birmingham. Earlier, technical developments were the mixing of solids of milk with a mass of cocoa during the making chocolate by Daniel Peter of Switzerland. This practice of consuming milk chocolate has been a growing and striking feature in cocoa and chocolate industry throughout the world today (Wikes, et al 100). The World War II is believed to have contributed to the innovation of chocolate although Cadbury Dairy Milk was difficult during the war since there was o fresh milk but instead opted for powder milk which was later named Ration Chocolate. There were also final ingredients for the chocolate mass, sugar, skim milk powder among others. A decrease of sugar during this process as the chocolate mass was increased giving rise to a chocolate with a taste which was less pleasing than the normal chocolate bars.
Transformation Process of Cadbury
The production of Cadbury Dairy Milk chocolate Bars products using a product layout that was developed by the Cadbury’s engineers has been done to a high degree of efficiency and consistency. In this process, the main ingredients are cocoa beans, fresh milk and sugar. The first stage involves the preparation of the liquid chocolate from cocoa bean, fresh milk and sugar and the specialized equipment used are connected by conveyers and pipes. For the production to be continuous there is consistency in the whole process as well as employment of rate of production continuous process. In the second stage, the liquid chocolate channeled by a pump through heated pipes to a department specialized in molding after which automatic dispensing takes place in a moving line of precision-made plastic moulds which finally becomes the Cadbury chocolate bars. The third stage involves a process where the bars are vibrated so as to remove any trapped air bubbles after which the bars are continuously conveyed into large refrigerators to harden. In the fifth stage, there is inversion and shaking of the moulds out of the mould bars. Finally, the bars wrapped and packaged by a set of highly automated machines before being transported to a warehouse for supply to the customers (Short Case 196-197).
Linkage in the Supply Chain
Cadbury, just as any other organization, delivers products to its consumers. However, there is a unique supply chain for every product and this can be complicated and long. The supply chain of a bar of Cadbury’s Milk chocolate begins with the growth of the main ingredients and ends when the bars of chocolate are bought, consumed and disposed by a customer. The supplier base of the company is quite diverse in the UK although it is highly dominated and also concentrated by domestic producers. A sustainable supply base of the quality Dairy Milk chocolate brand and other related through a sustainable sourcing which is the main responsibility of the supply chain. Supply chain is one of the eight key commitments of The Cadbury Schweppes plc Environmental Policy is to promote environmental concerns for employees and other stakeholders throughout the supply chain of the Dairy Milk chocolate. In managing the supply chain, there is need to protect the reliability of the supply chain of the company through being aware of the supplier environmental risks which pose a danger in the routinely running of the business. One of the measures taken for this protection is the development of the guidelines on how purchasing is carried out and thus the overall standards within the supply chain are raised (Schweppes 28).
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Cadbury is committed to expand its supply chain for chocolate through signing memoranda of understanding with other chocolate dealers such as Barry Callebaut. This outsourcing trend in the chocolate industry has crossed over from industrial chocolate into the final consumer product. For instance, the New Fairtrade Cadbury Dairy Milk bars has for the first time rolled off its production and is about to be on shops very soon. Due to the company’s commitment to production of chocolate, Fairtrade cocoa from Ghana has tripled in volumes thus creating more opportunities for cocoa dealers down the supply chain and finally to thousands of growers. Both within and outside UK, Cadbury’s emerging markets are the largest and most broadly spread (Cadbury Fair Trade 2013).
By 2008, Cadbury had an average global sale of 150 billion which is confectionery a large market, actually the fourth largest segment on the basis of packaged foods supply.
Risks involved in the supply chain
One of the major commitments of the Cadbury is improving the performance of the suppliers through maintaining good communication with them. However, these suppliers have to be environmentally knowledgeable and responsible (Schweppes 28). The company, for instance, has continued to encourage supplies to advice Cadbury Schweppes to select material, such as those used for packing, which will have minimum impact in the environment (Schweppes 28). The company has initiated a communication program to inform its suppliers of its environmental standards and also help gain understanding of the environmental performance of the suppliers. For the awareness of the requirements to be improved, some Environmental policy has been developed by the company and a copy sent to all its major suppliers in the supply chain (Schweppes 3).
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Chocolate does not withstand hot temperatures and therefore hot countries producing or transacting with it are vulnerable to incurring huge loses when this product becomes unfit for consumption. However, Cadbury has developed temperature tolerant chocolate by re-refining it after the conching step. This is achieved by reducing the amount of sugar particles coated with fat by shearing of this particles and hence producing a sugar mix in the chocolate that is more continuous (Nieburg 2012)
Although the costs of having a lot of inventory are many, inadequate of them can again result to lose of customers. Cadbury introduced an efficient and effective manner of controlling inventory through Service Level Optimizer 99+ which can be easily integrated into the already existing SAP APO system. The implementation of this inventory led to less human intervention of demand control as well as buffer variability, high automation of the safety rocks (Cadbury 26)