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Logistics is a central, essential feature for all economic activity. It entails the movement of good from the point of origin to the point of storage or consumption. Almost all human activities ultimately depend on such movement of goods. Therefore, an organization cannot accomplish any marketing, manufacturing, or even commerce without logistics (ODIH 2010). This process begins when the customers produce the demand for the products; they pass this message to the operations; the operation acquires the necessary resources and crates the product while the logistics facilitate the movement of everything in this loop. The supply chain serves the purpose of overcoming the gap between suppliers and customers.
Cadbury is among the oldest chocolate manufacturers in the world. It is one of the most successful multinational companies, based in the UK while serving the global market. Cadbury’s global value chain comprises of 130 factories and 41,000 direct employees from all 60 countries of the world. The company began by selling chocolate and cocoa in 1824 (ODIH 2010). However, it has continually improved and added more products. One of such products is the Dairy Milk chocolate. The supply chain of a bar of Cadburys Milk Chocolate starts with the growth of the main ingredients and ends with the consumption and disposal of the final product by the customer.
Cadbury’s Supply Chain function facilitates effective, reliable supply of its products, whether they are manufactured by Cadbury or by a third party. The role of the supply chain includes sourcing ingredients, packaging materials, manufacturing, and distribution (ODIH 15). In addition, the supply chain conducts planning, customer services, ensuring quality and safety of employees and products, and managing the organization’s fixed assets including its warehouses and manufacturing facilities. This paper analyses the key activities and processes in the supply chain of a bar of Cadburys Milk Chocolate.
One of the main Cadbury Schweppes product lines is Cadbury’s Dairy Milk. A bar of the Cadbury’s Dairy Milk chocolate contains 23% of cocoa from Ghana, and milk products. Cadbury sources part of its chocolate from some specialist manufacturing companies such as Barry Callebaut. The company then processes the rest itself. The company’s main source of raw cocoa beans is Ghana (Cadbury 2009). Cadbury sources all its cocoa from Ghana to ensure high quality chocolate, since Ghana maintains the good quality of its cocoa, unlike other producing countries that experience a downward trend after liberalization. Cadbury began buying from Ghana in 1908, and has since developed a strong commercial relationship with the country. In Ghana, Cadbury mainly purchases its cocoa through cocoa traders. The company purchases only a small amount directly from the Cocoa Marketing Company (CMC). Cadbury then transports the raw beans directly to its premises in the UK.
The company has a diverse supplier base. To manufacture its confectionery products, it uses a wide range of raw materials including cocoa beans, dairy products, gum base, sugar and other sweeteners, fruits and nuts. Each of the Cadbury’s products requires specific ingredients and requirements for production. (Shweppes 2012). Thus, the supply chain has the responsibility of maintaining a sustainable supply base. To maintain the high quality of its products and the brand, sustainable sourcing is essential. Cadbury achieves this through ethical sourcing while forming Cadbury Cocoa Partnership to ensure sustainable sourcing. Additionally, Cadbury’s supply chain team is responsible of managing the risk within the supply base. The team develops individual development plans, strategies and audit programs to help curb these risks.
The company is committed to improving the performance of its suppliers. The company aims at dealing with suppliers that are environmentally knowledgeable and responsible. Therefore, it puts considerable efforts to maintain good communication with the suppliers. For instance, the company encourages suppliers to advise Cadbury Schweppes about the selection of materials that will minimize environmental impact (Schweppes 2012). In addition, Cadbury’s supply chain has developed purchasing guidelines that indicate the company’s preferred options for all the required items ranging from the building materials and machinery to goods and services.
The company also aims at maintaining a friendly communication flow with its suppliers. It encourages a two-way communication with its suppliers in various ways. The company has initiated a program to communicate its environmental standards with its leading suppliers and gain an understanding of its suppliers’ environmental performance. To improve the awareness of its requirements, Cadbury develops its own Environmental Policy and sends a copy of it all major suppliers. The company intends to extend this program and reach all the suppliers in its supply chain.
Upon arrival of the beans in the UK, Cadbury processes them. The process involves roasting, grinding and finally processing the beans. This takes place at Cadbury’s plant in Wales. After processing, the processed cocoa is transferred to the milk processing plant. From here, it is forwarded to Cadbury manufacturing and molding plants, where the company does the final product. From these plants, the chocolate products are distributed to wholesalers and supermarkets directly. The supply chain is responsible not only for the movement in the manufacturing processes, but also for all purchases and distribution of the raw materials and the end product respectively.
The Cadbury Dairy milk chocolate bar is sold to consumers through different outlets. The company uses regional distribution centres located in various countries. The final part of the supply chain are the distribution centres. From here, the supply chain distributes the products to the direct customers and wholesalers. The direct customers include kiosks, grocery stores, chemists, supermarkets, petrol stations and canteens. Other customers buy the product from the wholesalers and distributors. Cadbury, also, has some confectionary shops for instance, in Birmingham where they hold family outings and reach more to their customers. Such shops are backed up by their online sites. Through their website, suppliers and customers interact with the organization effectively and the customers make their purchases online without having to make physical appearance to the company facilities.
Linkage with Consumers
The supply chain starts with the customer and ends with the customer. Cadbury links with its customers to receive orders, deliver the finished goods, and most importantly, receive feedback. The end customer needs a product that is safe and readily available. Therefore, Cadbury keeps improving their products based on consumer’s feedback. Mostly, the consumers prefer foods made of ingredients that are more beneficial; for instance, whole grains, healthier oils, fiber, and micronutrients. In addition, consumers need foods with less sugar, sodium and calories.
Packaging is one of the significant experiences consumers have with the product. Cadbury has improved its packaging for the Dairy Milk Chocolate by working collaboratively up with Plantic Technologies. Cadbury Schweppes is the first company to incorporate its biodegradable material for its product packaging whereby the company used it to package its Cadbury Dairy Milk Milk Tray in 2002. It is crucial for the consumers, since it is easy to dispose the packages after use. The packaging of Cadburys Milk Chocolate is anti-static, conforms to European Standards, is biodegradable after use, water dispersible and made from renewable resources, which are non-toxic to the environment. Use of this environmentally responsible packaging enables Cadbury to market the dairy milk chocolate bars in a unique way.
In addition, the chocolate bars packaging is well labeled with the ingredients used to make it. The bar is wrapped in a purple wrapper which is labelled, and the list of ingredients used written on the wrapper. This helps the consumer make informed choices while purchasing the product. One of the major worries for the consumer is the nutrient value of the product, and Cadbury takes care of this by giving a break-down of the nutritional value for each bar according to the quantity packaged. Through the internet and media adverts, the company addresses the issue of nutritional value since most customers worry about the risk of obesity if one consumes the bar of dairy milk chocolate. The consumers are free to ask all the questions concerning the effects of consuming the bar through the company’s official website and Google services,.
.A packaged bar of Cadbury dairy milk chocolate indicating the main ingredients.
The Cadbury Dairy Chocolate bar falls under the category of wrapped chocolate products. The ingredients used to make it are cocoa beans, raisins, sugars, milk and packaging with the help of energy and water. The final products wastes include solid wastes that are used as landfill, cocoa shell is used as a soil conditioner, and packaging is recyclable (Schweppes 23). Thus, disposing the final product is safe for the environment and human health except for the carbon emissions, which the company made commitments to reduce by half by 2020.
The Role That Technology Has Within the Supply Chain
Technology plays a significant role in the supply chain. It facilitates innovations; through which Cadbury is developing more varieties of the dairy milk chocolate to provide the consumer with more options to choose from. This includes using new sweetening options and offering products with lower calorie levels. Cadbury Schweppes has embraced the use of the Internet and social sites to improve its supply chain. Through the internet, the company offers a round-the-clock customer service. Through the internet, the company is able to interact with its customers, employees, and suppliers more efficiently than before. The internet reduces the gap between all the functions in the business.
Customers can directly access the company’s management without much bureaucracy. This encourages quick transactions and timely feedback. Timely feedback is essential for the company to correct any faults in the supply chain in time. Additionally, tracking the flow of goods in the chain is easy. The suppliers, too, can access much of the company information through the Internet. Through e-commerce, Cadbury can reach its customers directly or through a few intermediaries. It is beneficial to the company, since it enables Catbury to reduce the number of intermediaries needed in the supply chain. This reduces the company’s output, thus, increasing the profits.
Technology is useful for conducting extensive Research and Development on how to add value to the supply chain. The company has improved the manufacturing processes through technology and adopted more value-added processes in processing, packaging, and distribution. It is responsible for the creation of a stronger brand and increasing the market knowledge through advertising. Through technology, Cadbury has developed more personalized versions of the Cadburys Dairy milk chocolate.
In addition, technology plays a crucial role in coming up with better ways of encouraging healthy, environmentally friendly processes. For instance, through the use of technology, the Cadbury Company has come up with better farming methods for farmers, ways to reduce carbon emissions and good use of water and energy resources. All these are some of applications to encourage better environmentally responsible processes within the supply chain. Additionally, technology has facilitated better ways of waste reduction and management.
The objective of value adding in the supply chain is to deliver quality goods to the customers when needed while the company minimizes cost at the same time. The supply chain processes, also, involves the flow of materials as well as information. The information flow determines the flow of materials; it will either cause the material flow to continue or stop. The company encourages the flow of information and materials from suppliers to the customers and vice versa through the manufacturer.
The Nature of Transforming Processes
Transformation entails the use of necessary resources in order to convert inputs into the desired output. SCM transformation facilitates fast access to accurate and relevant information. Timely supply chain information benefits the company by encouraging the use of less inventory, lower costs, improved throughput, high level of customer service and shorter cycle times. Using internet helps companies to speed up the process of information flow while making it more effective.
The manufacturing process is involved with the production of the wide range of products desired by various customers. These varied requirements result in many types of processes such as packaging and flexible distribution methods. Similarly, distribution processes concern the warehouse functions. It involves storage of materials, how it is packed for delivery and means of movement for the product. The main warehouse for the Cadbury dairy milk chocolate is in Birmingham. There are other warehouses in the various countries Cadbury operates and where it sources its raw materials. The functions in the warehouse may be simple, manual, or highly computerized using conveyor systems and robots.
The logistics processes involve reducing the use of trucks, ships, and airlines and encouraging more hand delivery of goods. Cadbury strategically positions its centres near the points of entry such as ports and airports in the countries, it operate in. This reduces the need for long transportation process and decreases the risk of insecurity. To arrive at the best process, one should consider factors such as cost of the bar, the volume, and the desired speed of transit for inbound and outbound logistics.
Risks Involved in the Chain
One of the risks involved in the supply chain of a bar of CDM is carbon emissions. Cadbury Schweppes conducted a research on carbon emissions of its supply chain and found out that, for a 100g bar of the Dairy Milk Chocolate, only 1% comes from packaging. The production of milk accounts for the largest share of the emission - almost two-thirds; while manufacturing and distribution accounts for a further 30% (Werther and Chandler 2011). Carbon emissions are extremely harmful to the environment. It is one of the leading factors contributing to global climatic change. Poor water management and energy use, further, escalate the global environmental footprint.
To solve this problem, in 2007, Cadbury Schweppes launched a commitment known as “purple goes green” to halve its net carbon emissions by 2020. In addition, the commitment would oversee the upgrading of its packaging to make it 60% biodegradable (Cadbury 12). Additionally, Cadbury initiated a program to work with the UK dairy farmers to assist them with practical advice to help reduce their emissions. Further, the company published a guide on low carbon dairy farming and distributed it to dairy farmers. The guide details the farm management best practices for instance, improving herd health, optimizing milk yields, prudent use of fertilizers and the reduction of energy consumption. When fully implemented, these strategies will work towards the betterment of the environment.
Exhaustion of natural resources such as energy and water is, also, a risk in the supply chain. Use of excessive energy and water is dangerous for both the environment and the company. The measures include reducing excess packaging by reducing the number of product gifts, cutting down on energy use and improving water management (Schweppes 19). The package reduction involves reducing the packaged gifts and minimizing the amount of materials used to wrap the dairy milk bars. The company has succeeded in reducing the energy use and increase efficiency in transport and distribution by using regional distribution centres. The use of such centres reduces the number and frequency of the journeys made by vehicles.
A pack of several bars to reduce the amount of packaging materials.
Losing credible suppliers is, also, a risk in the supply chain. Without sustainable suppliers, the company loses the ability to meet the customer demands in terms of quality and more so, in quantity. Lack of sustainable supply results from a poor relationship with the suppliers or a downturn in the quality of raw materials produced, such as cocoa. There are several strategies to a sustainable supply of raw materials. One of them is to facilitate farmers and other producers of raw materials with research and information to upgrade or maintain the quality of their produce.
The second is forming partnerships with the suppliers. The company forms the Cadbury Cocoa Partnership with its cocoa producers. Another approach of strengthening partnership relations employed by Cadbury is celebration of every 100 years of cocoa trading with Ghana (ODIH 228). The Cadbury Cocoa Partnership initiative in India, Ghana, the Caribbean and Indonesia supports sustainable cocoa growing by introducing new source of income, improving farmers’ incomes and investing in the community and environmental development. In addition, Cadbury facilitates the research on methods of improving the cocoa production and offers good prices for the cocoa. The research also involves ways in which the farmers may upgrade their farming methods to more environment-friendly techniques.