Mapping of a Supply Chain

The supply chain of “Bru” coffee manages the flow of coffee beans from the farmers to customers for the final consumption.

 The aim of analysing supply chain of “Bru” coffee and evaluate supply chain through SWOT analysis.

Mapping of a Supply Chain

Supply chain is the network of activities which plan, adjust and execute the product flow from grabbing the raw materials till final distribution to customers in an cost effective manner (Kissinger, 2017). The importance of supply chain are-

Supply chain optimises the operation of the organisation in order to maximise the speed and efficiency.

Effective supply chain can provide competitive advantage to the organisation because of faster order delivery.

Supply chain process

Manufacturer

“Bru” coffee derive it’s raw coffee beans through best Arabica and Robusta beans from the best South Indian plantations (Unilever, 2018).

The coffee brand “bru” indulge in integration of contract farming with coffee beans suppliers.

The coffee brand authorises a third party to undertake its own manufacturing units.

Wholesaler

A wholesaler purchases large quantities of coffee and sell them in small quantities to the retailers.

A wholesaler maintains a stock keeping unit, satellite warehouse, and depot facilities to store coffee packets.

The Unilever`s coffee “Bru” hires merchant wholesalers, brokers, and agents to provide full-time service through industrial distributors.

“Bru” retailer uses customer distribution centres such as independent brokers, co-operative and independent grocery businesses.

“Bru” collaborate with local retailers to develop Bright Future project.

BRCC Enactus partnered with local retailers to serve the customers. For example- Initiates such as Shakti enterprises and super value stores have been initiated to serve the people in both rural as well as urban areas.

Finally, the coffee reaches to its final consumption level to the customers.

The brand “Bru” has a wide range of conventional coffee such as ice coffee, gold coffee, instant coffee, hot coffee, and cappuccino.

Apart from retail services, the brand also has its vending machines in supermarkets which provide Coffee.

Strength of Supply chain

“Bru” has a well-established distribution channel as it is the brand product of Unilever which has an unmatched strong distribution channel.

Company has decided to provide vending machines for hot beverages like tea and coffee, which help it to reach every maximum customers (Ntabe et al., 2015).   

The widespread distribution channel of “bru” coffee assists the company to maintain favourable trade relationships, provide incentive to retailers and organise demand generation plans.

Strengths of Supply Chain

Unilever operates 306 manufacturing units in 69 countries. Unilever`s maintains and operates a chain of 400 warehouses. A large number of warehouses are maintained by central system of control towers that improves customer services and reduces costs.

Weaknesses

Unilever`s supply chain lacks forward integration which leads to overdependence on retailers. Due to overdependence on retailers, the company looses its direct influence on customers (Blanchard, 2009).  

Despite of its strong market position, the company is unable to find wholesalers and retailers in rural areas. With less number of retailers in rural areas, the company is not able to reach its potential customers.

Although the demand of rural and semi urban population is growing but the main problem with distribution is improper logistics management.  

It caters huge audience and distribute coffee through C&F agents and several retail outlets but still it is unable to reach millions of customers in rural area.

Macro-environment

Macro factors (PESTEL) Affect on supply chain

Political factors Political elections and massive strikes minimise the pace of global operations of a company.   

Environmental factors Typical supply chain focuses on reducing the cost and serving higher quality. The introduction of extended producer responsibility has changed the ,market behaviour. The manufacturing units have to undertake the post-consumption phase of an product. Organisations are forced to follow ecological practices to meet the legislative requirements.

Social factors which are involved at manufacturing level is less use of chemical during the manufacturing process. Social responsibility towards suppliers and retailers have become major concern to consider their safety issues and other risk assessing factor (Mokhtar et al., 2018).

The improper infrastructure in the rural areas do not allow equal and adequate distribution of coffee in the whole country.

The fluctuating prices of fuel costs increases the cost of marine and land transport. Government imposes outbound operational policies such as octroi and toll tax that restricts the supply of coffee in certain areas (Guo et al., 2016).

Unilever already provides an variety of coffee such as Bru gold, Bru instant to customer. It also avails filter coffee such as Bru green label and Bru select.

As Unilever has widespread distribution channel. Hence, it can gain a understanding of demands of different customers (Gopalakrishnan, 2015) .

The coffee brand “Bru”can use its extensive wide distribution centres by  integrating VMI (vendor  managed inventory) programs to improve the demand plan.

Strengths Minimise Threats

“Bru” has an strong distribution channel which penetrates the basic lifestyle of consumers which minimises the threat of competition in the industry.

Weaknesses of Supply Chain

“Bru” supply chain has an competitive advantage over other coffee brands because “Bru” has become national and international player among the coffee.

An high performing supply chain which creates value additions in its supply chain to serve rural people efficiently minimise the risk of entering new competitors.

A large number of operational houses with similar number of warehouses in each area minimises the risk of dynamic nature of demand.  

Rather striving for retailers in rural areas, “Bru” should introduce ERP software among rural and semi-urban people.  

Every company has own managers to identify some innovation partners to spread its distribution channels to every corner of the country.

ERP systems can complement SCM (supply chain management) functionality which feature automatic purchasing.

The coffee brand “Bru”should undertake and monitor the vendor performance for coffee to review vendor cycle and error rates.  

Conclusion

Strengths of supply chain depend on the efficiency of the company to manage its distribution channels.

Macro- environmental factors have both positive as well as negative impact on supply chain operations.

Focusing on the strengths of supply chain rather than weaknesses can enhance and widen the distribution channel network.

The recommendations strive to improve the quality of supply chain by applying ERP software.   

References

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