SUPPLY CHAIN MANAGEMENT

ANANTHAKRISHNAN S (1311077) DHIVYA LAKSHMAN (1311086)

KARTHIK ARUMUGHAM (1311299) MANISH KUMAR S(1311305)

SHANTHA KUMAR T (1311402)

GROUP 5

Au Bon PainIntroduction

• Fast casual bakery and cafe chain

• Started in 1978. Headquartered in Boston, Massachusetts

• 385 cafes worldwide (United States, India, South Koreaand Thailand)

• Corners and crossroads, college campuses, transportationcenters, shopping malls and hospitals

• Indian Franchisee - Spencer Retail Ltd. owned by RP-Sanjiv Goenka Group

• 31 outlets – 29 in Bangalore and 2 in Kolkata

• Plans to open around 120 outlets in India by 2015

• The size of an average stores ranges from 850 sq.ft. to1,800 sq. ft

• Average sales per order Rs 200-Rs250

2

Au Bon PainVision, Values and Responsibilities

3

RPG-Sanjeev Goenka Group

Vision: Inclusive Growth fired by free-spirited Entrepreneurship

Values: Customer Happiness, Credibility, Humaneness, Speed,

Risk Taking, Execution Excellence

Responsibilities: development plan, Hire Staff, Store appearance,

Customer Service

Au Bon Pain Cafes

Vision: Taste the goodness!

Values: Flavorful, healthful, fresh delicacies, Contemporary,

colorful, comfortable environment

Responsibilities: Supply chain development, ordering system, advertisements

Au Bon PainMarketing and Strategy

• Market penetration by using the power of ripple effectthrough social media and concentrates in establishingthe brand image by Public Relations

• Marketing off-beat offers and campaigns like invitingpeople to narrate their experience on social media

• Market Competitors• Cafe Coffee Day (CCD): 1300 outlets in twenty states of India.

Set for 2000 outlets by end of 2014

• Barista Lavazza: More than 225 outlets in India

• Costa Coffee: 100 outlets in major metros in India

• Tata Starbucks: Indian Operations in 2011 -> 34 outlets in 5major cities

• Carpet bombing strategy – Economies of scale

4

Objective

• To study and analyze the Supply Chain of Au Bon Pain,

contemplate its operations, logistics, IT and strategy

• To recommend some futuristic implementable

changes for the supply chain

5

Au Bon PainIIMB outlet and its practices

6

• Focus on creating brand awareness amongstudent masses than concentrating on margins

• 10% of sales is paid to IIMB

• On an average the discount is 45% on the totalmenu costs

• Total number of input SKUs to be around 800

• 147 Output SKUs with

90 items having smaller shelf lives

57 items having longer shelf lives

• Working hours of the store 9 am to 2am with 8store workers and one store manager

Au Bon PainTraditional Retail Supply Chain Structure

7

Source: An Analysis of Current Supply Chain Best Practices in the Retail Industry with Case Studies of Wal-Mart and Amazon.com,Chiles and Dau, Georgia Tech

RM supplier

Warehouse &

Production

plant

Retail

Outlets (29

bakeries in

Bangalore)

CustomerCarrier Carrier

Information Information

Material Flow

Information Flow

Au Bou Pain

Value stream of Supply chain

Au Bon Pain Supply chain

9

Sourcing and Procurement

ProductionPlanning

and Distribution

Logistics

Fulfilment and

Customer Service

• Logistics and Customer Service form important entities in ABP’s supply chain

• Transportation and fulfillment of requirement during stock-out are prominent

for not to lose on potential customers

• GPS in the delivery vans and Centralized IT system are some suggestive actions

Au Bon PainDay to Day Operations & Data Sharing, IT, Manufacturing & Sourcing

10

Day to Day Operations

• Forecasting done on a daily basis depending of the sales data for each day of the week

• Store Manager takes the average sales of the last three weeks of the day -> Also takes into consideration of factors such as holidays, campus events, etc

• Special discounts are offered two hours before closing of outlet to reduce wastage and minimize cost of overstocking

Data Sharing, IT, Manufacturing and Sourcing

• Point of Sales data not shared Across ABP outlets in same town

• Manufacturing at Yeshwanthpur, B’lore which is the CDC

• ‘Shawman’ software is used for POS and MMS

Ingredients Prices(exclusive

of taxes)

Units sold/day Gross

amount/day

Au Bon Pain Outlet Locations

Au Bon PainInbound Logistics

YeshwanthpurDistribution Center

EGL Outlet

KoramangalaOutlet

IIMB Outlet

Fortis Outlet

18.82 km

4.52 km

10.1

1.19km

18.7km

• Perishable-daily; Dry-weekly

• Delivery check – 15 minutes

• A delivery van – 4/5 outlets

• Rs14/Km; 3rd party logistics12

Au Bon Pain Proposed Structure with IT

13Source: An Analysis of Current Supply Chain Best Practices in the Retail Industry with Case Studies of Wal-Mart and Amazon.com,Chiles and Dau, Georgia Tech

RM supplier

Warehouse &

Production

plant

CustomerCarrier Carrier

Information Information

Material Flow

Information Flow

Retail

Outlets (29

bakeries in

Bangalore)

Retail

Outlets (29

bakeries in

Bangalore)

Retail

Outlets (29

bakeries in

Bangalore)

Information

Au Bon PainRecommendations

Route optimization using GPS to reduce transportation costs

Centralized IT system for quick replenishment

CCTVs can be used to detect pilferage

Continuous Product Innovation

Open more stores to achieve economies of scale

Staff to be trained in menu, suggestive selling and up-selling

14

15