supply chain initiatives of baskin robbins india in

Supply chain initiatives of Baskin Robbins India in distribution

Aditya TodiAbhishek Nair

G VinodGomathi ShankarMohamed KhatibSameer Parandkar

SCM initiatives - Baskin Robbins India 2

Facts at a scoop

• Turned 65 in July 2010 globally• Entered India in 1993 as a JV with Ghai Group in Mumbai• Now run in India and SAARC countries by Graviss Foods• Graviss Foods also runs Kwality and Rich’s ice creams in

India• Turnover of INR 60 cr. in FY08 . 35%

growth against industry average of 12%• Ice cream retail industry in India in 2009 Rs.16 bn.

Organized sector took nearly 30 %. • Amul is the market leader in the overall industry


Baskin Robbins worldwide

Over 30 countries worldwide


Spread of outlets

• Near 6000 outlets globally• In India in 2007 – 200 stores in 35 cities• Now 400 outlets in 95 cities• Additionally 600 hotels & 600 modern format

retail stores• Announced upto 30% expansion this year

(Upto Tier IV)• Cannibalization is the objective


Manufacture

• Manufacture of ice creams for the whole of South Asia in Pune

• Most vital ingredients imported; Chocolate and flavours are the major imports

• All varieties manufactured in the plant itself. No postponement

• Raw material cost rose high due to commodity price hikes recently

• BR forced to raise prices


Initiatives

• This presentation will deal with two initiatives taken by Baskin Robbins in the area of SCM– Outsourcing distribution from factory to last mile

to a cold chain logistics company nationwide– Building IT infrastructure and MIS to aid in

inventory planning and distribution


Problems in distribution

• Cold chain logistics is central to the ice cream business• It is not the core competency of BR• They tried their own logistics system but failed• In the words of CEO South Asia Pankaj Chathurvedi ,

“One of our best decisions, which has paid us handsome dividend over the past few years, has been our move to outsource our distribution and logistics to core players. Cold chain logistics is central to the ice cream business but the irony here was that it was not our core competency. As a result when we operated it, we were expending valuable resources to conduct this. Five years ago we decided to completely outsource this part of our business (from factory to the last mile). This has helped us immensely in allocating valuable resources to more gainful activities.”


Outsourced distribution

• Snowman Cold Chain logistics is the national supply chain partner for BR

• Challenges to be tackled– Prebuilt product needed to be stored at the right

temperature so that quality is maintained. Power fluctuations and lack of infrastructure are problems

– Lack of Temperature Controlled Warehouses on Pan India basis

– Seasonality of the demand for ice creams


Snowman Logistics

• Snowman provides -25° C at its dedicated warehouses to store prebuilt blocks

• Such long duration storage is done for the first time in India to offset demand during the season

• Snowman has 18 warehouses in India with requisite infrastructure (ISO 22000 certified)


Snowman W/H network


BR Distribution diagram

Pune manufacturing

plant

W/H 1

W/H 2

W/H 3

W/H 18

Regional outlets

Milk run adopted through dedicated trucks

Dedicated temperature-controlledwarehouses


Transport – Bangalore example

• Bangalore has 55 franchise outlets of BR• Snowman implements milk-run system for

distributing from warehouse to outlets• 9 different routes are used on different days of

the week• 10 trucks are used


Variety

• Baskin Robbins is renowned for its variety of ice creams (the 31 variety story is a significant brand property)

• All varieties are manufactured at factory; No postponement

• Portfolio rationalization done frequently• Recently in June 2010, five flavours are retired

to “Deep freeze”• New flavours to be added to the portfolio


IT infrastructure

• BR integrated all its outlets with a single MIS infrastructure

• One head office for dissemination, collection, compilation and analysis of all information

• 5 Regional offices for co-ordination with franchisees• Gives a point-of-sale solution to the customer at the

front end• Also aids production planning, inventory planning,

distribution and marketing


Position & Competition

• BR positioned between mass brands and high-end brands Rs. 45-60/scoop

• Mass – Amul, Kwality Walls etc. around Rs. 15-20

• High end – Haagen-Daaz, Movenpic etc. Rs.150/scoop

• Gelato is closest ice cream competition• Café Coffee Day and Barista indirect

competitors


Differences in SKUs

• Baskin Robbins ice creams are not sold in pre-packed SKUs like 50 ml, 100 ml etc.

• Mass players like Amul, Kwality etc. follow this • BR ice creams are sold in scoops• Outlets stock the ice cream varieties in frozen

containers at store• BR ice creams available only in BR outlets

unlike Amul, Kwality etc.


Benefits to BR

• Huge cost savings due to outsourced distribution and warehousing

• Distribution efficiency enabled rapid expansion across the country

• Outsourcing also allows BR to focus on its core competency in product portfolio, taste and service

• MIS makes planning of production and inventory easier


Testimonial for benefit

• "Snowman has become an extension of our company since they manage our end to end supply chain solutions quite Efficiently by maintaining high standards of process and systems and more over all in temperature controlled environment which is a

major Challenge in India."Subroto Mukherjee

Chief Operating Officer Graviss Foods Pvt. Ltd

(as seen in Snowman’s website)


References• http://retailnu.wordpress.com/2008/05/22/baskin-robbins-eyes-small

er-cities-in-india/

• http://voicendata.ciol.com/content/goldbook/goldbook07/107031211.asp

• http://indiafranchiseblog.blogspot.com/2010/07/baskin-robbins-franchise-strategy-to.html

• http://www.helium.com/items/1894914-national-ice-cream-day-2010-baskin-robbins-retires-five-flavors

• www.snowman.in• www.baskinrobbins.com• Classroom notes of SCM

http://retailnu.wordpress.com/2008/05/22/baskin-robbins-eyes-smaller-cities-in-india/



http://voicendata.ciol.com/content/goldbook/goldbook07/107031211.asp

http://voicendata.ciol.com/content/goldbook/goldbook07/107031211.asp

http://indiafranchiseblog.blogspot.com/2010/07/baskin-robbins-franchise-strategy-to.html



http://www.helium.com/items/1894914-national-ice-cream-day-2010-baskin-robbins-retires-five-flavors




http://www.snowman.in/

http://www.baskinrobbins.com/


Thank You

Your patient attention truly deserves an ice-cream !

supply chain initiatives of baskin robbins india in

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